Nostalgic millennials are in love with Pokemon Go. So are Nintendo investors.
After players enjoyed their first full weekend roaming about their neighborhoods capturing virtual Pokemon, Nintendo’s share price has soared. The stock opened today (July 11) at 18,595 Japanese yen ($182.1) per share, up 14% from its closing price on Friday. When trading on the Tokyo Stock Exchange closed, the price had hit 20,260 yen ($198.41), a day-to-day increase of 24.52%.
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The company is now valued at 2.87 trillion yen, or $28 billion, a 63.7% jump from its $17.1 billion closing valuation on Wednesday (July 6). (
Nintendo shares still have a long way to go before they reach their former heights, however. On October 30, 2007, about one year after the Wii home console came out, Nintendo stock was worth $625 per share, valuing the company at $79.9 billion.
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Back then, Nintendo’s business consisted of selling hardware that plugged into a television. As consumers started to get their gaming fix on smartphones, Nintendo suffered from flagging sales.
Pokemon Go marks Nintendo’s second-ever mobile title (the first is a Kafkaesque social networking game called Miitomo). Smartphone owners have flocked to it, coming for the nostalgia and staying for the game play, which turns one’s immediate surroundings into a hunting ground for creatures. The game’s servers have crashed repeatedly from the overload.
It’s not clear if Pokemon Go and other mobile titles can help revive the company in the long run. To do so, Nintendo needs to transition from a company that makes most of its money from hardware and discs to a company that makes its money from tiny $0.99 transactions.
But smartphone owners have short attention spans. Mobile game companies like King and Zynga saw their stock prices plummet after they failed to recreate one-hit wonders like Candy Crush Saga and Words With Friends. Nintendo could easily join their ranks if the Pokemon Go craze fades.
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