On July 4, Nintendo and Niantic released Pokémon Go, a new augmented reality game for Android and Apple smartphones. In less than a week, the popularity of game, which allows players to ‘catch’ Pokémon as they walk around in the real world, has been nothing short of historic, topping the Apple and Android app stores more quickly than any other game in history.
First rolled out in Australia and New Zealand, followed by the US on July 8, Pokémon Go already has more daily active users than Tinder, and is expected to overtake Twitter imminently as well. According to Business Insider, since its launch over three percent of Android users in the US have been playing the game on a daily basis, just 0.5 percent behind the social media giant.
Last September, Nintendo announced it was finally entering the mobile industry, but had kept most details under wraps
This rapid uptake, however, has resulted in some issues for the app, causing servers to crash in some places. Subsequently, Niantic CEO John Hanke announced the release of the game has been “paused” in Europe, Canada and elsewhere until these issues have been resolved.
The game comes at a crucial point for Nintendo. For years, the Kyoto-headquartered consumer electronics group has been fast falling behind in the gaming world. Despite the ongoing popularity of its biggest hits, such as Super Mario and Zelda, Nintendo’s downward performance, which saw its revenue fall by eight percent ($4.53bn) in the last fiscal year, is attributed to its reluctance to transition to smartphone apps.
Unsurprisingly, albeit long overdue, last September, Nintendo announced that it was finally entering the mobile industry, but had kept most details under wraps.
As the figures show, the launch of its new business model was spectacular; as stated by the Financial Times, Nintendo’s shares rose rapidly by nine percent on July 8. And then, after a very enthusiastic weekend, they surged by 25 percent, while the company’s market capitalisation soared to $7bn following a flurry of investment. As such, if Pokémon Go proves to have staying power with consumers, the game may well mark the turnaround for this much-loved brand, as well as a new era for augmented reality gaming.
Investor confusion [UPDATE July 25]
Following the launch, Nintendo issued a statement which has taken many investors by surprise. Despite the association between the widely popular franchise and the Kyoto-headquartered gaming group, Nintendo pointed out that it does not own or make Pokémon Go. Rather, the game is distributed solely by Niantic, in which both Nintendo and Google have shares.
While the launch of the game in Australia, New Zealand and the US sent Nintendo’s shares soaring to more then double, according to Reuters, on the July 25 shares plummeted by 18 percent, as a direct result of the press release.
Despite the hit, Nintendo still stands in good stead to use its currently publicity and Pokémon Go’s global appeal to enhance earnings.