ByJay Vergara, writer at
Movies, games, and cosplay. Let's freak out together. Follow me on, Twitter @robot406
Jay Vergara

When the Pokémon GO soft launch was started back in July 6, there was an understandable frenzy that followed. Long time fans were going crazy, the media went nuts about it, I actually went outside, it was all a big adventure.

The other thing that went crazy was Nintendo's finances in the form of its stock price reaching record highs. At one point it was trading at close to double what the stock was worth before Pokémon GO was released. Now, the stock price is tapering off and is actually beginning to drop. As of trading today, the price of the stock has gone down 18% which is the most its dropped since 1990. So what the heck happened? And what does it all mean?

It All Comes Down To Excitement

The economics of nostalgia is a fickle mistress. When the game was first released, everyone was about that Pokémon GO life. People were out in droves trying to be the very best like no one ever was and investors clamored to Nintendo thinking that good things were on the horizon.

People's excitement went up and so did the stock price and for a time it was good. Pokémon GO was sitting pretty on the top spot at the Apple App Store and rocking on the Google Play store as well. Eventually, however, things started to taper off.

On the user side, the daily active users have begun to drop. You can account for a good chunk of this as band-wagoners dropping off and getting bored. Once the roses tinted glass of nostalgia wore off, people started to realize that the app was pretty limited.

Going beyond server issues, there just wasn't as much to do. Niantic Labs themselves admitted that the game only features 10% of what they wanted to put into the game. So there are more things to come, but it's lost a bit of momentum.

On the business side, a lot of investors' hopes were dashed by an announcement made by Nintendo regarding the overall revenue that they were expecting from Pokémon GO. We'll skip the nitty gritty and boil it down to the fact that Nintendo stated that despite the massive spike of downloads that the app won't have a significant impact on business results. In simple terms, there isn't as much money to be made as people lead themselves to believe.

What Does This Mean To Me?

I don't have a crystal ball so I can't even begin to tell you what it means from an investment standpoint. If you bought during its peak, that's a rough one and I'm sorry.

If you were one of the people who bet against Nintendo thinking that it would drop, then nicely done. Here's the thing, these are all short term bursts of activity and it's hard to tell what will happen next just from a few weeks.

Nintendo still has their new system The NX coming out and a few other mobile games to announce. The good news for us regular people is that Nintendo is beginning to wrap its head around the mobile gaming market.

For us, it's safe to assume that as Nintendo ventures into the mobile gaming world, the next game will be more refined. A lot of lessons were learned from the release of Pokémon GO like how you should never underestimate the absolute fervor of '90s kids who grew up with your intellectual property suddenly given something they've wanted since they were children.

Ups and downs aside, Nintendo feels like it's headed towards the right direction. Plus, there's also the release of the NES Classic Mini to keep our nostalgic hearts beating. So at least we know they have the nostalgia market locked down.

[ Source: Quartz, Bloomberg ]


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