Pokémon GO investment? Read this before you investing!

Pokemon Go investing

If you like many other investors and are considering investing in Nintendo.

Read this before you invest in Nintendo, because it can maybe get expensive for you.

I do not say whether you should invest in Nintendo or not.

Neither do I say whether Nintendo is a good or bad investment.

I just wrote something I think you should know before you decide.

Why did Nintendo double their market value?

Pokémon GO

Pokémon GO was launched.

The release was a overnight success like no other release.

Similarweb stated that Pokémon GO had already by day two more users than the known dating app Tinder on Android phones.

In the same amount of time, Pokémon Go was catching up to twitters daily active users.

To say people are excited about Nintendo’s prospect would be an big understatement. People are absolutely salivating.

Benefits remain unclear

Prospective investors might want to pump the brakes on all of their newfound love for the house that Mario built, because according to a brokerage firm, the benefits of Pokémon GO for Nintendo remain unclear.

According to CSLA analyst Jay Defibaugh, Nintendo receives royalties for Pokémon titles but surprisingly little direct profit, benefitting instead from the impact of Pokémon titles on hardware sales and penetration.

The Developer firm Niantic created the game Pokémon GO with the Pokémon Company.

As Deutsche Bank’s Han Joon Kim explains, Nintendo does own 32% of the Pokémon Company.

The Pokémon Company is also owned by Game Freak and Creatures.

Creatures is also partially owned by Nintendo. In other words, Nintendo will likely see some improvements to its bottom line, but it is unlikely that the affect will be as dramatic as it has been made out to be.

Pokémon is one of a kind

More importantly the fact is that Pokémon GO isn’t the first of a series of major mobile releases being pushed out by Nintendo. It is actually more of an anomaly than anything.

Nintendo does have two mobile game releases in the loop from the franchises “Animal Crossing” and “Fire Emblem”.

But they’re unlikely to have the same kind of major crossover as Pokémon GO. What’s more, there are no assurances that Pokémon GO won’t flame out in a short time.

Nintendo has been adamant about keeping its big franchises including Super Mario Bros., the Legend og Zelda and Mario Kart off of smartphones.

Instead Nintendo would rather focus on selling its top selling titles on it own handheld gaming consoles like the Nintendo 3DS or its Wii u home console.

What is the problem?

The problem with that is that sales of the Nintendo 3DS have already begun flagging and the Wii U has been a failure unable to match the sales from Sony’s PlayStation 4 or Microsoft’s Xbox One.

What’s more, Nintendo has yet to announce a successor to the Nintendo 3DS and hasn’t even provided a price or even a look at the design of it’s next generation NX console, which is expected to launch next year.

Sure, there are still two Pokémon games planned for release on the Nintendo 3DS this year, which is sure to drive sales of the handheld console, and the previews for “The Legend of Zelda: Breath of the Wild” for the NX console have been largely positive.

But whether those can sustain the company in the long term remains to be seen.

If Nintendo wants to keep the positive momentum it’s seen with “Pokémon Go” it needs to strongly reconsider whether it is willing to bring its big franchises to smartphones.

If not, the company’s future rests on whether the upcoming NX can win back supporters who were burned by the Wii U.

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