Pokémon Go is being heralded as the most successful mobile app of all time. In its short history, the game has racked up over 100 million downloads across Apple (AAPL) and Android devices. And in its first month, the viral sensation collected $200 million in sales as it continues on its historic trajectory. The real winner from Pokémon Go mania has been Nintendo. If there were any doubts that mobile was the future for Nintendo (NTDOY), the past month has put that to bed.
Nintendo’s stock has been on a rollercoaster ride since the mobile app debuted in early July. Shares more than doubled at the outset, but have since dropped 25% after Nintendo indicated the game would provide limited synergies.
The actual contribution hasn’t come directly from the game. It’s the buzz created by Pokémon Go that shows how a mobile game can rise to prominence overnight. This is a stark difference from console gaming which takes years of testing and developing with no guarantee of success.
Nintendo has certainly taken a step back from its glory days in the 90s and 2000s. The Wii U, Nintendo’s most recent console, has been largely unsuccessful since it debuted in 2012. The console pales in comparison to Microsoft’s Xbox One (MSFT) and Sony’s PlayStation 4 (SNE) in terms of sales and capabilities.
All is not lost, though. Nintendo’s catalogue of iconic franchises including Mario, Zelda and Donkey Kong can very easily right the ship if leveraged correctly. More importantly, Nintendo is preparing to launch two new smartphone games in the coming months. These games are based off classic titles, Fire Emblem and Animal Crossing, which will likely tug at the nostalgic strings that drove Pokémon Go’s popularity.
This isn’t all Nintendo is doing to regain some of its long forgotten customers. Last month the company announced what it is calling the Nintendo Entertainment System. It looks like the original NES that many of us grew up with and comes pre-loaded with 30 classic titles. The system will launch in the coming months and will retail for $59.99, a small amount to relive your youth.
Nintendo is also prepared to debut its newest console, the Nintendo NX, in March of 2017. The console is rumored to be a hand held device that interfaces with a television. Given its recent blunders, it may be hard for Nintendo to weather another bust like the Wii U.
Bridging consoles to mobile will be the key to Nintendo’s future success. The company has already found huge success in mobile after Pokémon Go went viral in July. Tying future developments in mobile back to console is the missing link that Nintendo needs to remain relevant. If that can occur with the upcoming Nintendo NX console, expect sales to replicate the enormously successful Wii rather than the disastrous Wii U.
At the end of the day, mobile is crucial to Nintendo’s long term success. Any game that the company develops for play on Android or iOS will likely provide a huge boost to the top line. That is something investors will be looking forward to once the current Pokémon craze fades away.
VIA - nasdaq.com
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