Pokemon Go, the new mobile game from Nintendo (NTDOY), has become an instant hit in the mobile gaming world. Over the weekend, the game’s app zoomed to the top of App stores. Pokemon Go has broken a new threshold in the mobile gaming market. It combines Google’s trove of real-world data with the wide popularity of the Nintendo franchise. 

Boon for Nintendo's Shares

Pokemon Go’s popularity has already translated into a 20 percent increase in Nintendo’s stock price. Pokemon Go may have a bigger impact on mobile games. Even as the market for mobile games has exploded , it has also become more difficult to profit. For example, Zynga Inc. (ZNGA) had a runaway hit in Farmville on Facebook Inc.’s (FB) platform, but the company has struggled to make money on mobile. Even publishers of hit mobile games such as King Digital Entertainment Plc. (KING) have not had much luck replicating their successes on the mobile platform. 

Pokemon GO could be the exception because it combines two powerful themes in modern day gaming: an addictive and popular franchise with big data. In turn, this could help Nintendo develop custom products and game plans for its players.

Google Partnership

According to reports, Nintendo has developed the game in conjunction with Niantic Lab, a gaming and entertainment company that earlier was part of Alphabet Inc.'s Google (GOOG). When it was part of the Mountain View-based behemoth, Niantic had developed Ingress - a game similar in scope to Pokemon Go in that the flow melded virtual and real worlds. The idea was to gather game player data to develop custom flows to make it addictive and increase engagement. Since the game is free, greater player engagement will result in more advertising and franchise revenue for Nintendo.  

A key part of the Pokemon Go equation is that it has ballooned into an extremely valuable franchise for Nintendo, one with continued growth potential: the popularity of its characters spans multiple platforms from trading card games to home videos to movies. The mobile iteration seems to be a custom fit for its target demographic. 

According to reports, the app was already installed on more phones than Match Group's (MTCH) dating app Tinder within two days of release and had a higher user engagement time as compared to a host of messenger and social networking services.

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