It’s been a big week for Nintendo, its fans, and investors alike.
In the week since Augmented Reality (AR) game Pokemon Go released in the United States, Australia, and New Zealand, it’s been breaking records and surging the company’s stock value to levels not since since the release of the Wii in late-2006.
Here’s a quick breakdown of the figures:
- A 63.7% jump in company valuation to $28 billion USD.
- 10 million downloads.
- Users are spending nearly twice as much time in-game (43 minutes) than on Instagram (25 minutes) or Snapchat (23 minutes) daily.
- $1.6 million worth of in-app purchases made daily on iOS in the US alone.
- The second-fastest growing app of all time, it took 14 hours to reach #1 on the App Store.
While we don’t have daily active user numbers, we do know it’s expected to peak at around 60% of downloaders.
Beyond the statistics, the game is fun, addictive, gets players moving around their environment, and has managed to bring whole communities together as they strive to become Pokemon masters.
But is all that enough to save a company that has failed to retain its audience’s interest over the last decade? Even with the 60+% rise in stock price, Nintendo’s worth is still 70% less than it was a decade ago.
The failed release of the Nintento Wii U in November 2012 left pundits exclaiming that it was the end of the company’s reign in the game console sector. Iconic game director Shigeru Miyamoto put the failure down to increased interest in other revolutionary devices such as tablets.
“I think the assumption is we were trying to create a game machine and a tablet and really what we were trying to do was create a game system that gave you tablet-like functionality for controlling that system and give you two screens that would allow different people in the living room to play in different ways. …. Unfortunately, because tablets, at the time, were adding more and more functionality and becoming more and more prominent, this system and this approach didn’t mesh well with the period in which we released it,” he told Fortune.
It’s a similar argument to the one made by many companies in the industry of late. Most notable of these was Konami, which fired one of their few successful game designers, the esteemed Hideo Kojima, and then launched a HD release of his most beloved game, Metal Gear Solid 3: Snake Eater…as a pachinko machine.
Their justification – what little came after the industry essentially turned its back on Konami due to their mistreatment of Kojima – was that traditional video games weren’t making as much money as they once did.
That Nintendo is still making games – and releasing a new console, the NX, in the near future – comes mainly down to the nostalgia of its most devoted fans. Mario, Link, the Smash Brothers ensemble; these are the characters that hold Nintendo’s future in their hands. Them, and Shigeru Miyamoto himself, especially considering the death of CEO Satoru Iwata last year.
Pokemon Go now has more responsibility than all of Nintendo’s other franchises combined. Its innovative use of modern technology allows players to experience the series as they always hoped they could: in real-life, albeit an augmented version of it.
This time around, their success could actually mark the beginning of the end, if they let nostalgia be the driving factor for Pokemon Go’s success once it has released globally. We need only to look at the likes of King Digital Entertainment (creators of Candy Crush Saga) and Zynga (Farmville) to be reminded that brand allegiance has no value in the mobile phone game marketplace.
Nintendo is already talking about releasing similar games for the Animal Crossing and Fire Emblem franchises, but there’s hardly a comparison to be found. According to VGSales, Pokemon is the highest-grossing game franchise in the world, and the second-best selling. Animal Crossing ranks in at #49 on the best sellers list. Fire Emblem does not make the top 100.
Pokemon Go has another issue to overcome as well: the perception that AR is just another gimmick. Following the epic failure of Google Glass, and the rise of Virtual Reality in the years following, AR has failed to validate itself in many aspects. The system surely has potential, but until that’s definitively proven, Pokemon Go’s longevity will be hard to predict.
All it will take is one more major privacy, security, or safety issue, one more cry that the game is turning players into irreverent jerks, and it could all come undone.
Keep in mind, we make these points not as pessimists or detractors – we’ve been known to set lures around town during lunch breaks – but because it will be fascinating to see how Nintendo handles what’s to come.
Will Pokemon Go continue to trend up and up, or will it go the same way as Nintendo’s last AR game, Miitomo, and fade into obscurity?
Will the company be able to handle all the publicity and controversy sure to continue their way, or will they, like (Kid) Icarus, fly too close to the sun?
We’ll be watching on with great interest.