It’s been less than three months since the new Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) mobile game Pokemon GO took the world by storm. However, the game’s reign as the top-grossing iPhone app is over. The latest data from the App Store shows that Pokemon GO is no longer the No. 1 app.
Now that the Pokemon GO dust is finally starting to settle, investors can start to piece together how big of an impact the game will ultimately have for NTDOY stock investors.
NTDOY’s Pokemon GO Numbers
One of the problems with the surprise success of Pokemon GO is that it was hard to decipher exactly how big the game was going to be and what exactly that meant for NTDOY stock.
The chart below from SensorTower shows how Pokemon GO’s 73 days at the top of Apple Inc.‘s (NASDAQ:AAPL) U.S. App Store’s Top Grossing list compare to other top apps.
Despite the fact that Pokemon GO brought in more than $400 million in gross revenue in its first two months, its stint at the top of the App Stores list is not the longest. Pokemon GO’s 73-day streak comes in third behind Candy Crush Saga’s 109-day run and Clash of Clans’ impressive 347-day run.
Value Added To NTDY Stock
It’s fun to see how Pokemon GO stacks up to other popular apps. Translating those comparisons into dollars is difficult, though. Let’s start with the fact that Pokemon GO has been a huge hit around the world, particularly in Japan. Pokemon GO may have fallen off the top of the AAPL chart in the U.S., but it remains the top-grossing App Store app in Australia, Great Britain, Belgium and a handful of other countries. In addition, while AAPL has a huge share of the U.S. smartphone market, it only holds about 11.8% of the global market.
In other words, AAPL’s U.S. app data is only a very small piece of the Pokemon GO puzzle.
To complicate things further, Nintendo only gets a fraction of the Pokemon GO profits. Macquarie estimates that percentage at roughly 20%, less than AAPL’s 30% share.
NTDOY Stock Bull & Bear Cases
The best NTDOY stock bull argument that I’ve seen is that Pokemon GO’s success was less about dollars and cents and more about brand popularity.
Nintendo recently continued its Pokemon GO momentum by announcing that it is bringing several new games, including Super Mario Run, exclusively to AAPL’s mobile platforms. In addition, expect a tsunami of Pokemon and Mario toys and merchandise this holiday season. Some analysts are also expecting news about NTDOY’s new NX console by the end of the year.
NTDOY stock bears argue that all of those potential positive catalysts are already priced into NTDOY’s share price. Nintendo management said back in July that Pokemon GO would have a limited impact on the company’s earnings. Regardless, NTDOY stock is up a staggering 88% in the past three months. In terms of market cap, NTDOY stock has added an incredible $14.6 billion in that time.
Personally, that seems like a lot of value to assign to one game that will not have a major impact on earnings, and a handful of games, products and devices that haven’t even launched, yet.
I believe NTDOY stock has gotten a bit ahead of itself amidst Pokemon GO and Super Mario Run enthusiasm. Nintendo may very well carry its momentum into a strong holiday performance. I just don’t see much near-term upside left for NTDOY stock.
As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.
