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Will Nintendo's Super Mario Run Boost its Position in Mobile?
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Nintendo Co. Ltd. (NTDOY - Free Report) is aggressively pushing into the mobile game space after remaining aloof so far. Nintendo’s much anticipated mobile game, Super Mario Run (SMR) for Apple’s (AAPL - Free Report) iOS platform releases today for $9.99 across 151 countries. The company, reportedly, expects to release an Android version in 2017.
The game is free to play for a few levels, following which gamers will have to shell out $10 to download the whole game.
Analysts differ in their opinions. Some analysts consider this a hefty price tag especially in “developing countries”. Also, the game requires an Internet connection. Bloomberg has quoted an analyst saying “nostalgic Nintendo players will almost certainly spend. But what matters is if the marginal customer says this is good, yeah, I’ll spend the money.” The analyst expects 200 million downloads by March. But only 10% are expected to cough up the money for playing the full game. Also, the apparent lack of any new features might “limit” users’ “willingness to pay for the full version”, adds the analyst.
On the other hand, media reports quote another analyst who is bullish on the stock and expects nearly 40% jump in price. Per the analyst, SMR is Nintendo’s creation and so it stands to benefit from the revenues entirely. This however was not the case for Pokémon Go. Pokémon Go was a super hit but had limited impact on Nintendo’s financials as it was created by Niantic in association with Nintendo. Consequently, most of the benefit was netted by Niantic. He expects 500 million downloads of the game by March.
The year so far has been good for Nintendo, which is basking in the success of Pokémon Go. Its shares have generated a return of 75.89% compared with the Zacks Toys/Games/ Hobby/Products industry’s gain of 9.69%.
We note that though the success of Pokémon Go didn’t directly benefit Nintendo’s financials, it did strengthen Nintendo’s position in the lucrative mobile games space. This should help it to sustain the momentum going ahead.
Nintendo has so far stayed away from mobile games. It finally warmed to the idea of mobile games last year and struck a deal with DeNA to bring five mobile games by Mar 2017. Mittomo, released earlier this year, was the first game stemming from the collaboration. Super Mario was announced by Shigeru Miyamoto, Representative Director of Nintendo and creator of the iconic character, Mario the Plumber at Apple’s keynote address on Sep 7, 2016.
Analysts observe that Nintendo was trying to protect its console business by not letting its well known characters like Mario and Zelda appear on mobile platforms. However, mobile games started emerging as a lucrative business option as titles like Candy Crush and Angry Birds caught the imagination of the world. As per an Apr 2016 report, research from Newzoo estimates the global games market to grow 6.6% to $118.6 billion in 2019, of which $52.5 billion will come from mobile games.
Apart from games, Nintendo’s revival of its classic NES console is also a big factor. Though the supply shortage has been a deterrent, Mini NES classic has found many takers. Given expectations of an improving supply trend in the coming days, mini NES is expected to “reign the holiday sales” as per media reports.
Moreover, the company is hoping to turn its fortunes around with its next video game device, Switch, slated for launch in early 2017. Nintendo’s gaming consoles 3DS and Wii U have been underperforming for quite some time and are losing ground to Sony’s PS4 and Microsoft’s (MSFT - Free Report) Xbox one. In fact, Wii U has been the company’s lowest selling gaming console.
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Will Nintendo's Super Mario Run Boost its Position in Mobile?
Nintendo Co. Ltd. (NTDOY - Free Report) is aggressively pushing into the mobile game space after remaining aloof so far. Nintendo’s much anticipated mobile game, Super Mario Run (SMR) for Apple’s (AAPL - Free Report) iOS platform releases today for $9.99 across 151 countries. The company, reportedly, expects to release an Android version in 2017.
The game is free to play for a few levels, following which gamers will have to shell out $10 to download the whole game.
Analysts differ in their opinions. Some analysts consider this a hefty price tag especially in “developing countries”. Also, the game requires an Internet connection. Bloomberg has quoted an analyst saying “nostalgic Nintendo players will almost certainly spend. But what matters is if the marginal customer says this is good, yeah, I’ll spend the money.” The analyst expects 200 million downloads by March. But only 10% are expected to cough up the money for playing the full game. Also, the apparent lack of any new features might “limit” users’ “willingness to pay for the full version”, adds the analyst.
On the other hand, media reports quote another analyst who is bullish on the stock and expects nearly 40% jump in price. Per the analyst, SMR is Nintendo’s creation and so it stands to benefit from the revenues entirely. This however was not the case for Pokémon Go. Pokémon Go was a super hit but had limited impact on Nintendo’s financials as it was created by Niantic in association with Nintendo. Consequently, most of the benefit was netted by Niantic. He expects 500 million downloads of the game by March.
The year so far has been good for Nintendo, which is basking in the success of Pokémon Go. Its shares have generated a return of 75.89% compared with the Zacks Toys/Games/ Hobby/Products industry’s gain of 9.69%.
We note that though the success of Pokémon Go didn’t directly benefit Nintendo’s financials, it did strengthen Nintendo’s position in the lucrative mobile games space. This should help it to sustain the momentum going ahead.
Nintendo has so far stayed away from mobile games. It finally warmed to the idea of mobile games last year and struck a deal with DeNA to bring five mobile games by Mar 2017. Mittomo, released earlier this year, was the first game stemming from the collaboration. Super Mario was announced by Shigeru Miyamoto, Representative Director of Nintendo and creator of the iconic character, Mario the Plumber at Apple’s keynote address on Sep 7, 2016.
Analysts observe that Nintendo was trying to protect its console business by not letting its well known characters like Mario and Zelda appear on mobile platforms. However, mobile games started emerging as a lucrative business option as titles like Candy Crush and Angry Birds caught the imagination of the world. As per an Apr 2016 report, research from Newzoo estimates the global games market to grow 6.6% to $118.6 billion in 2019, of which $52.5 billion will come from mobile games.
Apart from games, Nintendo’s revival of its classic NES console is also a big factor. Though the supply shortage has been a deterrent, Mini NES classic has found many takers. Given expectations of an improving supply trend in the coming days, mini NES is expected to “reign the holiday sales” as per media reports.
Moreover, the company is hoping to turn its fortunes around with its next video game device, Switch, slated for launch in early 2017. Nintendo’s gaming consoles 3DS and Wii U have been underperforming for quite some time and are losing ground to Sony’s PS4 and Microsoft’s (MSFT - Free Report) Xbox one. In fact, Wii U has been the company’s lowest selling gaming console.
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At present, Nintendo carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>