Pokemon Go Boosts Nintendo Stock, Alphabet Stock To Benefit

  • The mobile AR game Pokemon Go boosted Nintendo's stock by 30 percent and added $9 billion to the company's value in a few days.
  • Pokemon Go has been developed by The Pokemon Company, in which Nintendo owns a 32 percent stake, and Niantic, a spinoff from Alphabet.
  • Alphabet's technology powers, and will continue to power, the emerging and highly profitable sector of AR gaming.

The launch and spectacular initial success of the new Augmented Reality (AR) game Pokemon Go, by Nintendo (OTC:NTDOY), has pushed the value of the company's stock up by a staggering 30 percent in a sudden jump and added $9 billion to Nintendo's market value in just a few days. Pokemon Go represents the first clear breakthrough in AR mobile gaming, an emerging sector that can be expected to grow and lift the stocks of all leading companies in the sector.

Of course, it would have been good to invest before the launch of Pokemon Go. In fact, indications that AR could become a major hit have been available for some time now (and covered by Amigobulls). But all seems to indicate that Pokemon Go is only the first big wave to be followed by other bigger waves, in which case Nintendo's stock will continue to soar, and the stocks of other companies active in the sector will soar as well.

Virtual Reality (VR) technology exploits headsets and other interface devices to place the user in a virtual world with full 360-degree visual and auditory immersion, which permits creating uniquely compelling video-games, VR movies, and next generation theme park experiences. In contrast, AR technology augments the user's perception of the real world with virtual annotations through suitable interface devices.

Typical "serious" applications of AR permit overlaying street directions to the field of view of a user who is looking for a place, or visual instructions to the field of view of a user who has to assemble or repair a piece of equipment. But Pokemon Go adds Pokemon characters to real-life city streets. "The game, which is played on a smartphone, lets people explore their neighborhoods to find virtual Pokemon characters," notes Forbes. "It’s made possible through augmented reality, in which images are layered on top of the real world using the phone’s camera capabilities."

In fact, the game doesn't need expensive headsets and VR/AR viewers: the virtual Pokemons appear on the phone's screen when the camera is pointed at the street. But it's easy to imagine that future versions of the game, or similar games, could use immersive VR/AR headsets linked to the phone to make the experience more life-like.

Pokemon Go is available for iOS and Android mobile devices in the U.S., Australia and New Zealand since a few days ago, noted The Wall Street Journal on July 11. In the U.S., the game has been downloaded by more than two million users on iOS devices and is generating roughly $1.6 million in revenue daily from in-app purchases. These figures continue to grow at a spectacular pace.

It took less than a day from the introduction for Pokemon Go to become the most downloaded and highest-grossing app in the countries where it is available, according to market-data provider App Annie. Data firm SimilarWeb said that the app is about to surpass Twitter among Android users in the U.S. as far as the number of daily active users.

Pokemon Go has been developed by The Pokemon Company, of which Nintendo owns a 32 percent share, and Niantic, a spinoff from Alphabet Inc (NASDAQ:GOOGL)). Niantic was founded in 2010 by John Hanke as Niantic Labs, an internal startup at Google, and spun off as an independent Alphabet company in 2015. The company received $20 million in Series A funding from Alphabet, Nintendo and Pokemon in October 2015, and $5 million more from the same and other investors in February 2016. Before Pokemon Go, Niantic developed Ingress, a science-fiction-themed massively multiuser AR game that attracted a community of avid players but - like all ventures of Alphabet into gaming and social media to date - failed to become a mass hit. However, the strength of Alphabet companies is in technology development, and the company is able to monetize its technology through partnerships with other companies.

"By exploiting the capabilities of smartphones and location technology and through building a unique massively scalable server and global location dataset, we have helped users all around the world have fun, socialize, and get more fit as they play and explore," said Hanks in Niantic's announcement. "Ingress, our first 'real world' game, has given millions of players an entirely new way to see the world around them. We’re excited that Pokemon fans and gamers can now start exploring their very own neighborhoods and cities to capture Pokemon using the Pokemon GO app."

Hanke also revealed that wearable device will soon enable players to enjoy the game "without ever taking their phone out of their pocket or bag." In fact, future versions of Pokemon Go will work with Alphabet's VR/AR headsets such as the low-cost Cardboard headset and higher performance devices under development by Alphabet.

The Cardboard is a smartphone head-mount with lenses and magnets, which can be fastened around the head and used as a headset. Any smartphone with a stereoscopic display and onboard accelerometer for motion sensing - standard features in today's smartphones - can be inserted in the device to generate 3D scenes with associated audio, that the user can enjoy in interactive, immersive VR or AR mode. Therefore, the Cardboard seems the ideal device to enjoy AR games like Pokemon Go.

Investors should consider Nintendo's stock with expectations of future boosts as enhancements to Pokemon Go and new Nintendo AR games become available, and Alphabet's stock with expectations that the company's technology will continue to power, the emerging and highly profitable sector of AR gaming.

Giulio Prisco Giulio Prisco   on Amigobulls :
Author's Disclosures & Disclaimers:
  • I do not hold any positions in the stocks mentioned in this post and don't intend to initiate a position in the next 72 hours
  • I am not an investment advisor, and my opinion should not be treated as investment advice.
  • I am not being compensated for this post (except possibly by Amigobulls).
  • I do not have any business relationship with the companies mentioned in this post.
Amigobulls Disclosures & Disclaimers:

This post has been submitted by an independent external contributor. This author may or may not hold any positions in the stocks discussed. Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. Amigobulls has not verified the author’s positions in the stocks discussed, and does not provide any guarantees in this regard. The author may be paid by Amigobulls for this contribution, under the paid contributors program. However, Amigobulls does not guarantee the authenticity or accuracy of the information provided by the author in this post.

The author may not be a qualified investment advisor. The opinions stated in the post should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Amigobulls does not have any business relationship with any of the companies covered in this post. This post represents the views of the author/contributor and may not reflect the views of Amigobulls.

show more

Comments on this article and NTDOY stock

Do share this awesome post