12 Jul 2016

Pokemon Go fever sends Nintendo shares soaring

10:25 am on 12 July 2016

Shares in Japanese gaming company Nintendo have jumped by nearly a quarter on Monday following the success of a new Pokemon Go smartphone game.

Pokemon Go being played on a mobile

The Pokemon Go game asks players to explore the real world and displays pokemon for them to catch using the phone's camera, a technology called augmented reality. Photo: RNZ / Claire Eastham-Farrelly

The game debuted at the top of app download charts in the US, Australia and New Zealand last week and was yet to be released in other countries.

Millions of users have already downloaded the game, in which players must walk around the real world to catch on-screen characters like Pikachu.

It was downloaded onto more US Android smartphones than the dating application Tinder within a day of its launch, according to data from Similar Web.

Headlines have focused on the dangers, including getting distracted, armed robbers using it to lure gamers into a trap, and a player discovering a dead body in a river.

Nintendo saw shares since the game's release on 6 July adding more than $US7bn to the company's market value.

Pokemon Go being played on a mobile

The game also uses Google Maps to display points of interest where players can collect items to improve their pokemon. Photo: RNZ / Claire Eastham-Farrelly

IG market strategist Evan Lucas called the investor speculation around the app "amazing" but said Nintendo would need to do more to justify the jump in its share price.

"The question with all apps is monetisation. In-app purchases will be key to its long-term monetary success - clearly the market believes there will be a windfall," he said.

However, the Japanese company was not even a developer of the game, but rather along with Gamefreak and Creatures is a part owner of The Pokémon Company which owns the intellectual property.

Pokemon Go was instead was created by US-based developer Niantic, founded from an internal startup at Google which built a similar game, Ingress.

That raised questions about how much profit Nintendo could actually see from the game.

Nintendo, which is also behind the iconic Super Mario game, has traditionally relied on sales of its gaming consoles.

Analysts have criticised the company for lagging behind rivals like Sony and being late to the game in catering to the growing smartphone market.

In March, Nintendo released its own first-ever mobile game Miitomo, which has done well, gaining a million users within three days of launch.

The Japanese company said it planned to launch four more smartphone games by the end of March 2017.


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