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Nintendo's Pokemon Go Makes a Late Entry in South Korea

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After a six month delay, Nintendo Co Ltd (NTDOY - Free Report) has now officially launched its blockbuster hit game, Pokémon Go in South Korea, on both Alphabet’s (GOOGL - Free Report) Play Store and Apple Inc.’s (AAPL - Free Report) iOS store.

Per media reports, Nintendo’s Pokémon Go works with Google Maps, which has “limited access” in South Korea. Niantic had earlier sought permission from the South Korean government for access to Korean maps, which was flatly refused. Google had not agreed to South Korean government’s demand to “blur” sensitive locations like government buildings on Maps.

Reportedly, the denial stems from the fact that South Korea remains concerned about its national security. It doesn’t share warm ties with its neighbor, North Korea. The simmering border tension between the two nations has led the South Korean government to disallow storage of detailed maps of the country to be stored on any other servers except those in South Korea, add media reports.

It remains unknown how Niantic, the firm which developed Pokémon Go, bypassed the Maps issue, add further media reports. Niantic chose to remain silent on this issue during the press conference it held in Seoul on Jan 23, 2017.

Dennis Hwang, Niantic’s design director was quoted saying “Niantic is a young startup run by a small team. We had not expected that ‘Pokemon Go’ would receive such explosive popularity worldwide, and needed time to ‘take a breath. For a team of our size, it took a lot of time for us to prepare and localize the game for the Korean market, including translating the game’s contents into Korean and such.”

Developed by Niantic in association with The Pokémon Go company, a subsidiary of Nintendo, Pokémon Go has been a monster hit. Though the success of the game didn’t directly benefit Nintendo’s financials, we believe that it has strengthened the Japanese video game publisher’s position in the lucrative mobile games space. It was created by Niantic in association with Nintendo. Consequently, most of the benefit was netted by Niantic.

Over the past one year, the success of Pokémon Go has cushioned its share price, which is up 56.63% compared with the Zacks Toys/Games/ Hobby/Products industry’s gain of 14.86%. However, the last few months haven’t been pretty good for Nintendo. The launch details of its anticipated console, Switch caused share price to plummet. Even the revival of NES classic, despite a warm reception, suffered a massive inventory problem. Reportedly, Nintendo hasn’t been able to supply NES units, which makes it a very hard find, thereby affecting its sales prospects.

Over the last three months, Nintendo’s shares price has fallen 12.20% compared with the broader industry’s decline of 6.82%.

At present, Nintendo carries a Zacks Rank #5 (Strong Sell).

A better-ranked stock in the wider technology space is Veeva Systems Inc. (VEEV - Free Report) which sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, Veeva has generated a positive average earnings surprise of 47.77%.

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