Pokémon Go is a huge hit. Can it save Nintendo?
The new Pokémon Go app has been released only in three countries, but Nintendo’s stock has surged more than 25 percent since last week's launch. An estimated $9 billion has been added to the company's market value since last Wednesday.
Pokémon Go, a mobile game that has kids and adults alike roaming the streets of their cities and towns in search of imaginary monsters, exploded onto the scene just last week. But already, it’s a sensation.
As of Sunday, more than 5 percent of Android users in the United States had downloaded the free, augmented reality app since it launched on July 6, and 60 percent have been using it daily. Within a few days, predicts web and app analytics firm SimilarWeb, Pokemon Go will draw more daily active users than Twitter.
Pokémon Go's impressive launch has energized an otherwise sluggish Nintendo, a Japanese video-game maker that owns a third of the The Pokémon Company, which co-developed the game with Niantic, a spinout from Google parent company Alphabet.
Since the app’s release – so far only in the United States, Australia and New Zealand – Nintendo’s stock has surged more than 25 percent. This is the biggest jump in the company’s value since Nintendo started trading on Tokyo’s stock exchange in 1983, according to Bloomberg.
Nintendo is best known for its video game console and massively popular 1990s video games, including Mario Bros. and the Legend of Zelda. But the company has been slow to adapt to the growth in mobile gaming in recent years. This year, mobile is expected by financial consulting firm Deloitte to become the biggest platform for gaming – over personal computers and game consoles – by software revenue, generating $35 billion in revenue, a 20 percent increase from last year.
Though it’s unclear whether excitement about Pokémon will endure beyond the app’s initial splash, it has already brought Nintendo on par with app and game console rivals Microsoft and Sony, as the Wall Street Journal points out, and could provide a needed boost to the company’s smartphone game business. Nintendo will release two more mobile games in fall.
Though the Pokémon app is free to download, it generates revenue by selling items, which range in price from $1 to $100, that help people catch Pokémon monsters.
Pokémon first came on the scene 20 years ago as a role-playing game for Nintendo’s hand-held Game Boy device. The Pokémon Company was born in 1998 to house Pokémon businesses, establishing a franchise that has since then earned $45.6 billion in revenue globally through video games, trading cards and other merchandise, reports the Journal.
By using a phone’s camera, the recently released app augments users’s views of the real world by inserting digital characters into the real world, or superimposing them onto real-life scenes that players view on their phone screens.
“Pokémon Go uses your phone’s GPS and clock to detect where and when you are in the game and make Pokémon ‘appear’ around you (on your phone screen) so you can go and catch them,” reports Vox. “As you move around, different and more types of Pokémon will appear depending on where you are and what time it is. The idea is to encourage you to travel around the real world to catch Pokémon in the game.”
The travel so far has brought both good and bad consequences for players. Some users, for example, are finding that the game gets them outside for exercise.
“I think it’s awesome. My daughter and I walked 2 miles playing this, not even realizing it. Great exercise,” commented a person who identified herself as Nicole Walker in a post responsing to the Journal’s Pokémon story.
Others are playing more nefarious games with the app by using it to locate and rob players who wander into remote places in search of Pokémon monsters that look like rats, snakes, and dragons, among a host of other characters.
Some players, with eyes glued to their phone screens as they’re chasing the characters, are facing real-life injuries, such as twisted ankles and bruised shins, as The Christian Science Monitor has reported.
"People really need to watch what they're doing and make sure their kids understand where this game could lead them," O'Fallon, Mo. Police Sgt. Phil Hardin, where Pokémon-related robberies have been reported, told the St. Louis Post-Dispatch.