Currently the top-grossing app in the Apple Store, Pokémon Go is taking America by storm. The free app, which was just launched July 6, has already increased Nintendo’s value by a whopping $11 billion. In just five days, Nintendo’s value jumped from $17 billion to $28 billion. The video game company has seen its stock surge, much to the delight of investors. On July 11 alone, the Tokyo Stock Exchange saw the stock rise by nearly 25% by the close of the day.
While these numbers are very impressive, Nintendo still has a long way to go to get to where it was nine years ago. In October 2007, Nintendo’s value surged as a result of the release of the Wii gaming system. The company was valued at just under $80 billion, and stocks were worth $625 per share.
What is Pokémon Go?
Source: News Locker
You’re likely familiar with the Pokémon game from the late ‘90s. The new Pokémon Go app builds upon that by creating augmented reality – a combination of a virtual world mixed in with reality. By using your phone’s clock and GPS, the game makes Pokémon appear around you. Built upon the original game’s theme of “Gotta catch ‘em all,” the game encourages you to move around and find and catch different types of Pokémon. The app itself is free but with in-app purchases such as power-ups, you can make it easier to catch Pokémon.
Why the Hype?
Source: The Verge
Pokémon Go users are wildly ecstatic about the game, which was jointly developed by the Pokémon Company and Niantic. They’re using the game at work, while riding in the car and even while they’re in the bathroom. Why are people interrupting their daily lives to play this game from a franchise that started 20 years ago more than 20 years in Japan? Beside that fact that the game is free and easy to play, here are some theories behind the surge in popularity:
How Long Will the Craze – and Rising Stock – Last?
Source: The Wall Street Journal
Pokémon Go is currently dominating the charts in the United States, Australia and New Zealand. While the game is doing better than expected, the craze won’t last forever. Fans of the 1990s game may be enamored with the app now, but mobile users tend to have short attention spans. New games are constantly flooding the app stores. In just a few months, mobile users will be looking elsewhere for their next gaming fix. Without a spectacular follow-up app, Nintendo sales and stock will likely plummet back to where it was last month. That’s what happened to the company called King, which created the wildly popular app Candy Crush Saga.
Nintendo has more games in the works. By March 2017, the company plans to release four more games for mobile devices as well as a new gaming console.
As video game fanatics are moving away from gaming systems that are wired into a TV and moving toward cheaper mobile apps, Nintendo will need to make this transition as well if it wants to keep the momentum going. It’s going to take more than just a one-hit wonder.