Pokemon GO Boosts Market Capitalization for Nintendo

Pokemon GO Boosts Market Capitalization for Nintendo

Japanese multinational consumer electronics and software company Nintendo Co.’s shares on Tuesday surged by 14%, which resulted in its market capitalization increasing by more than twofold to 4.5 trillion yen ($42.5 billion) within only seven sessions of the release of the mobile game Pokemon GO in the United States.

Pokemon GO has now been launched in a total of 35 countries, specifically most of the Europe and the latest ones in Canada, and its extraordinary accomplishment has prompted extensive purchase of the shares of the company. This unusual sensation has raised apprehensions among some seasoned market players as well.

"I've never seen the trend of such a big company's shares changing so quickly in such a short period of time," said a Senior Strategist at Okasan Securities, Takashi Oba. The company’s shares on Tuesday reached 31,770 yen, an increase of 14.4%. This raised the growth, ever since Pokemon GO has been released on July 6, to more than 100%.

Turnover in the shares of the company reached 703.6 billion yen, breaking its own record of trading turnover in individual shares that was of 476 billion yen on Friday. Trading in the shares of Nintendo Co. was equivalent to 25% of the total trading that took place on the main board of Tokyo Stock Exchange.

The phenomenal victory of the new game has raised optimism towards the potential of the company to benefit from its range of several famous characters like Zelda and Super Mario, and also that Nintendo will be able to fortify its new venture into augmented reality (AR).

A fund manager at a Japanese asset management firm, who did not disclose his identity, suggested that though virtual reality and AR are the sectors being concentrated on, Nintendo was not being anticipated to enter this segment, adding that the company has become a stock associated with AR out of blue.


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