![\"508800-pokemon-go\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/508800-pokemon-go.jpg\")
<\/a><\/p>\nPlaystation 4 and Xbox One want to battle! Go! Wii U!<\/strong><\/p>\n The most recent battle in the video game console war pitted Nintendo\u2019s Wii U against Sony\u2019s Playstation 4 and Microsoft\u2019s Xbox One. While Nintendo had traditionally beaten its primary competitors in the past with innovative consoles such as the Wii, this next generation of hardware had a different outcome. The Wii U was poorly received by critics and fans, with Microsoft and Sony selling nearly two and four times<\/strong> as many Xbox One and Playstation 4 consoles respectively [1]. The Wii U is on the path of being discontinued, going down as the worst selling console in Nintendo history [2].<\/p>\n The Wii U\u2019s miss had massive ramifications on the company\u2019s financial performance, with profits falling over 60% year over year [3]. As Nintendo regrouped from the losses, they also looked forward to the next generation of hardware, unveiling a prototype for its next project called Switch<\/em>. However, this too was met with investor skepticism, resulting in another 6% drop in share price [4]. With its traditional hardware business falling further behind to the competition, Nintendo had to make significant changes to regain relevance in the evolving industry.<\/p>\n A wild Niantic<\/em> appeared!<\/strong><\/p>\n When Google restructured in late 2015, its mobile game development division spun off to become an independent entity called Niantic [5]. With a focus on innovation in augmented reality technology (AR), Niantic created its first game \u201cIngress,\u201d integrating video gaming with the real world through GPS and a mobile phone [5].<\/p>\n Through this success Nintendo saw an opportunity to capitalize on both a mobile platform and AR technology, investing in Niantic to collaborate on a new game with one of its key joint venture franchises, Pokemon [6]. The companies began working on an AR game titled \u201cPokemon Go\u201d that would allow users to interact with virtual Pokemon via their phones, bringing the hunt for catching the franchise\u2019s famous creatures into parks, restaurants and other everyday settings.<\/p>\n As the game prepared for launch in July 2016, questions remained on whether Nintendo could capitalize on such a drastic deviation from its traditional hardware business model. AR was largely unproven in the market, and this was Nintendo\u2019s first venture into mobile gaming. How successful could it be?<\/p>\n It\u2019s super effective!<\/strong><\/p>\n It turns out, pretty damn successful. As Pokemon Go was free to download and play, it quickly shot up to the top of the App Store with over 500 million downloads by the end of the month [7]. The game received additional publicity and attention from numerous media reports, from general coverage of the game-turned-phenomenon to incidents of unintended accidents and injuries while playing the game [8].<\/p>\n Pokemon Go was also massively successful financially. The game was structured in a \u201cfreemium\u201d model, in which it was free to download and play but offered in-app purchases for additional in-game items. Within just a few weeks of the game\u2019s launch, nearly $260 million in-app purchases had been made using this freemium model [9]. Although Nintendo did not reap the entirety of these sales, as it was Niantic that directly distributed the game, the company did benefit greatly from the success of its joint venture.<\/p>\n In just three months, Nintendo recorded a nearly $100 million profit through its partnerships \u2013 equaling 75% of the previous year\u2019s net income [10]. Furthermore, the popularity of Pokemon Go impacted Nintendo\u2019s traditional businesses as well, with improved sales of both regular hardware as well as a 30-50% increase in sales of Pokemon related products including games and trading cards [11]. A quick glance at Nintendo\u2019s share price after game release in July shows the magnitude of impact Pokemon Go has made to the company:<\/p>\n I wanna be the very best\u2026<\/strong><\/p>\n After the unprecedented success of Pokemon Go, Nintendo has begun to shift its focus towards the new opportunities in the ever-changing video game landscape. The company announced the upcoming release of another mobile game based on its most iconic franchise, Mario, in mid-December 2016 \u2013 an announcement that led to an additional stock increase of nearly 20% [12]. As technology continues to advance, Nintendo has shown it has the flexibility needed to adapt to this new market. And as its business model continues to evolve, beyond hardware and into mobile gaming and even further into unchartered territory such as virtual and augmented reality, the future looks bright for this iconic video game company.<\/p>\n <\/p>\n [794 words]<\/p>\n References:<\/p>\n [1] Ben Gilbert, \u201cThe PlayStation 4 is the most popular game console in the world,\u201d Business Insider, May 26, 2016, http:\/\/www.businessinsider.com\/playstation-4-sales-2016-5<\/a>, accessed November 2016.<\/p>\n [2] Nikkei, \u201cFor Nintendo’s Wii U, uniqueness was its downfall,\u201d Nikkei Asian Review, Nov 12, 2016, http:\/\/asia.nikkei.com\/Business\/Companies\/For-Nintendo-s-Wii-U-uniqueness-was-its-downfall<\/a>, accessed November 2016.<\/p>\n [3] Hudson Lockett, \u201cNintendo forecasts disappoint as FY profits slide,\u201d Financial Times, April 27, 2016, https:\/\/www.ft.com\/content\/09de77b2-d615-32db-8388-2b2da8672b4e<\/a>, accessed November 2016.<\/p>\n [4] Jonathan Soble, \u201cNintendo Switch Console Is Met With Skepticism From Investors,\u201d The New York Times, October 21, 2016, http:\/\/www.nytimes.com\/2016\/10\/22\/business\/international\/nintendo-stock-switch-console.html?_r=0<\/a>, accessed November 2016.<\/p>\n [5] Sophie Estienne, \u201cPokemon hunt leads to glory for Google-born Niantic,\u201d AFP, August 14, 2016, https:\/\/www.yahoo.com\/news\/pokemon-hunt-leads-glory-google-born-niantic-065922769.html<\/a>, accessed November 2016.<\/p>\n [6] Patrick Seitz, “‘Pokemon Go’ Craze has Retailers Hunting for Revenue,” Investor’s Business Daily, July 14, 2016, http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1804402603?accountid=11311<\/a>, accessed November 2016.<\/p>\n [7] Business Wire, ” Pokemon GO Exceeds 500 Million Downloads Worldwide,” Business Wire, September 7, 2016, http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1817357376?accountid=11311<\/a>, accessed November 2016.<\/p>\n [8] CBS News, ” This new Pokemon game is causing some real-world bruises,” CBS News, July 8, 2016, http:\/\/www.cbsnews.com\/news\/this-new-pokemon-game-is-causing-some-real-world-bruises\/<\/a>, accessed November 2016.<\/p>\n [9] Madhumita Murgia, ” Pok\u00e9mon Go crosses $250m in revenues since launch,” CBS News, August 12, 2016, https:\/\/www.ft.com\/content\/2dd63522-5fdf-11e6-ae3f-77baadeb1c93<\/a>, accessed November 2016.<\/p>\n [10] Jacky Wong, ” Pok\u00e9mon shows Nintendo Still has Path to Glory; Solid Profits from Nintendo’s Stake in Pok\u00e9mon Go is further Proof that Mobile Gaming–Not Consoles–is the Company’s Future,” Wall Street Journal, October 26, 2016, http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1832158033?accountid=11311<\/a>, accessed November 2016.<\/p>\n [11] Takashi Mochizuki, ” Pok\u00e9mon to Create Games for Nintendo’s Next System; Sales of Pok\u00e9mon Products have been Lifted by Popularity of Smartphone App ‘Pok\u00e9mon Go’,” Wall Street Journal, September 20, 2016, http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1821096026?accountid=11311<\/a>, accessed November 2016.<\/p>\n [12] Wataru Suzuki, \u201cSuper Mario iPhone game set for December 15 release,” Financial Times, November 15, 2016, https:\/\/www.ft.com\/content\/a978fc6f-7203-3826-8191-a7a99bfaa15b<\/a>, accessed November 2016.<\/p>\n Image References:<\/p>\n http:\/\/www.secretcharacters.com\/category\/pokemon-go\/<\/a><\/p>\n http:\/\/bgr.com\/2015\/02\/18\/ps4-vs-xbox-one-vs-wii-u-lifetime-console-sales\/<\/a><\/p>\n https:\/\/www.ft.com\/content\/237ab9e6-4724-11e6-b387-64ab0a67014c<\/a><\/p>\n http:\/\/www.vox.com\/2016\/7\/11\/12129162\/pokemon-go-android-ios-game<\/a><\/p>\n http:\/\/www.cnn.com\/2016\/07\/15\/health\/pokemon-go-players-fall-down-cliff\/<\/a><\/p>\n<\/a><\/a><\/a><\/a>