Pokémon Go pushes Nintendo back to black

31 Jan 2017

Pokémon Go. Image: Mr Aesthetics/Shutterstock

Nintendo’s stake in 2016’s runaway hit Pokémon Go has finally shown results on the company’s bottom line.

In a little under a week last summer, 5pc of all Android devices in the US had downloaded Pokémon Go, the first augmented reality game to truly catch its audience by storm.

Week by week the numbers rose, with users spending fortunes on a game that will look dated really soon.

Niantic, the game’s developers, profited immediately from Pokémon Go’s popularity. Nintendo, which is a shareholder in both Niantic and Pokémon Co, the other company behind the game, saw a slower benefit. It has been estimated that Nintendo enjoys a 13pc economic stake in the game, but its true money-spinner appears to be the interest in other Pokémon products and merchandise.

That’s because today (31 January), Nintendo has revealed an emphatic increase in quarterly profits, enjoying quite a boom after such a lengthy fallow period.

Losses were mounting in October when it released its previous figures, continuing a trend for a company unsure where it should go.

Now, with the Pokémon effect in full swing, it’s understandable if Nintendo pins some of its future on mobile. Indeed, it has already started to release mobile games this year.

Nintendo reported a €539m profit on revenues of €1.5bn, returning to the black after October’s €53m loss. Revenue was down 22pc on last year, but the company’s Pokémon Sun and Pokémon Moon titles for the 3DS earned it the big bucks.

The two games garnered more than 14m sales since their November launch, surely helped by the 2016 Pokémon love-in.

Though its yearly profits were down on 2015, this was expected as the Wii U’s poor performance continued.

Super Mario Maker sold more than 1m in the most recent quarter, with 3DS sales overseas increasing on the back of such interest.

Switch, the company’s newest console, is expected to hit the market in March, with many considering it Nintendo’s attempt to bridge the gap between its traditional consoles and the modern world of mobile-first.

It could also be the company’s final effort to truly compete with console giants Microsoft (Xbox One) and Sony (PS4).

Pokémon Go. Image: Mr Aesthetics/Shutterstock

Updated, 3.10pm, 31 January 2017: This article was amended to reflect Nintendo’s relationship with Niantic, Pokémon Co and Pokémon Go.

Gordon Hunt was a journalist with Silicon Republic