Gotta catch ‘em all. The newest Pokémon Go game has taken the world by storm. This 20-year-old classic franchise got a new makeover, mixing the thrill of a scavenger hunt with augmented reality.
While Pokémon Go has been a huge hit with fans, Nintendo Co. Ltd. investors have even more reason to be excited. Since Pokémon Go’s launch on July 8, Nintendo shares are up 53%, bringing market-value gains to $7.5 billion.
However, even though the new Pokémon game is a money-making powerhouse, Nintendo is not seeing a lot of those profits. Nintendo only makes 10% from the game, as well as an additional 10% from the company’s investment of $30 million for the project.
Alphabet Inc. (GOOGL) profits from Pokémon Go in two distinct ways. The game was created by Niantic, which was an in-house start up at Google. Niantic earns 30% of the game’s revenue, and since they went independent of Google in 2015, it is hard to know how much Google profits from the company.
Google also gets 30% of revenue from in-app purchases on Androids. While the game is free, players are making many in-game purchases to advance their playing experience. Considering that the Pokémon Go app has been downloaded more than the Tindr app on Android phones and used more frequently than Instagram and Snapchat, Google is making a nice profit from the game.
Apple Inc. (AAPL) also earns 30% from in-app purchases from iPhone, iPod, and iPad users. Another 30% of profits go to the Pokémon Company itself, which holds all the licensing rights of the Pokémon brand.
While Nintendo is not making the most profit from Pokémon Go, it is estimated that the company is still earning $800,000 to $1 million on a daily basis.
Let's just hope they keep adding features to the game and not just scrap it as soon as hype dies down.
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