Pokémon Go started off as a record-breaking mobile game, but quickly transcended into an unexpected cultural phenomenon. Earlier this week, iDigitalTimes’ own Apolon reported the success of Pokémon Go grabbed the attention of the financial market, which enabled Nintendo to soar 8.84 percent over two days Investors looking to make a quick turnaround profit are nothing new. What is surprising is the rate Nintendo’s market value has continued to surge. According to a Reuters report via The Guardian on Tuesday, Nintendo’s market value has increased by 100 percent following the Pokémon Go craze. Yes ladies and gents, Nintendo’s value has doubled!
After seven trading days, Nintendo’s market capitalization is now worth 4.5 trillion yen, or $42.3 billion USD. What’s more, Nintendo share transactions accounted for 25 percent of all trades on the Tokyo Stock Exchange’s main board. It’s completely unprecedented for Nintendo.
“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 released in Australia and the U.S. on July 6. Now, Pokémon Go is available in 35 countries, expanding across the majority of Europe as well as Canada. The game finally arrives in Japan tomorrow.
While Pokémon Go continues to roll out in more countries in the short term, speculators foresee long-term growth for Nintendo. Other iconic characters, from the Mario Bros. to Zelda, offer Nintendo a strong lineup to create more apps in the future. What’s more, Niantic has also made Nintendo a strong player in virtual and augmented reality technology, an area that draws more interest every day.
“Virtual reality and augmented reality have been a focus of the market but hardly anyone was expecting Nintendo in this area. Suddenly Nintendo has become an AR-related stock,” said a fund manager at a Japanese asset management firm. The Guardian’s source asked to remain anonymous as he is not allowed to discuss individual shares. That said, the fund manager couldn’t hide his excitement for Nintendo’s performance:
“Under my rough estimate, the sales from Pokémon Go and upcoming related gadgets will boost net profits by 50 billion yen. Based on that assumption, Nintendo is traded at 30 times profits, which is not unreasonable.”
