It seems that everywhere you go you see people staring at their phones, whether they are walking down the street or sitting in a restaurant. A huge majority of people have their smartphone within reach 24/7. Some of these individuals are texting, some are shopping, and some are playing games.
There is one gaming app that is causing a major stir. Pokemon Go is actually creating way more than a stir, though. It is putting Nintendo back on the map of big players. But what is the fuss all about?
Augmented reality games are the future of video, and this game is definitely a step in that direction. Because it uses Google Maps for GPS and the camera of your smartphone, it is considered a location-based app. With this technology, once you create your avatar, it is displayed at the your current location along with a map of the your immediate surroundings.
As you travel through your real world, your avatar follows along in the game’s map as you try to capture items, battle, and train virtual characters. I have yet to try the game, but from what I’ve read it must be quite addictive.
Another reason for the media publicity it is receiving has to do with the fact that Nintendo’s value doubled within a week of it’s release in July. This article from Fortune Magazine explains the increase and what it means to the company.
Thanks to Pokémon Go, Nintendo’s Market Cap Just Doubled – Fortune
Shares of Japan’s Nintendo nintendo-co-ltd soared another 14% on Tuesday, more than doubling the firm’s market capitalization to 4.5 trillion yen ($42.5 billion) in just seven sessions since the mobile game Pokemon GO was launched in the United States.
The phenomenal success of Pokemon GO – now available in 35 countries, the majority in Europe, and most recently in Canada – has triggered massive buying in Nintendo shares, surprising even some seasoned market players.
“I’ve never seen the trend of such a big company’s shares changing so quickly in such a short period of time,” said Takashi Oba, senior strategist at Okasan Securities.
Nintendo shares ended Tuesday up 14.4% at 31,770 yen, bringing its gains to more than 100% since the launch of the game on July 6.
Turnover in Nintendo shares hit 703.6 billion yen, surpassing the record for trading turnover in individual shares it set on Friday, of 476 billion yen.
Trading in Nintendo shares roughly accounted for a quarter of the entire trading on the Tokyo Stock Exchange’s main board.
The success of Pokemon GO, unforeseen even by its creators, has boosted hopes that Nintendo could capitalize on a line-up of popular characters ranging from Zelda to Super Mario to strengthen its new foray into augmented reality.
“Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock,” said a fund manager at a Japanese asset management firm, who declined to be named as he is not allowed to discuss individual shares.
The fund manager said the big gains were justifiable considering the likely boost to Nintendo’s bottom line.
“Under my rough estimate, the sales from Pokemon GO and upcoming related gadgets will boost net profits by 50 billion yen. Based on that assumption, Nintendo is traded at 30 times profits, which is not unreasonable,” he said.
The popularity of Pokemon GO is producing an unexpected boom in some shares that have a scant link to the game.
Shares in First Baking Co, a bakery firm with annual sales of 25 billion yen, saw its shares rise 18% on Tuesday as the firm sells “Pokemon Bread” among other breads wrapped with character-decorated bags. read more at fortune.com
If you want to see a demo of how Pokemon Go works, this video is helpful. It was done before the release, so it isn’t quite the same as the live game but it gives you a good background of the app and what playing it is like. It has continually developed since the time of this video, allowing for more places or markers to capture the Pokemon treasures.
It is also creating quite the buzz on social media. When the game was released in Canada a couple of days ago, it actually crashed the servers because so many people were trying to download it at the same time. This person’s tweet uses humor to capture the fever around the app.