Nintendo Breaks Records With Pokemon Go

 

Pokemon Go is the most popular mobile game in history.Pokemon Go has great growth potential as it releases in more countries and utilizes new technology.The app is incredibly profitable - and not just for Nintendo.By Austin Sarles, Co-Founder and Director of Marketing at PeeptradePokemon Go was released to the public on July 6, 2016. Within a day, the app was on more Android phones than Tinder in the US. Within two days, the app was installed on 5.16% of all Android devices in the US. As a result, Nintendo Co.'s stock (OTCPK:NTDOY) surged 20% in the company's best day of trading in over 30 years. Nintendo also added $9 billion to its market cap. But how will this impact Nintendo's growth moving forward? Is the game just a fad or is it the beginning of something more promising? 

 Not a fad

With Pokemon Go's recent success, many are calling the game a fad. Fair enough. A closer look at the numbers, though, suggests this isn't the case. The app has already been downloaded 7.5 million times in the US on Google Play and the iOS App Store, according to Sensor Tower. Further, according toSurveyMonkey, the app is the biggest mobile game in U.S. history as measured by daily active users.Numbers have not come in regarding Pokemon Go's success abroad, but they look promising. Due to the app not being available in the UK, continental Europe (aside from Germany), and Japan, many users were attempting to download the app using an APK, bypassing the official app store. Traffic to a popular APK website increased 600%, from roughly 600K visits to 4 million visits on the day of the app's release. Further, when asked why the app wasn't already available in Japan, Pokemon Co. declined to answer. However, analysts are speculating that overloaded game servers and safety issues are a concern. That's right. The game might be so popular that it crashes servers and so addicting that it might cause traffic accidents as users hunt for Pokemon.What the numbers sayPerhaps the most impressive numbers coming from the Pokemon Go release are their numbers regarding time spent in-app. With a shockingly high 43 minutes per day, Pokemon Go's average usage time is higher than popular apps like WhatsApp, Instagram, and Snapchat, according to SimilarWeb. Additionally, in a poll on our Twitter feed, 38% of respondents indicated that they spend more than three hours a day playing Pokemon Go.

Equally impressive are Pokemon Go's daily active user numbers. As an example, Pokemon Go's daily active user population is currently larger than that of Twitter. The numbers don't lie. Pokemon Go is certainly one of the most successful mobile apps in modern history. Period. Keep in mind, also, that these numbers don't include data from Germany or the rest of Europe, where the app is expected to launch soon. 

 Bugs and other problemsDespite the success of the app, there have been a huge number of complaints. Bugs in the game and server problems were driving some users crazy. However, Niantic (the developer of Pokemon Go) was quick to respond. It recently announced that it would be making updates to the app every two weeks, according to IGN News. This is good news for Nintendo investors, as bugs and other glitches drive potential users away from the app.MonetizationPokemon Go set another record with its app with in-app purchases. While the app is free, users have the option of buying items like Pokeballs and potions in the game's shop. Sales from these in-app purchases have led Pokemon Go to making $1.6 million per day in the iOS App Store alone, according toTechCrunch. Other estimates indicate numbers as high as $2.3 million a day.Why I'm bullish on NintendoThe numbers discussed in the article really tell the whole story. Not only does the app have huge download, daily active user, and time spent in-app numbers, it's also making a lot of money. You have to remember that $1.6 million in revenue per day figure from before only includes data from the iOS App Store. The Google Play numbers have yet to come out, but I'm confident they'll be even higher as the game has been more popular with Android users.

To put the numbers in context, Pokemon Go is already the fifth top grossing app in the U.S., beating Clash of Clans and Candy Crush in the few days since its July 6th release. It also topped the charts in both downloads and revenue in just two days in Australia and New Zealand. This is another reason I'm bullish. With all the success Pokemon Go has had, you must remember that the app has yet to be released in the UK, continental Europe (aside from Germany), and Japan. The growth potential for both Nintendo and Niantic is huge.Speaking of growth, those familiar with the game know that the minds behind Pokemon Go have only chosen to include the 150 original Pokemon. There are still another 570 Pokemon that Niantic can include in the game, giving rise to speculation about the future updates to the app. These updates could potentially keep Pokemon Go's daily active user and time spent in-app numbers up.Further, this app indicates incredible innovation and leadership from Nintendo. Pokemon Go is truly the first augmented reality app that people seem to love. In fact, one user was so addicted to playing the game he couldn't even put it down while his wife was in labor! Moreover, users don't seem to mind that they are forced to walk to play the game and hatch their eggs, they find it exciting - and that's also promising. Nintendo now sees the potential behind AR apps and will likely continue pursuing this in its future games.So, it's obvious that Nintendo is a huge winner here. As indicated earlier, the game's success led to an over 20% increase in its stock price and led to a $9 billion increase to Nintendo's value. However, Nintendo is not the only company this week with a smile on its face.Other winners in Pokemon Go's successWe noted earlier that users spend about 45 minutes a day playing Pokemon Go. Curious, I looked into how much data this would use. Interestingly, a report from Android Central illustrated that an hour of gameplay uses about 20MB of mobile data. This adds up to about 0.6GB of data a month for the average user. And if our Twitter poll indicates anything, it's that the 43-minute average indicated by SimilarWeb is going to rise. Significantly.

So it's fair to say that Pokemon Go is going to considerably increase theaverage user's data usage of 1.8GB per month. This is good news for data providers like AT&T (NYSE:T) and Verizon (NYSE:VZ). Both companies could see a rise in larger data packages and will certainly see an increase in the penalty charges they levy on users for exceeding their monthly data limits. Given Pokemon Go's popularity and potential for international growth, it's not unreasonable to predict a noticeable increase in revenue for AT&T and Verizon in the coming months.Other notable winners are Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL). Remember, that $1.6 million per day figure from before isn't just going to Nintendo and Niantic. There are significant portions of this going to the Pokemon Co. (of which Nintendo owns 32%), and Apple and Google, which both take a 30% cut of in-app purchases through their stores.Final thoughtsIf Pokemon Go is a fad, it is certainly one that is going to make a whole lot of people a whole lot of money. The numbers from the past week from the United States and Australia are already very promising, and the app has yet to launch in Japan. For both Niantic and Nintendo's first real venture into an augmented reality game of this nature, they certainly knocked it out of the park. 

SA.