Pokemon Go and Nintendo (and Brexit)
I made a point during the whole Brexit debacle to point out that the stock market is often a poor indicator of reality. The doom and gloomers in the Remain camp jumped immediately on the news that the market in the UK was dropping after the Leave vote.
I had argued that these were knee jerk reactions and didn't represent the real impacts at all. Hell, they couldn't, not only is the UK still part of the EU, they haven't even triggered article 50 to begin the process. If nothing has changed, why then the sudden plunge? Simple, uncertainty combined with idiocy.
I also made a (seemingly rather good) prediction; Smart investors should have waited until about 24 hours after the Leave vote, buy a shit ton of UK stock and wait for the market to rebound. And rebound it did. Not back to where it was necessarily. But it actually turned out exactly as I expected. It rose enough that anyone who bought shortly after the Leave vote, if they sold now would make a rather tidy return on investment.
The Remain group still seems to think that the impact on the markets was somehow something more.
So, enter Nintendo and Pokémon Go. If you think that the people driving the stock markets have any brains, you need look no further. Nintendo stocks shot through the roof when Pokémon Go became an overnight hit. And even remained there for a few weeks. But, Nintendo didn't create the game and isn't seeing much of any return for it. And anyone who had actually been following it knew that. Niantic wrote the game. It is free. I think it might be ad supported, I didn't really try it myself. Point is though, however the game is monetized directly or indirectly, the bulk of that goes to Niantic. Nintendo will make some money in the form of royalties and licensing fees most likely.
Let me repeat, nobody directly involved hid this, lied about it or alluded otherwise. There was no reason to dump excessive money into Nintendo stocks. Sure, some increase in value makes sense. Nintendo will likely make some decent licensing revenue this year, but since they aren't directly monetizing the app they aren't the primary benefactor here. Investors made a knee jerk reaction. It had zero reflection on the true state of things. And somehow, only now, weeks later, people seem to be realizing this and the stocks are adjusting.
Did it positively impact Nintendo? Sure. Just as the knee jerk reaction in Brexit had real world negative consequences in the UK. And, just as with Brexit, the longer term story is something entirely different. If Nintendo does nothing, this rise in stock, in the long run, will be naught but a blip on the radar. How people react to news in the stock market is rarely a clear indicator for the future.
To keep this more inline with my Pokémon centric title; the only way this works out well for Nintendo is if they use this momentum to their advantage and profit from the Pokémon craze. I don't think this game will last long. People are starting to realize it isn't a game so much as a social exercise app (nothing wrong with that, it just isn't a traditionally popular category of app). The hype will die I think unless Nintendo does something else to fan the Pokémon fever.
In my opinion... Pokémon Go is great idea, poorly executed. It really seems like it is primarily Ingress (Niantic's originally claim to fame) with a Pokémon theme applied. I think Nintendo would have done a better job on their own. Or perhaps they should have bought out Niantic and integrated their engine with more traditional Pokémon gaming elements. I think it would have had staying power then.
Again, absolutely nothing wrong with the "go outside and do something" style. There is just unbelievably little actual "game" to it.
I had argued that these were knee jerk reactions and didn't represent the real impacts at all. Hell, they couldn't, not only is the UK still part of the EU, they haven't even triggered article 50 to begin the process. If nothing has changed, why then the sudden plunge? Simple, uncertainty combined with idiocy.
I also made a (seemingly rather good) prediction; Smart investors should have waited until about 24 hours after the Leave vote, buy a shit ton of UK stock and wait for the market to rebound. And rebound it did. Not back to where it was necessarily. But it actually turned out exactly as I expected. It rose enough that anyone who bought shortly after the Leave vote, if they sold now would make a rather tidy return on investment.
The Remain group still seems to think that the impact on the markets was somehow something more.
So, enter Nintendo and Pokémon Go. If you think that the people driving the stock markets have any brains, you need look no further. Nintendo stocks shot through the roof when Pokémon Go became an overnight hit. And even remained there for a few weeks. But, Nintendo didn't create the game and isn't seeing much of any return for it. And anyone who had actually been following it knew that. Niantic wrote the game. It is free. I think it might be ad supported, I didn't really try it myself. Point is though, however the game is monetized directly or indirectly, the bulk of that goes to Niantic. Nintendo will make some money in the form of royalties and licensing fees most likely.
Let me repeat, nobody directly involved hid this, lied about it or alluded otherwise. There was no reason to dump excessive money into Nintendo stocks. Sure, some increase in value makes sense. Nintendo will likely make some decent licensing revenue this year, but since they aren't directly monetizing the app they aren't the primary benefactor here. Investors made a knee jerk reaction. It had zero reflection on the true state of things. And somehow, only now, weeks later, people seem to be realizing this and the stocks are adjusting.
Did it positively impact Nintendo? Sure. Just as the knee jerk reaction in Brexit had real world negative consequences in the UK. And, just as with Brexit, the longer term story is something entirely different. If Nintendo does nothing, this rise in stock, in the long run, will be naught but a blip on the radar. How people react to news in the stock market is rarely a clear indicator for the future.
To keep this more inline with my Pokémon centric title; the only way this works out well for Nintendo is if they use this momentum to their advantage and profit from the Pokémon craze. I don't think this game will last long. People are starting to realize it isn't a game so much as a social exercise app (nothing wrong with that, it just isn't a traditionally popular category of app). The hype will die I think unless Nintendo does something else to fan the Pokémon fever.
In my opinion... Pokémon Go is great idea, poorly executed. It really seems like it is primarily Ingress (Niantic's originally claim to fame) with a Pokémon theme applied. I think Nintendo would have done a better job on their own. Or perhaps they should have bought out Niantic and integrated their engine with more traditional Pokémon gaming elements. I think it would have had staying power then.
Again, absolutely nothing wrong with the "go outside and do something" style. There is just unbelievably little actual "game" to it.
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