Nintendo market value overtakes Sony on Pokemon Go success

The Japanese game company’s market value stood at 4.5 trillion yen ( £32 billion) as shares soared by more than 14% in Tokyo

Nintendo ended Tuesday up 14.4 per cent at 31,770 yen, bringing its gains to more than 100 per cent since the launch of the game on July 6 (Getty)

Nintendo continued to thrive on Pokémon Go’s global success as the augmented reality game pushed the company’s market value above Sony’s.

The Japanese game company’s market value stood at 4.5 trillion yen ($42.5 billion; £32 billion) as shares soared by more than 14 per cent on the Tokyo stock market on Tuesday, after a rally lasting more than a week.

This means Nintendo is now bigger than Sony, one of Japan best known companies, by more than 400 billion yen ($3 billion ; £2.2 billion)

Nintendo ended Tuesday up 14.4 per cent at 31,770 yen, bringing its gains to more than 100 per cent since the launch of the game on July 6.

On Friday, Nintendo made Tokyo stock market history by setting the record for the most shares ever traded in Japan.

The video game giant traded 476 billion yen ($4.5 billion; £3.5 billion) worth of shares in one day, according to Bloomberg data, breaking the record previously held by energy company Tokyo Electric.

“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.

Pokémon Go, in which players physically hunt for Pokémon in real life locations, has topped the “most downloaded” charts for both the Android and Apple app stores faster than any other game in history

The excitement surrounding the game shows Nintendo has finally embraced the smartphone as legitimate medium for its games.

Nintendo's previous resistance to mobile gaming was in part to protect its legacy console business, but the gaming company yielded in March 2015, making a partnership with mobile firm DeNA to push into smartphone apps and games.

Miitomo, Nintendo's first-ever mobile game, was released worldwide in March this year.

Pokémon Go’s unforeseen success could be an opportunity for the company to capitalise on other beloved characters such as Zelda or Super Mario.

“The increase in the firm’s market capitalisation – which has doubled to $42 billion - means it’s bigger than Hermes, Sony, Yahoo and Glencore,”said Neil Wilson, market analyst at ETX capital.

“Pokémon Go is a game-changer for Nintendo – a clear sign that it’s embraced the smartphone gaming revolution. Nintendo also has some aces up its sleeve in characters like Mario and Zelda, which could be the next stars of mobile gaming. Nintendo is better positioned than others for sure,” he added.

Wilson warned that to keep making Nintendo money the craze has to continue which is unlikely to happen in the mobile gaming market.

“To old City hacks the share’s bounce looks a little overdone and it’s broken so far clear of any support levels that a fall could be nasty for those who bought into the rally. Earnings for Nintendo from the game are hard to gauge exactly as it owns an undisclosed stake in app maker Niantic.

“Also monetising the game could be more difficult than acquiring fans and once Apple and Google cream off their cut, revenues are unlikely to be as big as the game,” Wilson said.

Profits will be split up between several companies.

These include Apple and Google, which take a share of sales through their stores, Niantic, the developer and distributor of the game and Nintendo which owns about a third of the Pokémon company and is a part-owner of Niantic.

Nintendo is planning to launch four more games for smartphone by the end of March 2017.

Pokémon Go is now available in 35 countries and most recently in Canada.

It was released on Thursday in the UK. It can be download on iOS and Android, through either iTunes or Google Play.