With ‘Pokémon Go’ overnight success analysts began to predict future transformations for Nintendo and its’ global growth and success. However, it’s not that simple at all.

 

The release of ‘Pokémon Go’, free augmented reality game, triggered a strong reaction of people all over the world. The game quickly became one of the most popular apps, surpassing the previous record held by ‘Candy Crush Saga’ in the United States. Moreover, Nintendo’s stock prices have already risen in anticipation. Analysts believe that it’s just a beginning for Nintendo’s future success. Now Nintendo can bring other franchises like Mario and Zelda to iPhones and Android devices and just count profits.

Nevertheless, upon closer inspection, this supposition doesn’t bear out. Nintendo still deal with major challenges in mobile gaming, and ‘Pokémon Go’ barely begins to resolve them. In this brutal business area, the weight of expectation from ‘Pokémon Go’ may do more harm than good.

Here the list of challenges that Nintendo has to deal with:

 

  • Nintendo is still not experienced enough in mobile apps industry

Nintendo didn’t make ‘Pokémon Go’. It’s a fact that many analysts have glossed over. The primary developer of the app is Niantic Labs, a former Google company and game’s publisher. The game is mostly based on Niantic’s previous creation, Ingress.

Nintendo is a one-third stakeholder in Pokémon Company, and it’s also an investor in Niantic Labs. It’s fair to note that on some level, Nintendo helped bring ‘Pokémon Go’ to life. However, it’s not like Nintendo’s previous console experience, where it was the main developer and sole publisher of its own franchises.

Nintendo isn’t ready to work alone in mobile games industry. It enlisted DeNA, Japanese mobile gaming firm, as a long-term partner to develop and operate games based on Nintendo franchises.

What is more, Nintendo has something more to figure out:

  1. How to bring its unique design talents to the new audience.
  2. How to sell substantial gaming experiences through free-to-play business models.
  3. How to operate online games at a larger scale than anything it has offered before.

Nintendo’s vague involvement in ‘Pokémon Go’ isn’t a magic shortcut.

 

  • Mobile hits are a fickle business

Mobile games industry has an extremely hostile environment. It’s hard enough to make a smash-hit mobile game, but making an unfluctuating business from it is even harder.

For example, Rovio built an entire business around ‘Angry Birds’, continually betting on its hit franchise instead of putting effort behind new ones. When ‘Angry Birds’ lost its popularity, the company has struggled a lot, with falling revenues and mass layoffs. A long-awaited initial public offering never came.

OMGPop reached 50 million users with ‘Draw Something’ and never achieved the same heights after that with other games. Zynga bought the company for $180 million in 2012, and shut down the studio in 2013.

Even high-profile successes are not protected from problems. King Digital Entertainment modified the ‘Candy Crush Saga’ franchise to strong annual revenues and an initial public offering. However, by the time, Activision agreed to acquire the company. It provided the decrease of revenues and numbers of active users. ‘Candy Crush’ is still made up 40% of gross bookings.

 

  • Most Nintendo Franchises Can’t Touch Pokémon

Nintendo is a huge company and people are sure that is has so many popular franchises already. However, Nintendo’s franchise sales figures tells that compared to Pokémon and Mario, nothing else comes close.

According to Fast Company’s study, over the years, Pokémon has made 210 million unit sales, or 279 million including spinoffs. Only Mario has done better, with 310 million lifetime game sales, or 529 million including spinoffs. In third place is Zelda, which has far fewer sales of 76 million over its lifetime. Other games has significantly fewer numbers of sales.

 

Pokemon Go. Nintendo Franchise Sales

 

What’s more, Pokémon represents the first and third best-selling games on Nintendo 3DS. Mario games occupy second, fourth, and fifth places. Only Animal Crossing and Super Smash Bros. games are near the same ballpark.

 

Pokemon Go. Nintendo 3DS Game Sales

 

Nintendo can achieve modest success in mobile with its stable of franchises. But after ‘Pokémon Go’ analysts are waiting for something more than just modest success. Nintendo now face the pressure to produce other hits, which is another challenge for the company to deal with.

With ‘Pokémon Go’ success, analysts’ position seems logical. Deeper analysis of Nintendo’s franchises and overall company’s strategy helps to see the situation clearly. ‘Pokémon Go’ is now best-selling game which brings a lot of joy for users and an eminency for Nintendo.

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