Nintendo’s stock is up 65 percent since last week, and it’s all due to the latest craze: Pokémon Go. Multinational companies rarely experience this kind of gangbusters growth. When it does happen, it’s because of a massive disconnect between Wall Street investors and the company’s consumer base — in this case, twentysomethings caused Pokémon Go to go viral. (It’s surprising that they underestimated this virality, considering augmented reality is practically made for Pokémon, but I digress.) And now these same investors are severely overestimating the value of Nintendo — the company that is part-owner of both Niantic, the company responsible for Pokémon Go, and Pokémon Co., which handles the licensing and merchandising and related money-making schemes of Pokémon characters.
The reason investors initially underestimated Nintendo is obvious: for years they had watched the company get slapped around by Sony, with their Playstation, and Microsoft, with Xbox, while the Wii U stagnated. Then, they finally figured it out. Pokémon Go has infested the conscious of America with a speed and scale that offers up no immediate comparisons. It makes Game of Thrones fervor look quaint.
But now the investors (and everyone else) are overestimating. In NYC, Union Square is swarming with twentysomethings grouped in clusters, murmuring and then suddenly aiming their phones in the direction of a lamp post. Journalists have heralded the game’s rudimentary use of AR as a prophetic sign of the future. (No shit.) Hollywood is jockeying to cash in on a live-action Pokémon movie. And Nintendo is riding the wave of buzz by announcing a mini-NES console. All of this is happening before the more important launch of Pokémon Go in Japan and other Asian markets, where the game originated; it’s also happening with a bug-infested app that barely works, and one in which huge portions of the game — like battling — occur only at certain locations. In rural areas, this can mean the game is essentially incomplete.
But the investors are all wrong. Just as they misunderstood the capacity for the meteoric rise of Pokémon Go, they misunderstand the capacity for its quick demise. Millennials are very good at moving on. Pogo sticks and yo-yos (and, ironically, Pokémon) typified fads of the past. But these earlier fads modeled a timeline that existed pre-Internet. And pre-Internet is a different universe entirely.While you read that last sentence someone, Millennials are on their way home from their first job out of college, sighing after catching yet another Rattata. The fun is fading. There are fundamental problems with the longevity of the game, which I won’t enumerate here, beyond to say that much of what made the original Gameboy version a hit didn’t survive the transfer to the smartphones app. All but the “stickiest” (nerdiest) of players will still be playing by the end of the summer (and then winter temperatures will really test the fortitude of those remaining). Financially speaking, the other largest demographic of players — high schoolers — aren’t a good market for free-to-play apps. They don’t have money to pour into the game. And below them are the youngest kids, who won’t be allowed to play, whether for lack of a smartphone or out of the concern of parents who don’t want their kids slipping out of the house and rushing into traffic to catch a Pokémon. My nephew, a Clash of Clans and Minecraft maestro, hasn’t touched the game and likely never will. And he’s exactly who Nintendo wants playing.
Older fans aside, kids are who buy the cards. They buy the figurines. They wear the shirts and host the Pokémon-themed birthday parties. Kids are why Cars 2 was produced; the real money is in the merchandising. Pokémon Go is a fun thing that twentysomethings will do for a week and then move on. Remember the Ice Bucket Challenge? How about the Harlem Shake? In 10 years, Pokémon Go will be just like them, relegated to a one-minute slot on VH1’s “I Love the 20-Teens!” (which will star older versions of Michael Ian Black, Hal Sparks, and Dee Snider — but not Jerry Springer, who will be dead).
Nintendo’s stock is at a five-year high, but nothing of value has changed. (When the new Nintendo NX console and The Legend of Zelda: Breath of the Wild release next year, then maybe we’ll talk.) Their stock isn’t rising because of breakthrough technology or a new and expensive thing that everyone is going to buy. It’s rising because of headlines and buzz and overconfidence in the attention span of a generation raised on the Internet. It’s rising because Pokémon Go is all anyone can talk about right now. But we will all be talking about something else, very soon.