Japan McDonald's Shares Hit 15-Year High on Poké mon Tie-Up
July 21 2016 - 4:20AM
Dow Jones News
TOKYO—Shares in the Japanese unit of McDonald's Corp. hit a
15-year high Thursday, but ended lower, after the company announced
a tie-up with "Poké mon Go," in the latest speculative frenzy over
companies that could profit from the smartphone game.
McDonald's Holdings Co.'s stock price rose as much as 10% to
3875 yen ($36), its highest level since August 2001, before
reversing to close down 1.1% at ¥ 3475.
The fast-food chain's restaurants across Japan will be "Poké
Stops" and "Gyms" for "Poké mon Go," meaning players can visit to
collect items and battle other players, according to people
familiar with the situation. McDonald's said Wednesday that it
would "collaborate" with "Poké mon Go," without elaborating.
The tie-up will likely prove a blessing for McDonald's, which
has struggled in Japan due to food-safety scandals and an
increasingly segmented customer demand.
"Poké mon Go" is a location-based, augmented-reality game in
which players use smartphones to search for virtual creatures
layered over images of the real world. Created by Tokyo-based Poké
mon Co. and San Francisco-based Niantic Inc., the free-to-download
game features characters from Nintendo Co.'s 20-year-old Poké mon
franchise.
Analysts say "Poké mon Go" has already become the most popular
smartphone game in the U.S. since its launch two weeks ago. It is
expected to be released in Japan as soon as this week.
In addition to restaurants, other physical locations could
benefit from a tie-up with "Poké mon Go", they say.
"'Poké mon Go' could help shore up local economies through
tie-ups with particular merchants and tourist spots," said
Tatsuyuki Negoro, a professor at Waseda Business School who
specializes in internet business strategy. "Imagine many people
visiting places they've never been. Its ripple effects wouldn't be
small."
Niantic, which was spun off from Alphabet Inc.'s Google last
year, said it would seek more global sponsors for the game, which
it sees as an important source of revenue. Players can also make
small, in-game purchases of digital items that make playing the
game easier.
Niantic declined to comment on why it picked Japan to introduce
such sponsorships for "Poké mon Go," citing that the game hasn't
been released in the country yet.
The company had previously struck successful partnership deals
with other major Japanese companies, including SoftBank Group Corp.
and Mitsubishi UFJ Financial Group Inc., with another
location-based, augmented-reality game, Ingress.
The popularity of "Poké mon Go," which third-party data
providers say has been downloaded tens of millions of times, could
prove problematic for some. The U.S. Holocaust Memorial Museum,
which was made a key location for the game by accident, has asked
people not to play on its premises.
For merchants such as McDonald's, concerns include players
loitering too long without eating or large numbers blocking access
or nearby traffic.
McDonald's Japan unit declined to comment on potential
problems.
Still, so far "Poké mon Go" has been good for stock prices, at
least. Shares in Nintendo have soared and are expected to make
further gains when the game is launched in Japan.
"We are extremely happy," Yoshihide Suga, Japan's chief cabinet
secretary, said Thursday when asked about "Poké mon Go"'s potential
to contribute to a wide range of industries.
Kosaku Narioka contributed to this article.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
(END) Dow Jones Newswires
July 21, 2016 04:05 ET (08:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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