Second, the yen is awfully strong now, up more than 10% this year. This could be a negative for Japanese companies. Third, it is important to remember that Nintendo does not fully own the franchise. The company is a part owner in the independent Pokémon Company (32% stake) as well as Niantic, the American software developer who developed the game. Any revenue earned from the gaming app must be shared among the partners.
Will Nintendo go higher?
Nonetheless, Nintendo’s stock outperformance shows that its foray into mobile platforms has an enormous potential. Moreover, the phenomenon success of Pokémon Go may benefit other companies. While the app is free to download and play, additional items are payable. This means that every time players buy these items, Apple and Google, which dominate the app markets, make money.
At around ¥25-30,000, the company’s stock price is still considerably lower than the high it hit in 2007 when Nintendo was trading in ¥60-70,000 range. With vast media coverage on Nintendo’s stock and Pokémon GO, interest in the company remains strong.
Looking at the company’s stock value and volume over the last 10 years, we can see a mammoth volume spike recently. At IG, 98% of our client accounts who has open positions in Nintendo expect the company’s share price to rise, as of 20 July.
Don’t forget, Pokémon Go still has not been released in Japan, ironically. After releases in the US, most of Europe, Australia and New Zealand, Niantic’s CEO John Hanke expected the app to be released in the land of the Pokémon by the end of July. We could see Nintendo’s stock getting another boost.