Nintendo Market Value Enhanced by $7.5 billion in Just Two Days by Pokemon Game

As investors cheered the runaway success of Pokemon GO – Nintendo Co Ltd first long-awaited venture in mobile gaming, the company managed to bring the market-value gains to $7.5 billion in just two days as shares of the Japanese company soared again.

Players are allowed to walk around real-life neighborhoods while seeking virtual Pokemon game characters on their smartphone screens in the game which marries a classic 20-year old franchise with augmented reality. This scavenger hunt has earned enthusiastic early reviews from gamers, critics and investors alike.

According to web analytics firm SimilarWeb the game was installed on more than 5 percent of Android devices in the united States by July 8 – within just two days of the release of the game.

The analyst firms said that the rate of daily active users for the game was neck and neck with social network Twitter and it is also now on more Android phones than dating app Tinder. It added that the average time spent by users and players in the game every day is more than the average time spent every day by users on WhatsApp or Instagram at an average of 43 minutes a day.

Nintendo’s shares surged by a quarter in value on Monday to their highest level since November as the game took the U.S. by storm.

With the initial momentum coming from the game shooting to the top of free app rankings in Apple Inc’s U.S. iTunes store, the shares gained 36 percent since Thursday’s close.

United States, Australia and New Zealand are the countries where the game has been released. The game is yet to be launched in many countries that include Japan – one of the world’s biggest gaming markets.

However since Pokemon GO is free and Nintendo is not the sole investor or creator, the game may not prove an immediate boost to Nintendo’s bottom line.

Pokemon Company and Niantic, spun off from Google last year were the creatorsof the game itself. Niantic, which had already developed a similar augmented reality, multi-player game in 2012, is partly owned by Nintendo and Pokemon Company while the later is one third owned by Nintendo.

Largely due to small purchases made while playing – and the positive signs for other mobile gaming launches planned by Nintendo for 2016 and 2017, some analysts have been upbeat about the money-making potential for Pokemon GO.

“If nothing else, Pokémon GO has shown that there are ‘dormant’ Nintendo fans eager to trial its content for smartphones,” Deutsche Bank analysts said in a note.

However questions about sustained excitement over the game which would significantly boost Nintendo’s earnings – particularly given that the company now has to contend with a sharp strengthening in the yen, are still being asked by other analysts who have sounded a word of caution at being over-zealous over the issue.

The core console business is the area from where real change would have to come, those investors say.

“Now if we were talking about its next generation console becoming the core platform for gamers, then that would be something to get excited about – but at the moment, this alone is not enough,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.

(Adapted from Reuters)

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