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| Version 2 | Version 3 |
|---|---|
| Nintendo rally sees its market value soar past Sony | Nintendo rally sees its market value soar past Sony |
| (about 11 hours later) | |
| Think of a Japanese tech giant, a truly global player made in Japan - there's a good chance Sony will come to mind. Well, think again. Or rather - think Nintendo instead. | Think of a Japanese tech giant, a truly global player made in Japan - there's a good chance Sony will come to mind. Well, think again. Or rather - think Nintendo instead. |
| After the unprecedented rally in Nintendo's share price since the release of Pokemon Go, the gaming company has soared past Sony in terms of market value. | After the unprecedented rally in Nintendo's share price since the release of Pokemon Go, the gaming company has soared past Sony in terms of market value. |
| It's a juicy headline - but what does it actually mean? Is Nintendo now bigger than Sony? And does it even make sense to compare the two? | It's a juicy headline - but what does it actually mean? Is Nintendo now bigger than Sony? And does it even make sense to compare the two? |
| On Tuesday, Nintendo shares finished trading another 14% higher, meaning they have doubled in value since the launch of Pokemon Go on 6 July. | On Tuesday, Nintendo shares finished trading another 14% higher, meaning they have doubled in value since the launch of Pokemon Go on 6 July. |
| This puts Nintendo's overall market value at 4.36tn yen ($38bn; £28.8bn), topping Sony by 300bn yen. | This puts Nintendo's overall market value at 4.36tn yen ($38bn; £28.8bn), topping Sony by 300bn yen. |
| And all this before Pokemon Go's even hit the streets in Nintendo's home market. | |
| So, is the company's increased valuation justified? | So, is the company's increased valuation justified? |
| "The very easy answer is yes," says Gerhard Fasol of Eurotechnology in Tokyo. "If the market thinks that's what a company is worth, then yes, it is justified." | "The very easy answer is yes," says Gerhard Fasol of Eurotechnology in Tokyo. "If the market thinks that's what a company is worth, then yes, it is justified." |
| After all, it is market value we're talking about. | After all, it is market value we're talking about. |
| 'Huge potential' | 'Huge potential' |
| But you have to go one step further, Fasol cautions, and ask whether these companies are actually comparable. | But you have to go one step further, Fasol cautions, and ask whether these companies are actually comparable. |
| "Pokemon still has huge potential - just think of the intellectual property rights to the characters for instance," he explains. "A massive potential waiting to be harvested." | "Pokemon still has huge potential - just think of the intellectual property rights to the characters for instance," he explains. "A massive potential waiting to be harvested." |
| It is a key characteristic of the gaming industry that the success and performance of a game is extremely hard to predict and foresee. | It is a key characteristic of the gaming industry that the success and performance of a game is extremely hard to predict and foresee. |
| And any surge of the kind that Nintendo has seen warrants caution, analysts warn. | And any surge of the kind that Nintendo has seen warrants caution, analysts warn. |
| "We're in bubble territory now - the stock's vertiginous rally may not last," says Neil Wilson of ETX Capital. "It's broken so far clear of any support levels that a fall could be nasty for those who bought into the rally." | "We're in bubble territory now - the stock's vertiginous rally may not last," says Neil Wilson of ETX Capital. "It's broken so far clear of any support levels that a fall could be nasty for those who bought into the rally." |
| The phenomenal success of Pokemon Go has surprised even seasoned market players. Nintendo certainly was hoping for a hit, but even it must have been somewhat caught off guard by the frenzy its little virtual creatures have created around the globe. | The phenomenal success of Pokemon Go has surprised even seasoned market players. Nintendo certainly was hoping for a hit, but even it must have been somewhat caught off guard by the frenzy its little virtual creatures have created around the globe. |
| It's a surprise success but one that if sustained can have a transforming impact on the fortunes of the company. | It's a surprise success but one that if sustained can have a transforming impact on the fortunes of the company. |
| What's a Walkman? | What's a Walkman? |
| What does a firm like Sony have that could compete in terms of market impact? It's known mostly as a hardware company and a very successful and solid one. | What does a firm like Sony have that could compete in terms of market impact? It's known mostly as a hardware company and a very successful and solid one. |
| "The last time that Sony had a hit that could maybe be compared to Pokemon was probably the Walkman," Fasol points out. | "The last time that Sony had a hit that could maybe be compared to Pokemon was probably the Walkman," Fasol points out. |
| The Walkman may seem like just yesterday to some, but to most Pokemon players you'd probably have to explain that it was a portable cassette player in the 1980s. And then you'd have to explain to them what a cassette was. | The Walkman may seem like just yesterday to some, but to most Pokemon players you'd probably have to explain that it was a portable cassette player in the 1980s. And then you'd have to explain to them what a cassette was. |
| So Nintendo certainly has an edge with its current success. | So Nintendo certainly has an edge with its current success. |
| A spike or a trend? | A spike or a trend? |
| The success of Pokemon Go is shared in part with the developers - Google spin-off Niantic - and we can expect to see similar games from other companies soon. | The success of Pokemon Go is shared in part with the developers - Google spin-off Niantic - and we can expect to see similar games from other companies soon. |
| Yet Nintendo has a head start. "The soaring stock price reflects the sentiment that Nintendo has hit upon a success case in mobile and augmented reality," David Corbin of industry website Tech in Asia told the BBC from Tokyo. | Yet Nintendo has a head start. "The soaring stock price reflects the sentiment that Nintendo has hit upon a success case in mobile and augmented reality," David Corbin of industry website Tech in Asia told the BBC from Tokyo. |
| "And it can be applied to other characters from its IP library - like Super Mario Brothers or Legend of Zelda." | "And it can be applied to other characters from its IP library - like Super Mario Brothers or Legend of Zelda." |
| Between 2006 and 2012, Nintendo profits soared on the back of its console success. During those years, the company's profits easily topped that of the established technology giants. | Between 2006 and 2012, Nintendo profits soared on the back of its console success. During those years, the company's profits easily topped that of the established technology giants. |
| While that peak lasted a few years, it didn't last forever and more recently there was in fact concern that Nintendo was moving into mobile gaming way too late to still have an impact. | While that peak lasted a few years, it didn't last forever and more recently there was in fact concern that Nintendo was moving into mobile gaming way too late to still have an impact. |
| Pokemon Go may have silenced those concerns but whether Nintendo can ride that wave in the long term is - like much of the fortune in the gaming industry - unpredictable. | Pokemon Go may have silenced those concerns but whether Nintendo can ride that wave in the long term is - like much of the fortune in the gaming industry - unpredictable. |