Pokemon Go Sizzles on Launch

Nintendo Has a Monster Hit on Its Hands

Nintendo’s launch last week of Pokemon Go has become a phenomenal overnight success and points to a potential comeback for a company that failed to adjust to a new era of mobility. More than two decades ago, the Pokemon franchise enabled Nintendo to create a market for handheld game consoles. Now the company is pushing the frenzy over to smartphones.

For years, Nintendo resisted bringing its games to smartphones and tablets. It was a decision that echoed an obstinate attitude from the Japanese firm, or at least an atmosphere of denial. But Nintendo has come to the realization that it needs to retain existing fans as well as reach out to new audiences. Earlier this year Nintendo waded into the mobile waters with Miitomo, a game with short-lived success (see Miitomo: Nintendo’s Foray into a Brave New World). Sony recently made a similar move in releasing titles on iOS and Android (see Sony Launches Games for iOS and Android).

Pokemon Go is an augmented-reality game created in a collaboration between Nintendo, the Pokemon Company and Niantic Labs, a former Google subsidiary. Pokemon Go lets players live out their Pokemon fantasies using a smartphone’s location sensors to find and catch virtual pocket monsters. Gamers can also interact with others around them, as well as battle, train and trade virtual Pokemon appearing as though they’re living in front of their eyes.

Pokemon Go has become Nintendo’s biggest release this year and one of the few recent bright spots for the company. With its long-awaited debut in the mobile market, Nintendo’s plan was to find new audiences and bring them to its dedicated gaming devices. But with Pokemon Go, the company is helping fans rediscover their lost love for the Pokemon franchise. It’s an indication that there’s still demand for Nintendo’s content among a new generation of fans as well as a maturing audience looking for a touch of childhood sentiment. The game has some positive side-effects — it’s getting children from behind screens to walking around, although some older players are (alarmingly) driving and playing.

Pokemon Go is free to download, with revenue coming from in-app purchases of game items and virtual coins. Given the geolocation dimension to the game, there’s considerable scope for Nintendo to work with Niantic Labs to add further revenue streams related to location-specific advertising or encouraging players to visit particular spots.

Pokemon and augmented reality make a good team. For Nintendo, it’s a sign that its other franchises could port well to iOS and Android devices. This could include venerable characters such as Mario and Zelda. The early success of Pokemon Go is not only a positive for Nintendo but for the mobile game industry as a whole.

Yet Rovio’s Angry Birds is a good illustration of how mobile gaming brands can be hugely engaging but find their appeal waning as audiences move on. Nintendo must act quickly to satisfy pent-up demand for Pokemon Go in other markets while the franchise is red hot. It must ensure players get a legitimate version of the app designed for their country, rather than a pirate version or a malware-infected lure. An outbreak of Pokemon-inspired malware would be extremely damaging to Nintendo’s brand.

For Nintendo, the time was ripe for a fresh approach. The Pokemon game is so successful, its servers appear to be struggling at the moment. It’s an encouraging indicator.