U.S. stocks are at all-time highs and the Pokemon craze is in full hysteria.
Shares of Nintendo Co. Ltd. went gangbusters on Monday, rising 24 percent in Japan, amid the surprisingly successful launch of Pokemon Go, an augmented reality game that’s allowed millennials to relive a version of their childhood they never could have dreamed of. A company called 4Kids Entertainment Inc. was responsible for dubbing the Japanese cartoon into English, and also served as a licensing agent for Pokemon-related products.
A new smartphone game that has fans chasing virtual monsters through real-life city streets has boosted the market value of Nintendo Co. by $9 billion in just a few days, as investors cheered the Japanese videogame maker’s first mobile-gaming hit.
The game has been available for devices running Apple Inc.’s iOS and Google’s Android in the U.S., Australia and New Zealand since Wednesday. In the U.S., it has racked up more than two million downloads on iOS devices and is generating roughly $1.6 million in revenue daily from in-app purchases, according to market researcher Sensor Tower Inc.
Nintendo shares surged 25% in Tokyo on Monday—a welcome relief for the company after the unsteady launch of its first mobile app, Miitomo, in March. Much attention has swirled around games potentially involving Nintendo’s signature characters such as Mario. Instead, the company’s first hit stems from its partnership with the companies that developed “Pokémon Go”: Pokémon Co., which is 32%-owned by Nintendo, and Niantic Inc., a spinout from Google parent Alphabet Inc.
“Pokémon Go” benefited from media coverage after an announcement last fall the game was under development. A video trailer and press release came out the day before the game launched last week. “We hoped people would be organically excited about it because it’s a new kind of experience and that turned out to be the case, even more than we expected,” Niantic Chief Executive John Hanke said.
Sudden crazes are nothing new for Nintendo: It had a breakout success with its amiibo figurines after they launched November 2014. “Pokémon Go,” however, could provide the company with a new, lucrative way into users’ wallets: recurring revenue from in-app purchases. The game, while free to download, sells add-ons such as “pokeballs” costing $1 and more that help catch the animated creatures.
The companies’ next steps will be figuring out how to capitalize on the game’s success. This month, Nintendo plans to release an optional $35 portable device called Pokémon Go Plus designed to help game players capture the “pocket monsters” without needing to pull out a smartphone.