Summer Days

Oh the joys of summer and relearning the teenage life through the eyes of my grand daughter.  An introduction to the world of Rattatas and Pinsirs as a player for Team Mystic.  Unless you’ve had your head in the sand, these are characters in the latest craze (fad) to rule the planet.  In case you’ve missed it, the newest ‘hot thing’ is none other than Pokémon Go.

In their review, TechCrunch said:

… the game, on its own, is phenomenally well designed, despite myriad bugs and endless server outages. If you look at all aspects of the game loop — engagement, retention, virality and monetization — it nails pretty much everything on the head. Niantic managed to hit a very rare, exceptional home run on every textbook point of the game’s development.

My guess is this will ultimately flame and burn, but how to profit from it?  Let’s track the possibilities.

  • The Pokémon franchise is owned by three companies, two of which are private (Game Freak and Creatures).  The third is Nintendo (NTDOY (adr)) which may now be overpriced.
  • The developer is Niantic which was spun out of Alphabet (GOOG) and is rumored to be an IPO candidate. (modified 21 Jul to provide better clarity in response to Doug’s comment)
  • In app purchases (Android Pay (GOOG) and Apple Store (AAPL))
  • Increased data plans (T, VZ, et.al.)
  • Data Centers (GOOG) (added 16 Jul)

There are always intricacies to ponder in the investing world.  Just like the real world … gotta go … I need to defend my gym from Team Instinct.

Do you play?

Updates:

  • 15 Jul – Niantic announced rollout t0 200 jurisdictions “soon”, T-Mobile (TMUS) announced free Pokémon Go data for one year, Nintendo owns about 10% of Creatures
  • 16 Jul – server issues bring the app down, Datacenter Dynamics believes the game is hosted on Google Cloud Platform
  • 17 Jul – saw two cars idling with their A/C on defending a gym – add gas stations/refineries to the list, with injuries on the rise a short on UNH/HUM etc. may be in order in addition to a long on medical REITs, finally – to be a little morbid – the first confirmed fatality may have STON as a beneficiary.
  • 18 Jul – Gamestop (GME) announced on CNBC that sales were up 100% in the 462 stores that are Pokéstops or Gyms, Zagg, Inc. (ZAGG) provides portable battery chargers.
  • 19 Jul – Insider Monkey reports the possibility of a hardware product development, McDonald’s (MCD) becomes a partner in Japan.
  • 20 Jul – Street Signs (CNBC) reports a delay in the Japan release due to concerns with server load resulting in up to a 15% price decline in NTDOY stock overnight.  But assuming the app has staying power IBD calculates it could be worth as much as $3B to Apple (AAPL), Key Bank (KEY) provides working capital (along with JPM, WFC and ZION) to Zagg.
  • 21 Jul – Project Fixup with their new Pokémon Go dating service, the first Pokémon Go death has been reported with teen being ambushed in Guatemala.
  • 22 Jul – Engadget reports Japan is launched and possible SoftBank (SFTBF) and Jamba Juice (JMBA) future sponsorship.
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10 thoughts on “Summer Days

  1. Interesting look at how to profit from the Pokemon Go craze, looking at trends in product/services can be a really good way to mark investment opportunities.. though I’m kind of hoping Pokemon Go is a short-lived fad that fizzles out soon, I can’t see it being maintained at this level of obsession for the average person.

    I just feel sorry for those people whose homes have been made “Gyms”. They definitely need to make it possible to remove locations from the game, our laws have not caught up with this type of technology blurring between real and tech world. I also don’t think they really thought through having Pokemon on highways..

    Jasmin

    Liked by 1 person

  2. hi Jasmin and good points. It appears Pokemon is beginning to monetize gym sponsorship rights, perhaps that will address a few issues. There are some positives with this fad – notably exercise. I’m still undecided on adding Nintendo to my portfolio as it appears their rights to monetization attempts are limited for Pokemon. But then there’s Mario and Donkey Kong …

    Liked by 1 person

  3. […] Since my piece, in our little slice of the universe both Well Rounded Investor and Investment Hunting presented their take.  Over on Seeking Alpha, Maks Financial Services has commenced a multi-part series (part 1 and part 2).  For good measure, there’s Smart Karma’s multi-parter as well (part 1 and part 2).  Maks’ probably did the best presentation with his Fitness Wearables category being one that I had not considered.  To pull these all together,  I believe there are seven distinct investment categories available.  Not all are suitable or attractively valued investments. […]

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