Nintendo shares jump 10% as Pokmon Go paints a hopeful picture of the future

Company appears to be relaxing its hold on franchises, potentially allowing new revenue to replace that lost by underwhelming console sales

Pokmon GO is only out in a few countries so far, but the games astonishing success is already having an impact far and wide.

A mobile game for iOS and Android, Pokmon GO lets players catch the titular monsters in the real world. Players physical locations are tracked, and when they are nearby a Pokmon, theyre free to catch it by playing a simple mini game. Points of interest become item-granting Pokstops or player-battling gyms, while a pedometer feature lets players incubate and then hatch eggs, for yet more Pokmon.

Its simple, yet compelling, and all monetised through a hefty layer of in-app purchases (players can pay for more Pokballs, letting them catch more Pokmon, for more bag space and more incubators, and for items to heal and revive hurt Pokmon). As a result, the game is at the top of the free iOS apps charts in the US and Australia, where it has already been released. Android users in other countries have taken to sideloading the game, letting them get around the Pokmon Companys staged rollout. And it was so popular on launch day that the servers briefly failed, leaving avid gamers unable to catch em all or even catch any until they were restarted.

Its success even prompted a 10% jump in Nintendos shares overnight following the launch. Thats particularly impressive since Nintendo is only indirectly involved in the game. The company does, however, own 33% of the Pokmon company, which owns the Pokmon franchise and develops the main series of games, and it has also taken a stake in Niantic, the former Google subsidiary which developed Pokmon Go.

The success is telling for Nintendo nonetheless. Pokmon Go is the first Nintendo-exclusive game that the company has allowed to have a top-tier release on mobile devices, and its success augurs well for the companys future. Many industry observers have been concerned for Nintendo, which has taken a different tack to major competitors Sony and Microsoft, since it focuses heavily on first-party games that is, games developed and released by Nintendo exclusively for Nintendo consoles and equally heavily on mobile games for its New 3DS console.

The former focus means that the company has had trouble enticing a wide audience to its home console, the Wii U, since many potential customers perceive the lack of top-tier multi-platform titles as a reason to avoid the hardware. The latter keeps Nintendo particularly vulnerable to disruption from mobile gaming, which has a near-zero barrier to entry and fills many of the same needs as portable consoles.

By proving the success of Nintendos top-tier franchises on other platforms, as well as demonstrating that the company is able to relax its normally tight control over intellectual property, Pokmon Go paints a more hopeful picture of the companys future. The company has huge intangible assets like characters but it hasnt been trying to use them seriously. But the success of its Pokmon GO shows the company has got great content, an asset manager in Tokyo told Reuters.

The games success is also relieving for Niantic, which was spun off from Alphabet (Googles owner) in August 2015. Its first release since independence, Pokmon Go was such a big deal that it led to an investment from Nintendo.

Old habits die hard, however, and Nintendo will be getting involved directly in the near future: the company is building Pokmon Go Plus, a physical wearable which allows players to interact with the simpler features of the games without needing to pull out their phones. Shaped like a map pin, the device will vibrate when a pokmon or pokstop is nearby, and allow one-touch interaction with the latter features.

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