Pokémon GO causes Nintendo’s biggest market share spike since 1983
Since it’s limited release on July 6, the mobile game Pokémon GO has become an instant sensation. Not only has it succesfully convinced people to go outside to catch their favorite Pokémon, it has provided a huge boost on Nintendo’s stock as well. Nintendo’s market share has increased by 25% on the Tokyo stock market following it’s release.
On Friday, Nintendo shares already increased about 9% after the game was released in Australia, New Zealand and the United States. Because investors anticipate an official launch in Asia and the rest of the world, this stock has risen even further. One share is now worth 20,260 yen (approximately $200,- or €180,-). This makes it the best day Nintendo have had since 1983.
The success of Pokémon GO comes as a welcome boost for Nintendo, who were recording a 36 percent drop in profit back in December. Nintendo president Tatsumi Kimishima attributed this drop to dwindling sales of the Wii U and 3DS titles, but also assured investors that Nintendo’s revenue would increase due to mobile releases such as Pokémon Go. Right now, his assurances seem to be coming true, even though this only a limited release. Another example of this is Miitomo, Nintendo’s mobile social networking app, which was released in March 2016 and had already been downloaded over 10 million times as of April 28 2016.
A big part of Pokemon GO’s influence on Nintendo’s market share will depend on the longevity of the game. You could say we are in the ‘honeymoon phase’ right now, where everything about the game is beautiful and we are willing to overlook its flaws. However, it is possible to imagine a situation where the game devolves to endless grinding, causing it to grow stale after a time. On the other hand, Niantic has promised to incorporate new features, such as trading, into the game. As one of the iconic Pokémon mechanics, this could provide the game the longevity it needs to succeed in the long-term.
So does Pokémon GO represent the future of Nintendo and will we see more succesful mobile games down the road, or is Pokémon GO just an HM05 in the pan? For the time being, all we know is that there are Pokémon outside, and we better go out if we want to catch them all.
Image credit: Niantic / The Pokémon Company / MarketWatch