Nintendo becomes a smartphone player

With stocks falling for months as sales of its video game consoles grew tepid, it became clear to Nintendo that it could no longer ignore the booming smartphone gaming market. Last week, it released the game "Pokémon Go" onto Android and Apple app markets in the US, Australia and New Zealand.

Players scour around town using their phone's camera to track down the cartoon creatures called Pokémon - long confined to the realm of video games and television shows - which pop up on screen as if on the street or in the park. As Pokémon "trainers", users try to catch them and ready them for battle.

Experts believe that, in the first day alone, one in 20 US owners of Android cell phones downloaded the free app, which also soared to the top of Apple's iTunes list of most-popular app downloads. It's estimated that Pokémon Go has already been downloaded more than the dating app Tinder, which had grown mega-popular for offering a chance at a much different kind of catch.

This was all more than convincing to once again spark investor interest in Nintendo's future. The company was the standout amid a big Monday for Tokyo stocks, with its shares jumping 20 percent, after a nine percent increase last Friday. In just these two days, Nintendo's worth spiked by $7.5 billion (6.8 billion euros).

Play then pay

The app's two producers, Nintendo's Pokémon Company and former Google subsidiary Niantic Labs, have even had to delay the worldwide rollout because demand was outpacing server capacity. But when it comes to smartphone apps - and Nintendo is well aware of this - the number of downloads isn't the ultimate measure of success.

Nintendo has long held back from entering the smartphone app market even as it took off over the last few years. People latched onto cheap and addictive games that didn't require extra hardware or more than a few minutes of free time wherever to enjoy.

The company instead continued to develop games with its beloved cast of characters - Mario and Donkey Kong, to name the originals - for its own consoles. Pokémon has been a particularly big winner for the company over the past couple of decades - Nintendo can count on a large and loyal fan-follwing to shell out the $40 for its new games.

The business model for smartphone gaming is less certain terrain. Most popular smartphone games are free, hoping to get users hooked on playing before luring them into making "in-app purchases," for instance to open up more features.

This is the case with Pokémon Go. User's don't have to pay to download the game itself, but they eventually have to shell out for the app's in-game currency, necessary to buy the "pokéballs" that capture the Pokémon.

It's now an open question as to whether this will pay off in the long run, especially after the initial excitement over the game wears down. But Nintendo can't afford to wait until then, and is moving forward with more offerings on the horizon.

jtm/mrk (dpa, Reuters)