A new smartphone game that has fans chasing Poké monÂ
characters through real-life city streets has turned into an
unexpected craze and added $9 billion worth of market value to
Nintendo Co. in just a few days.
Nintendo shares surged 25% in Tokyo trading Monday following
rises Thursday and Friday, giving the company a market
capitalization of nearly $28 billion.
After the disappointing launch of its first mobile app, Miitomo,
in March, the popularity of Poké mon Go has provided a much-needed
jolt to Nintendo's stock, which had tumbled on concerns about its
outlook. Much has been riding on Nintendo's foray into mobile
games, which have accounted for the bulk of the videogame
industry's growth in recent years, as the company's traditional
console game business struggles.
The game lets players scour parks, buildings, subway stops and
other natural habitats for cute characters such as Pikachu. The
game is an example of "augmented reality," blending a person's view
of the real world through the smartphone's camera with digital
images of the colorful characters.
Poké mon Go is a joint project by The Poké mon Company, which is
32%-owned by Nintendo, and Niantic Inc., a spinout from Google
parent Alphabet Inc. The game has been available in the U.S.,
Australia and New Zealand since last Wednesday and people familiar
with plans for the game said it would likely be available in other
regions, including Europe, Japan and other Asian nations within a
few days.
Sudden crazes are nothing new for Nintendo and its characters,
and this one—if it continues—could provide the company with another
lucrative way into users' wallets.
That is because the smartphone game app, while free to download,
brings in revenue by selling in-game add-ons, such as balls costing
$1 and higher that help catch the animated creatures.
It took less than a day from the introduction for Poké mon Go to
become the most downloaded and highest-grossing app in the
countries where it is available, according to market-data provider
App Annie. Data firm SimilarWeb said Monday the app is about to
surpass social-networking service Twitter among Android users in
the U.S. as far as the number of daily active users.
Aside from the risk that Poké mon Go will turn out to be a
short-lived fad, analysts said one of the main challenges for the
game is overcoming some safety issues that have emerged. Police in
the U.S. and Australia issued safety warnings, saying game-players
should be aware of their surroundings.
A spokeswoman at the headquarters of The Poké mon Company in
Tokyo said: "We are so grateful to our fans for turning this game
into such a trend. We hope everyone will follow guidelines to play
it safely and observe good manners." Nintendo referred questions to
The Poké mon Company.
One of the first visuals players see after downloading the game
is a warning to be careful. That didn't help Dakota Schwartz, a
27-year-old technology worker who has caught about 100 digital
creatures since downloading the game.
He sprained his ankle at a public park trying to capture a
particular Poké mon—a brown dinosaurlike beast wearing a skull for
a helmet.
"I knew there was a Cubone over by the tennis courts," he said.
"I looked down at my phone at the wrong time."
Poké mon is a role-playing game first made in 1996 for
Nintendo's Game Boy hand-held device by game designers including
Shigeru Miyamoto, the creator of Mario the plumber. The Poké mon
Company was set up in 1998 to manage Poké mon-related businesses,
and it says the franchise has since then earned 4.6 trillion yen
($45.6 billion) in revenue globally through videogames, trading
cards and other merchandise.
John Seo, a longtime Poké mon fan from Closter, N.J., saw a
young woman capture a Poké mon when he was playing the game with
friends in Brooklyn, N.Y. The two quickly struck up a conversation,
he said. "I just asked her out toward the end," said Mr. Seo, 25.
"I've never met a stranger and felt so connected."
Kyoto-based Nintendo's business has been struggling recently,
owing to challenges from smartphone games and console rivals
Microsoft Corp. and Sony Corp. The initial success of Poké mon Go
suggests that Nintendo may have a path forward with smartphone
games that competitors will have trouble matching.
"Poké mon Go is a one-and-only game because it is a marriage of
famous characters that everyone knows and the cutting-edge
technology powered by Google," said longtime industry analyst
Hirokazu Hamamura, a director at Kadokawa Dwango Corp.
Both Google and Nintendo are investors in Niantic, the
co-developer of Poké mon Go.
This month, Nintendo plans to release an optional $35 portable
device called Poké mon Go Plus that is designed to help game
players capture "pocket monsters" more easily with the push of a
button rather than with a tap on a smartphone. Also coming are new
Poké mon games for Nintendo's popular but aging hand-held 3DS game
device.
Mr. Hamamura, the industry analyst, said the videogame market
today is "all about establishing a solid player community," and
Poké mon Go bodes well for Nintendo's own smartphone games planned
in coming months.
Nintendo, together with its partner DeNA Co., plans to release
Animal Crossing and Fire Emblem for smartphones this fall. Both
titles, previously sold for a range of Nintendo game devices, are
among the company's most popular.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com and
Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
July 11, 2016 10:25 ET (14:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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