Pokémon GO Helps Nintendo’s Market Value Soar Above Sony
It has been remarkable to see what Pokémon GO has achieved in such a short space of time. Now available in more than 30 countries, it is estimated to have been downloaded by more than 50 million players worldwide.
That success has seen the company’s share price rapidly climb, similarly impacting their market value rapidly which is now sat at $39.8 billion. That narrowly eclipses rival Sony who sit at $38.38 billion.
The sudden spike is concerning analysts, who rightly point out that investors could lose interest if Nintendo can’t maintain business momentum. They are now waiting to see how well Pokémon GO will perform in other countries, and whether similar interest will be shown in both Animal Crossing and Fire Emblem apps and Nintendo NX.
“Pokémon GO is a genuine phenomenon − just after little over a week, it has added $19 billion to the value of Nintendo,” Deutsche Bank analyst Han Joon Kim writes. “The market is now valuing Nintendo at $27 billion in market capitalisation (ex-cash and treasury shares at book value), on a par with global leaders such as Electronic Arts Inc. and Activision Blizzard Inc. that respectively have 5 percent global video game market share versus Nintendo’s current 2 percent.”
He continued, “We need to see further hard evidence to model in significant further upside. We think the stock price now prices in a large portion of the market share recovery story, which we believe is readily achievable from leveraging its intellectual property to some degree.
“Combined with mobile game launches and market share recovery in console via NX, we are willing to model in a market share recovery by FY3/2019 to ~5 percent, but not towards the 10 percent level that Nintendo enjoyed in 2009 when Wii revolutionised the game industry.”