As Nintendo stocks soar, companies look to augmented reality

Pokémon Go has added $23 billion to Nintendo's market value in less than a month. The success of this augmented reality smartphone game could lead to AR innovation elsewhere for consumers.

Tatan Syuflana/AP/File
A man in Jakarta, Indonesia plays Pokémon Go on his smartphone. Nintendo's stock has surged 120 percent since releasing the augmented reality game in July.

The hit smartphone app Pokémon Go has boosted Nintendo stock 120 percent, an added value of $23 billion, since the release of the game in the United States and Britain, and that's even before the game has been released in Japan, Nintendo’s home country.

Pokémon Go, an augmented reality (AR) game where players can wander around their neighborhoods to find tiny Pokémon (or “pocket monsters”), has quickly become the top free downloaded app in both Apple’s App Store and Google’s Play Store. Nintendo shares surged 14 percent on Tuesday, preceding the release of the game in Japan. Turnover of Nintendo stock reached 703.6 billion yen, surpassing the record it set on Friday of 476 billion yen.

Takashi Oba, senior strategist at Okasan Securities, told Fortune, “I’ve never seen the trend of such a big company’s shares changing so quickly in such a short period of time.”

The success of Pokémon Go could open up a new market of possibilities for Nintendo within the realm of augmented reality gaming. The company, which has been designing video games since the 1970s, avoided exploration into smartphone games for several years. In 2011, Nintendo released an app promoting the sale of Pokémon trading cards but said it would not release any smartphone games, according to the New York Times.

However, Nintendo’s dry spell of gaming hits, along with the lack of a recently released, popular gaming system, forced the company to reconsider reaching out to possible partners and moving into the world of smartphone apps.

“It’s quite a big change. If Niantic [the Google-owned American software company that partnered in the game's creation], had pitched Pokémon Go two years earlier," he said, “Nintendo wouldn’t have just said no, they wouldn’t even have listened,” Serkan Toto, a game industry consultant in Tokyo, told the New York Times.

Nintendo may warm up even more to the app industry after the runaway success of Pokémon Go, created through partnerships with Niantic and the Pokémon Company, of which Nintendo owns one-third. Nintendo, developers of Zelda and SuperMario, could be looking at a future designing augmented reality games for more of their beloved characters.

Pokémon Go’s rapid success has also spurred interest in expanding applications of augmented reality. Augmented reality, which differs from virtual reality in that it alters or enhances the picture of one’s environment without creating a completely artificial environment for users, could help consumers with more than the search for the coveted Pikachu.

Already, furniture retailer Ikea uses augmented reality to allow consumers to “try out” furniture in their own homes via the IKEA Catalog app. The app allows shoppers to aim one’s phone at a space in their living room and see the “projection” of a couch to decide whether it would fit or to try out how different colors work with the room.

Two other augmented reality apps on the market are Blippar and Geocaching. Blippar is an AR app that helps smartphone users learn about the world around them by posting facts about objects at which users point their phone. Geocaching sends users on a treasure hunt for small, physical objects.

Though the use of augmented reality is sometimes stilted due to glitches, future innovation in AR could lead to a variety of changes in the way we work, shop, and play. Soon, augmented reality could create the possibility of business meetings where individuals separated by distance can all be present in the same room or the opportunity for a more interactive training experience for employees.

Gareth Price, technical director for Ready Set Rocket, told Business News Daily, “Augmented reality for business offers promise both in communicating with customers, and within the organizations themselves for work functions.” Building off of Ikea’s use of augmented reality, consumers could soon use AR to better view products without heading to the store to see them in person.

The success of Pokémon Go promises change in more than just Nintendo. It could very well lead to change in how business interact and market products across the spectrum of consumer goods and services.

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