By 2016, Nintendo was in need of a success. In the last fiscal year its profits were down by 61%. Its latest console, the Wii U, had sold only 12.8 million units since its launch in 2012, roughly a quarter of Sony's PS4, despite its release being a full year later.
This was a problem for Nintendo as the majority of it’s console business profits come from sales to their customer base, limiting Nintendo’s potential audience.
Going mobile makes sense for Nintendo then as the global smartphone penetration currently stands at about two billion. Unlike consoles that are resigned to the living room or an additional device to carry around, people are wedded to their smartphones, creating far more opportunities for interaction.
However, Nintendo’s first foray into mobile with Miitomo, wasn’t met with a positive reaction. On the day it was announced, Nintendo’s share price dropped 9% in one day.
The problem was that Miitomo was an avatar-based social network that only catered to the Japanese market. Many thought that Nintendo’s efforts had been dampened by the threat of its console business being cannibalised by mobile gaming.
In contrast, the reaction to Nintendo’s latest mobile release, Pokémon Go, has been an almighty success. Since launching in the US, NZ and AU on July 6th, Nintendo’s share price has spiked by 65% and the game has become the fastest mobile game to top the iOS and Android charts.
A week after the initial limited release, downloads have been estimated at 7.5 million in the US alone, daily revenue has been suggested to be around $1.6m and some reports say that 5% of all Android smartphones worldwide have the app installed.
To put that in context, if these figures are true, Pokémon Go has achieved almost as many users as Uber… in a week.
Since launching Pokémon Go in the US, NZ and AU on July 6th, Nintendo’s share price has spiked by 65% and the game has become the fastest mobile game to top the iOS and Android charts.
So how has it become so successful, so quickly? It probably comes down to a few factors. Pokémon is one of the biggest names in gaming and this launch was highly anticipated by both old and new gamers alike.
Its initial release in only three regions has certainly played a role as it’s made people across the world only want it more: there are already hundreds of website pages up that show you how to sideload the app onto your phone if you live in the UK.
The game itself is brilliant. It’s the natural crescendo for the franchise, giving gamers the closest experience to the original vision: running around catching them all and battling against your friends and foes. It’s the original game re-imagined and enhanced for the smartphone era.
Pokémon Go’s use of Augmented Reality to insert Pokémon characters in the real world is, in my opinion, the best use of the technology to date. Augmented Reality apps have, for the most part, been gimmicky or disappointing. With Pokémon Go, AR is necessary to bring the Pokémon world to life. To do it in this way is something that Nintendo could only have achieved on mobile.
So, will it last? It’s hard to see what could derail this train right now, but it’s still far too early to call it.
One potential barrier could come from the fact that the most successful mobile games so far have all allowed bite sized gameplay, where players can snack on the game whenever it is most suitable for them eg playing a quick level of Candy Crush in between stops on the tube.
Keeping gameplay short and sweet has been one of the pillars that has made mobile gaming so sticky. Pokémon Go however, seems to require a little more commitment if you want to progress.
Although in the excitement of trying the game out the initial numbers look incredible, it will be interesting to see how many players stay engaged and make enough time for the game as time goes on.
One thing is for sure, this opening week will change Nintendo forever. Any shred of doubt that mobile is the future home of Nintendo’s beloved games and characters will have been eliminated.
Even if it hasn’t cracked the long term game yet, Nintendo has proven to itself that massive success is possible on this platform and that there is a huge consumer appetite for its products on mobile.
Nintendo only needs to look at its old 90’s rival, Sega, to see how successful mobile strategy can be. For the last few years Sega has been re-releasing some of its classic games, like Sonic the Hedgehog, whilst simultaneously creating new, re-imagined versions specifically for mobile, as well as completely new mobile titles.
Sega has seen success across the board here, releasing about 20 titles per year on mobile, with up to five titles per year bringing in over £3.5m per month each. In 2015 alone Sega had 228 million downloads.
Sega is not alone here, Rockstar has re-released many of its old Grand theft Auto games on mobile and Square has re-released one of its Final Fantasy series as well.
Old games finding success again on mobile is a great way for these companies to extend the life, and revenue, from titles that otherwise would have died a death with the consoles that they were originally built for.
Over the next few years I hope to see lots of Nintendo’s original games portfolio re-released on mobile, something that until now was firmly ruled out by its leadership.
This has always struck as a strange decision given the huge demand from consumers. Gamers had already created Nintendo emulators and were playing old Nintendo console games on iPhone before Apple even released the first version of their AppStore.
It seems crazy that Nintendo would not want to offer people what they clearly want, and regenerate cash from its existing portfolio in the process.
Adam Vine is business director at Mobile5, Omnicom Media Group UK’s mobile and digital specialists