Saturday 22 October 2016

Nintendo share spike slowed by stalled Japanese Pokemon launch, but still up 86pc

Published 21/07/2016 | 02:30

Pokemon Go gamers in Rome
Pokemon Go gamers in Rome
Pokemon Go in Saudi Arabia

Gamers in Japan, home of Nintendo's Pokemon, waited in vain yesterday for the launch of its smash-hit mobile phone game, amid media reports that the developers behind it had hit the brakes over concerns that manic demand would overload server capacity.

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Nintendo's shares suffered a rare bad day since Pokemon GO took the world by storm, tumbling 13pc to around 27,765 yen (€236m) on the disappointment.

Even so, the stock has gained 86pc since its US launch earlier this month, adding $17bn (€15.4bn) to its market capitalisation.

"Isn't Japan the home of Pokemon? I beg them to hurry up!," said Toshihide Onchi, a 40-year-old system engineer who took part in the trial of the game's beta version.

Late on Tuesday technology news site TechCrunch and other media outlets reported the launch would take place the following day. TechCrunch later reported a postponement, but said the rollout for one of the world's most critical gaming markets was still imminent.

A spokeswoman for Pokemon Company, which created the game along with Nintendo and Google-spinoff Niantic, declined to comment on the report, reiterating that nothing had been decided over the Japan launch date.

Nintendo referred any queries regarding Pokemon GO to Pokemon Company.

Investors and analysts are betting that the success of game, which is available officially in 35 countries - including Ireland - and played in many more, will be transformational for Nintendo. While Pokemon GO will not prove a major direct boost, it could prompt Nintendo to cash in more effectively on an extensive cupboard of characters.

Until Pokemon GO, the company had focused on more profitable consoles and snubbed mobile games.

Niantic chief executive John Hanke told Reuters on Friday the developers were being extra-cautious in Japan, given the level of expectation and sheer number of players.

"The technical challenge for us is having enough server capacity on the back end to handle that number of users," he said.

Pokemon GO, which marries a classic 20-year-old franchise with augmented reality, is on its way to becoming the first mobile game to break the $4bn-per-year barrier, beating Candy Crush Saga, according to Macquarie Research.

Others too have benefited from the craze. Shares of Japan's locally listed McDonald's affiliate ended up 9.8pc after the TechCrunch report said the fast-food chain operator would become the game's first sponsor.

TechCrunch said the sponsorship would see McDonald's 3,000-plus fast food restaurants across Japan become "gyms", or battlegrounds, for Pokemon collectors. The chain already gives away Pokemon-themed toys with its Happy Meals.

McDonald's Japan said yesterday that it planned to collaborate on the game "soon." The statement said that it will announce details of the collaboration when it is ready to do so.

Chang-Ran Kim/reuters

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