Success Of Pokemon Go Adds Impetus For Change At Nintendo

The phenomenal success of Pokemon Go and the surge in Nintendo Co’s (7974.T) market value by $17 billion in just over a week has been seized upon by one of its most vocal investors to press for a change of strategy at the company.

Until Pokemon Go, a mobile game, was launched just over a week ago in July 2016, Nintendo had taken every opportunity to say its main focus was still gaming consoles, and games for smartphones were just a means to lure more people to them.

But the success of Pokemon Go - unforeseen even by its creators - has shown the potential for augmented reality and for Nintendo to capitalize on a line-up of popular characters ranging from Zelda to Super Mario.

Seth Fischer, founder and chief investment officer at Oasis Management, is one of Asia’s best known hedge fund managers and has long been a small but loud shareholder. Encouraged by the success of mobile games like “Candy Crush”, he has campaigned for years for the Japanese console maker to develop and sell games for platforms run by Apple and Google.

“I hope they will now understand the power of smartphones,” Fischer told Reuters. “And as a result, I hope this means there is a whole change in strategy.”

“My next focus with Nintendo is for them to focus on monetizing the rest of their 4,000 patents for mobile gaming, multi-player gaming, et cetera. I think they could be making 30 to 60 billion yen ($290 million to $570 million) annually from licensing.”

Fischer has described Oasis as an advisor to entities that own Nintendo shares and a shareholder. The fund's direct holding is not listed among the company's largest investors.

Nintendo President Satoru Iwata last year cautioned against hoping for too much change at the company. The expansion into smartphone games was “not because we have lost our enthusiasm or prospects for the console business”, he said at the time.

A Nintendo spokesman, asked about its mobile strategy, said last week there were three main objectives —“To maximize exposure of Nintendo's intellectual properties to consumers, to make profits on mobile devices, and to create synergies with the console business.” He did not comment further on Pokemon Go.