Pokémon is one of the most successful video game franchises ever created. Games have been made for an array of video game consoles such as the GameCube, Wii and Wii U as well as for portable consoles including every evolution of the Game Boy and DS. The games typically sell for $29.99-59.99 for these consoles. In addition to video games, there are physical products such as toys, trading cards and posters as well as digital products including movies, TV shows and music.
A while back, The Pokémon Company, a company created by Nintendo Co. to license and market the Pokémon franchise, partnered with Niantic Inc. to create an augmented reality game. Nintendo owns roughly a third of The Pokémon Company. Niantic was founded in 2010 under Google, but became its own independent company in 2015. In 2013 they made the popular game called “Ingress” which is fundamentally a predecessor to Pokémon Go, with catching portals instead of Pokémon. Nintendo has a small stake in Niantic as well.
Now that you know a bit of the history behind Pokémon Go, I can tell you why it is so vital to Nintendo. This past Monday, June 11th, the price per share of Nintendo’s stock rose an astonishing 25%. To put this in perspective, when Apple released the iPhone in June of 2007, its stock rose a mere $0.07. Granted that the American stock market and the Japanese stock market are not entirely the same, they are still pretty similar especially in our world today. If the same thing happened to Apple, its stock would rise about $25 a share.
On top of that, even though the game is free to download, it creates about $1.6 million in daily revenue from in-app purchases according to Sensor Tower Inc. The game has been out for approximately a week now and that number will most likely continue to increase before it levels off. The highest grossing app last year was the “Kim Kardashian: Hollywood” app with 40 million downloads and $74.3 million in revenue. To date, Pokémon Go has almost 8 million downloads in the United States and at its current rate, will topple Kim Kardashian: Hollywood’s revenue only 6 weeks from now.
For investors, the best thing about this app is that it offer’s 1/7th of the all Pokémon regions seen in the previous video games. This means that they can easily make 6 more apps that will be popular among various age groups. I hope they take their time and release one game every couple of years since there is a large amount of potential growth for the technology that it utilizes. Pokémon Go is truly an unprecedented app. It is making gamers want to go outside and is causing children to want to go walk, run and ride their bikes. This game is a right step in bridging our reality to virtual reality.
Statistics are from the Wall Street Journal, Investopedia and Forbes.