Wednesday, July 13, 2016

Pokemon GO: Potential Revenue for Nintendo

Nintendo shares are on fire after releasing the earth shattering, augmented reality "Pokemon GO" game this past week.



Thinking about this from a financial perspective, I will quickly summarize a potential revenue stream for Nintendo from the game.

Retailers and fast food chains can have Nintendo make their location an important stop where players can find rare items or Pokemon or whatever else is important to gather in the game. I'll save the specifics of what they need to have because I don't play the game myself, but I do understand there are certain locations that are important for players to visit. Stores can pay Nintendo to have their location be one of those locations for players. Thus, players will have to visit those stores to go further in the game. 

For example, this upcoming weekend, Wal-Mart may run a special that has their store give a higher chance of catching a rare Pokemon in the game. Nintendo has Wal-Mart pay them a small fee for the privilege of having the virtual Pokemon in their store for the weekend and Wal-Mart benefits by increasing foot traffic to the store and getting more potential customers inside the doors.

This could be any company, all over the world. It will be interesting to see how the game evolves over time. One thing is for sure, this will not be the last augmented reality game to hit smartphones.