Does the Upcoming "Pokemon" Game for iPad Mean Nintendo Is Finally Embracing Mobile?

Pokemon Trading Card Game Online will come to iPad this year. Does this mean more Nintendo games will soon follow?

Aug 19, 2014 at 9:00AM

Tcgo

Source: PokémonTCG.com.

There has recently been a lot of pressure on Nintendo (NASDAQOTH:NTDOY) to bring its software to mobile platforms. The company's hardware business is facing serious decline, with combined sales of Wii U and 3DS all but guaranteed to come up at least 150 million units short of their predecessors' cumulative total.

In a year that President Satoru Iwata Nintendo stated would be characterized by a return to profitability, the company's first-quarter report delivered an operating loss of approximately $92.7 million. Shortly after these disappointing numbers, rumors of internal dissatisfaction with Iwata's refusal to explore the mobile market began to circulate.

Now, a version of the Pokemon trading card game has been announced for Apple's iPad, and Nintendo's share price has jumped because of it. Is the valuation bump warranted? Will Nintendo soon embrace mobile platforms as hosts for its software?

Gotta catch 'em all
Confirmation that the Pokemon Trading Card Game would come to iPads this year has prompted Nintendo's share price to rise approximately 4%, a notable gain on the heels of the substantial valuation decline that occurred after the release of the company's most recent quarterly report. That said, investor enthusiasm for the move is likely founded on faulty assumptions. While the upcoming iPad version of Pokemon Trading Card Game Online can technically be described as the first Nintendo game to release on a mobile platform, a version of the upcoming title has been available on PC and Mac for over three years, and the title is not developed by a first-party studio.

The move to bring the card game to iPads may also not be wholly attributable to Nintendo, as the Japanese hardware and software maker does not have majority ownership of the game's publisher, The Pokemon Company. Also worth noting, the iPad version of Pokemon Trading Card Game Online isn't the first mobile app tied to the long-running and incredibly lucrative franchise. 2012 saw The Pokemon Company publish Pokedex for iOS, an app that provides information and pictures of Pokemon characters, and also prompted the belief that Nintendo would soon take a more proactive approach to smartphone and tablet gaming. The Pokemon Company's foray into mobile was followed by PokeTouch, a Pokemon-themed typing instructor available on PC and iPad in Japan.

The significance of Pokemon on iPad is being overstated
The fact that "Pokemon" mobile efforts come courtesy of a company Nintendo only owns 32% of suggests the platform holder is continuing to take a tepid stance on releasing games outside of its hardware ecosystem. The beginning of 2014 saw the company confirm that it had no plans to release games on platforms other than its own, instead stating that it would create some type of marketing app. It's not entirely clear whether the iPad version of Pokemon represents a deviation from this stated strategy.

If Pokemon Trading Card Game Online for iPad is similar to what's currently available on Mac and PC, it won't feature in-app purchases, instead requiring users to enter codes from physical versions of the trading cards. Accordingly, it's hard to imagine that the upcoming game will generate significant revenue. At best, the impending release looks to be a testing of the waters, and it's easy to see why Nintendo has been hesitant to pursue a greater mobile presence.

Nintendo is still a hardware company
In the previous fiscal year, approximately 57% of Nintendo's revenue came from the sale of hardware. The basic rationale behind not bringing its properties to mobile platforms is that such a move would take away from the appeal of Nintendo's consoles and complicate the value of its software. The vast majority of mobile gaming revenue comes from in-app purchases in free-to-download software. Given the opportunity to enjoy less-expensive versions of Nintendo's signature gaming experiences, consumers might easily opt to forgo the company's hardware altogether and lose interest in its premium console content. Nintendo is already feeling the negative effects from the rise of smartphones and tablets as gaming platforms, and making its content available on iOS and Android would seemingly give consumers less reason to invest in Nintendo hardware.

Platforms like the App Store and Google Play also lack the degree of content oversight found on console platforms, allowing for wide ranges of knock-offs and derivative products. For example, the hugely popular Flappy Bird made illegal use of Nintendo-owned art assets. Alternatively, it's clear that there is a demand for Nintendo-like experiences on mobile platforms, as Pokemon-imitator Micromon climbed to the top of the paid-download charts on the App Store, but the game can be downloaded for just $1.29. Consider that the Pokemon X and Pokemon Y had combined sales of more than 12 million units as of April 7 at a price in the $40 range, as well as the driving impact that these games had on 3DS hardware sales, and offering ostensibly competing series entries on mobile platforms starts to look like a bad strategy.

Foolish final thoughts
Nintendo is already committed to the development of its next hardware platforms. As long as the company's business revolves around the sale of gaming consoles, it's difficult to imagine it will bring significant game support to mobile platforms. Meaningful mobile releases could create great short-term windfalls and spur investor excitement, but it would likely further destabilize the company's fundamentals.

Nintendo is clearly in need of change going forward, but its structure suggests it will continue to keep its games exclusive to its hardware platforms for at least the next several years. Support for mobile platforms will likely only arrive if the company's next gaming systems and health-based "Quality of Life" platform prove to be duds.  

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early, in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers