Perspectives from ISB

Nintendo is a Japanese multinational consumer electronics and software company that is today the world’s largest video game company by revenue. It was founded in 1889, by Fusajiro Yamauchi, and is still owned by the sixth generation of the Yamauchi family. Nintendo then developed into a video game company in the 1970s creating some of the most well known and best-selling video game franchises in the industry, such as Mario and The Legend of Zelda. In recent times, the company has faced challenges with the first non-family chief executive Satoru Iwata losing his battle with cancer at the age of 55 last year. This was accompanied by poor sales of its family-focused Wii U console, after a lacklustre advertising campaign, and an increasing drive towards free mobile games.

Now the company has seen success from unexpected quarters. Its second smart phone videogame Pokémon GO is a huge success. Analysts expect this 127-year-old family business, to dominate the smart phone videogame market in the near future. In these expectations the share prices of Nintendo, have surged 36% since the release of the Pokémon-themed smart phone game last week. It has added nearly $7.5 billion worth of market value to the Kyoto-based firm. Pokémon Go is a joint project by The Pokémon Company and Niantic, a spinoff of Google parent Alphabet. The Pokémon Company is 38% owned by Nintendo and has earned 4.6 trillion yen ($45.6 billion) since its inception in 1998.