Following the game launch, Nintendo’s stock increased 9.3% last week, and has risen 24.52% Monday to $193, making this the highest one-day increase since 1983 and adding $7.5 billion to Nintendo’s market value.
Pokémon Go has topped the chart for gaming apps in the US, Australia and New Zealand, and market researchers say the game has already been installed on 5% of all Android smartphones in the USA.
This has been a good win for Nintendo, but Pokémon Go is actually not made and operated by the Japanese company. The app was created by Niantic, an augmented reality gaming firm spun off from Google in 2015, and was built in partnership with the Pokémon Company. Nintendo is an investor in both companies, but the app is free to download, the revenue generated from in-app purchases.
An analyst said that Pokémon Go will have to create around $140 million to $196 million each month in profit to have any big impact on Nintendo’s profits. According to CNBC, Pokémon Go was estimated to have made $3.9 to $4.9 million on the day it was release, meaning that the game will need to stay on top of the app charts consistently to keep raking in big bucks. Revenues primarily come from in-app transactions, but also from marketing venues, such as drawing players to certain businesses with location-specific Pokémon.
The question to the company’s success in Pokémon Go then, is in whether or not it can sustain players’ interest. Tim Culpan from Bloomberg has compared the game to Nintendo’s Wii in 2007 – it helped the company’s stock price soar when it was released, before eventually leveling back down two years later.
Pokémon Go has the potential to stay a gaming darling, as it is one of the best-known and most-loved game franchises in the world. Its current popularity has come from a release in only three countries so far; launches in other countries had to be postponed as Niantic’s servers cope to keep up with the game’s rise to fame. Since the app’s current implementation is also quite direct, there is plenty of room for creating a more engaging player experience when public interest starts to wane.
Niantic’s struggle to address the massive influx of users isn’t encouraging for the game, though. And while players are happy with Pokémon Go now, Nintendo has to find ways to sustain that. In any case, the game has shown Nintendo that there is a huge potential in mobile gaming apps – something the company has not touched in year – and more Nintendo games are set for launching late this year.