Can Pokémon and NFC Save a Struggling Nintendo?

New Pokémon video game uses toys with NFC capabilities

   

Nintendo (NTDOY) is hoping that toys will help boost its struggling Wii U console.

Pokémon Rumble U releases later this month — on the tails of this weekend’s Pokémon World Championships – and offers an interesting new twist on the Pokémon franchise: near-field communication (NFC) toys that connect to and appear in the game. The game follows in the tradition of Activision’s (ATVI) already-released Skylanders video game and Disney’s (DIS) upcoming Infinity, which both use physical toys with NFC functionality.

While Rumble U won’t count as a new generation of Pokémon — it features different gameplay and won’t introduce new Pokémon — it’s a new direction for Nintendo.

Despite sluggish sales for the Wii U console, Nintendo is having a solid year. The stock is up 26% YTD (compared to 19% for the S&P 500), and has gained 34% since June. But investors are looking for something to give them more confidence about the Wii U as the PS4 and Xbox One approach their launch dates.

The Pokémon franchise is ideally suited for the toy-and-game treatment. The games are extremely popular, average 20 million or more copies sold for each generation, through five generations of Pokémon. And the sixth generation — which will follow the Pokémon tradition of two games released concurrently, Pokémon X and Pokémon Y — is scheduled for release in October on the Nintendo 3DS. No plans have been announced to include NFC capabilities to those games.

The series is a marketer’s dream, with 649 (and counting) unique Pokémon that can be sold as toys or plush animals or whatever else Nintendo can dream up. That number will likely jump above 700 with the release of Pokémon X and Y. To young fans, the series’ tagline, “Gotta catch ‘em all!” might be a call to action, but parents recognize it as a terribly effective marketing ploy.

Gamestop (GME) is jumping in on the action, too, as an exclusive retailer for 18 NFC figures. It’s an interesting and smart move for the retailer to support a direct-download game that will never end up in its stores. The store is hoping that kids remember where they got their Pokémon toys and will return to Gamestop for the release of the new games.

Even if it’s a runaway success, selling 20 million copies like a regular installment, Pokémon Rumble U won’t make NTDOY stock jump. But if the game does take off, it could be a powerful argument in favor of the NFC gaming trend.

In that case, don’t be surprised if NFC toys play a part in the next Mario and Zelda games.

Adam Benjamin is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/can-pokemon-and-nfc-save-a-struggling-nintendo/.

©2014 InvestorPlace Media, LLC

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