By Jacob Wolinsky. Originally published at ValueWalk.
Shares of Nintendo are soaring again this evening during the Japanese trading session, amid the craze over the new app, Pokemon Go. The stock seems to have really taken off over this weekend with some wild stories already including dead bodies found, people entering restricted military bases, and we are still awaiting our first fatality from the game. Shares were also higher on Friday up by about 10 percent. A quick search of Google trends shows that the game has even beaten one of the most popular search terms (albeit for a short period of time) on Saturday and looks to be pulling ahead today, a feat which Brexit also recently pulled off, and supposedly does not happen often….
Below are what the analysts are saying in terms of what this means for Nintendo stock and other video game makers followed by some of the best tweets on the topic
Deutsche Bank
Despite the substantial success of Pokémon Go in the initial few days since its launch into only three countries, we still view Pokémon Go as a “leadoff hitter” for Nintendo’s foray into mobile gaming. We view Animal Crossing and Fire Emblem, slated for fall 2016, and Zelda for mobile possibly coming in spring 2017, as the real big hitters to drive Nintendo to score high in mobile. FX headwinds may be a near-term drag, but we would see any dips as a particularly attractive buying opportunity, as we consider FY3/2017 a transitional/watershed year. Buy. Pokémon Go off to a strong start, but retention to be key to financial success
We highlight three components to enduring mobile success: 1) maximizing downloads; 2) retaining as many as possible of these users with good content; and 3) ensuring longevity through smooth operations. With regard to the first point, Pokémon Go has gone beyond success to become a phenomenon, topping the revenue grossing charts in the three regions into which it has been launched: the US, Australia and New Zealand. The company has stopped rolling out to new countries, as demand is overloading its server capacity. How Niantic deals with issues in the coming weeks will determine the longer-term financial success of Pokémon Go, in our view.
JPMorgan
Positive example of Nintendo IP leverage, but careful assessment of the earnings impact is necessary: Nintendo’s share price increased sharply on July 8—the shares closed up 9% for the morning session versus a 0.6% decrease for Topix—in response to a strong debut by the smartphone app Pokemon GO, which was released in the US on July 7. While a careful assessment of the impact on Nintendo’s earnings is necessary, we believe this could be a positive story for the use of Nintendo platform franchise IP in the smartphone game space.
ICBC
Shares in Nintendo (7974.JP) surged on Friday as consumers flocked to try out its new Pokemon GO smartphone game. Wednesday’s launch of Pokemon GO in the US has seen the title shoot up to become the No. 1 free app in iTunes store.
The company has promised four more smartphone games in the financial year to end-March and has said it expects mobile gaming to help boost annual operating profit by a third to 45 billion yen ($450 million).
From July 8th
Morgan Stanley
iOS/Android app Pokemon GO was released in the US on Jul 6 (app jointly developed by Pokemon Company and Niantic, Inc, Nintendo also a participant in development/production of the Pokemon GO Plus dedicated device). With the app securing top place for both sales and downloads in US iOS App Store rankings on Jul 7, Nintendo’s shares advanced by up to 11.6% on Jul 8 as the market acted on expectations of a big boost from the app to Nintendo’s EPS. Pokemon GO is basically free with charges for some items, and we view it as a game targeted mainly at younger players and unlikely to use a monetization scheme targeted at a small number of users paying high charges (operationally too there is a cautious stance on charging). Hence in evaluating possible effects on Nintendo’s share price we think those of (1) the new NX console launching in 4Q and (2) collaborative apps business with DeNA, which we think has the potential to increase contact time with the firm’s IPs and lure users to existing business, will be the greater.
And some of the best tweets
CalPERS decreases real assets allocation, increases allocation to Pokemon.
— Gloom (@_oldmangloom) July 11, 2016
Pokemon Go on track to be > than Twitter this week. Wow. pic.twitter.com/BgmGGsgcsB
— Mike Dudas (@mdudas) July 11, 2016
If you think playing #Pokemon GO near a Police Station at night is a good idea right now, you’re just plain stupid! pic.twitter.com/BZQfkAbK2Y
— Barnacules (@Barnacules) July 11, 2016
“I know we’re on vacation and it’s an hour away, but we can 100% go to this really awesome Pokémon spot.” – me as an adult discussing life
— Hannah Hart (@harto) July 11, 2016
UPDATE: Nintendo shares up 25%, hitting the daily limit on the Tokyo Stock Exchange, amid Pokémon Go craze
— BNO News (@BNONews) July 11, 2016
The suspects accused of robbing people playing Pokemon Go have been charged. https://t.co/UMGH4fOLN7
— Ninja Economics (@NinjaEconomics) July 11, 2016
When your girlfriend is Pokemon af ??? pic.twitter.com/X2R09vjLUL
— Jordan?? (@jordan_mccloud) July 11, 2016
Pokemon GO is slowly becoming the best exercise app out there
— Life Hacks (@LifeHacks) July 11, 2016
‘POKEMON’ game used to stage armed robberies… https://t.co/zARrOpar1q
— DRUDGE REPORT (@DRUDGE_REPORT) July 11, 2016
What do you think of the game and/or stock weigh in below
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