Pokémon Go adds $7bn to Nintendo’s value as shares rise 25%

The game  has already overtaken the dating app Tinder

Zlata Rodionova@zlata07
Monday 11 July 2016 16:06
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Pokémon Go uses augmented reality to let players catch Pokémon from their phones in real life locations
Pokémon Go uses augmented reality to let players catch Pokémon from their phones in real life locations

Pokémon Go has sent Nintendo shares up by nearly 25 per cent, adding $7 billion (£5.39 billion) to the market value of the company in just a few days.

Shares in the gaming company jumped by 24.52 per cent on Monday to 20,260 yen (153,50) on the Tokyo Stock Exchange, the company’s best day since 1983. This followed Friday gains of about 8.9 per cent.

Pokémon Go uses augmented reality to let players catch Pokémon from their phones in real life locations.

The game has been available in the US, Australia and New Zealand since July 6 and has already overtaken the dating app Tinder.

The app was downloaded on more than 5 per cent of the total number of Android phones in operation. In comparison, Tinder is only active on 2 per cent of devices, according to data from Similar Web, which looked at the number of active users on the app.

“If nothing else, Pokémon Go has shown that there are 'dormant' Nintendo fans eager to trial its content for smartphones,” Deutsche Bank analysts said in a note.

“The really interesting thing is that this all happened without much promotion. The game has done all this — getting to the top of the download rankings — by itself and that shows you the power of the brand,” David Gibson, an analyst at Macquarie who covers Nintendo, told the Financial Times.

Pokémon Go turns man's house into a gym, causes huge problems

But others said the game’s success might be short lived and questioned if Pokémon Go could really boost Nintendo’s earnings in the long run.

“Now if we were talking about its next generation console becoming the core platform for gamers, then that would be something to get excited about - but at the moment, this alone is not enough,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.

Nintendo’s annual revenue has been in decline since 2012.

The company earnings forecast full-year profit fell short of analysts’ estimates with Wii U sales predicted to fall to 800,000 units from 3.26 million, while those of 3DS were to drop 5 million from 6.79 million.

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

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

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