Oh, the irony: Nintendo earning much less from Pokemon Go than Apple or Google

Oh, the irony: Nintendo earning much less from Pokemon Go than Apple or Google
After the release of Pokemon Go last week, Nintendo's shares tacked on about $7 billion in market cap, but it could actually be Apple's App Store and Google Play that will be making more money from the viral hit than Nintendo itself. You see, the nostalgia-driven watershed moment for augmented reality called Pokemon Go is not a sole proprietorship of Nintendo.

Actually, Nintendo just entered into a $30 million partnership with Niantic and the Pokemon Company to create the game. Niantic used to be owned by Google, and its crown jewel in augmented reality so far has been the excellent, but niche Ingress title, which took the fusion of game and real life to the next level by utilizing the power of Google Maps. Niantic was spun off when Google did its restructuring that turned it into Alphabet, and continued the collaboration with Nintendo, while the Pokemon Company is just a venture created to manage the licensing of the Pokemon characters, of which Nintendo owns a third.

Apple and Google, on the other hand, collect a third of the sales that happen on their application stores, so each time you buy PokeBalls and other Go paraphernalia to level up, they earn a chunk of change, too. In fact, analysts estimate that out of $100 spent on Pokemon Go in-app purchases, the Silicon Valley giants take their respective 30%, then 30% go to the game developer Niantic, another 30% will go to the Pokemon franchise, and about 10% are left for Nintendo. 

That's still a significant amount that goes into Nintendo's coffers from the $4-$5 million daily revenue from the game, but not enough to justify the huge shift in market cap, at least for now. The soaring share price, however, could just be due to the fact that investors feel Nintendo is back, and are betting that other brilliant ideas will arise from there in the future. If it was all about current profits in investing, Amazon wouldn't have such an exorbitant market cap to begin with.

source: AppleInsider

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9 Comments

1. ibend

Posts: 6747; Member since: Sep 30, 2014

what did nintendo do for pokemon GO? :-/ - niantic is the developer and they're the one who pay the bill for server - google and apple, they make this game available for millions of players - pokemon franchise, they are the creator of pokemon

4. j2001m

Posts: 3060; Member since: Apr 28, 2014

If you ask me niantic and Nintendo are best to pull from Apple to Apple give them 5% fee as users will go to android to play this game, I be thinking 1st game that will happen on

8. kiko007

Posts: 7469; Member since: Feb 17, 2016

That's the most retarded idea I've ever seen. You'd take it away from the people who actually PAY for the game to give it to people who don't pay for anything? There have already been instances of mal-ware spotted due to asks downloads for cheats. THE GAME HASN'T EVEN BEEN OUT A WEEK YET! LMAO! Some strategy you've got there. You want Nintendo to go bankrupt?

9. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

It's will only happen if Nintendo sell an Android phone under their own brand. But still it would severally limit their income potential unless they changed the phone a whopping US$700 for mid range spec that normally would have cost US$200.

2. mammary.moon

Posts: 31; Member since: Jun 30, 2016

Nintendo owns 33% of The Pokémon company

3. Rydsmith unregistered

"...while the Pokemon Company is just a venture created to manage the licensing of the Pokemon characters, of which Nintendo owns a third." Thank you for reiterating exactly what was in the article.

5. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Who would be dumb enough to make in-app purchases in this game?! HaHa! I like Ingress, but this game is stupid. It's a fad that will wear off before this month is over.

6. Scott93274

Posts: 6025; Member since: Aug 06, 2013

the Franchise is 20 years old, and the latest game is getting global news coverage and you call it a fad... #butthurt.

7. TerryTerius unregistered

Enough people to apparently generate 4 to 5,000,000 in revenue on a daily basic, so quite a lot. I'm not necessarily sure I would call Pokémon a fad. It has been a successful franchise for 20 years. Of course the game will cool off like everything else does, but Pokémon itself has been going strong for a very long time. They must be doing something right, because it clearly has staying power. That said, to each their own. I never really liked ingress, but that is the beauty of personal preference.

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