Those who like to keep an eye on Nintendo's share value, as a barometer of the company's health and investor confidence, will have noted that it's not only at its highest point in a number of years but continues to climb. Plenty attribute this to strong early numbers and positive momentum / publicity for the Nintendo Switch, but some think that mobile is also still key to Nintendo's future.
Quoted over on barrons.com, Jefferies analyst Atul Goyal is a believer in Nintendo's prospects and predicts hefty growth, setting a 57,500 Yen share target price; at the time of publication it's actually 39,280 Yen. He cites a meeting with Nintendo management when outlining a potentially lucrative future in mobile.
Learning from its experiences of the last 6 months, Nintendo mobile game plan is changing / evolving (and will continue to evolve over next 2-3 years as it learns more): While most of the investors (we met on a recent roadshow) believed that Nintendo is slowing down / dialing down on mobile games), our meeting with Nintendo management convinced us that Nintendo is all the more committed to mobile-games.
Six months back it had launched its first mobile game - (SMR) Super Mario Run with a Premium price model. That simply failed due to pricing model. And then it launched Fire Emblem with Freemium price model. That game did really well in the first month, but users used up all the content in less than a month. This was its first inning (out of 9). It is now working on more mobile games and addressing issues that it identified earlier (like pricing model or the depth of the game at initial launch). For its next game, Nintendo is working to make sure that the content is extensive enough at the starting point. We believe Nintendo's mobile games will go from strength to strength.
He also suggests keeping an eye on efforts to revamp Pokémon GO, though the jury's out on how much of its audience Niantic can retain and / or win back.
With Pokémon Go, TPC (The Pokémon Company) and Niantic had a huge hit on their hands in July last year. But they also have taken time to evolve the game. It was relaunched last week. The latest update includes: 1) gym features significantly updated to add the all-new motivation system; 2) added new Gym Badge feature; 3) added Raid Battles, a new cooperative gameplay experience. It may not reach the viral proportions, but we recommend investors keep a close eye on the revenue rankings of this game to see how these companies are learning and evolving. It will be a huge mistake to write off Nintendo's IP. That is the real value. That is the treasure trove.
Do you believe that Nintendo will succeed in its mobile plans? The next confirmed app is for Animal Crossing, so it'll be interesting to see how it performs.