The video-gaming industry is surging into the future with cutting-edge hardware and photo-realistic displays.
Sony is on the cusp of releasing a virtual-reality headset for its world-beating PlayStation 4. Microsoft says it is working on the most powerful living-room game console of all time. Smartphones have made gamers out of hundreds of millions of people.
Meanwhile, Nintendo, a pioneer of video gaming, said it would release a video-game console it first started selling in 1983: the Nintendo Entertainment System.
That’s par for the course for the Kyoto, Japan-based company, which has its North American headquarters in Redmond, Washington, and has long charted its own course. In the last few years, the company’s approach has been to double down on the nostalgia fans feel for beloved franchises like Super Mario and Zelda rather than break new ground.
Michael Pachter, an analyst with Wedbush Securities, says the company has sharpened its focus on the young audience drawn to its cartoonlike franchises, as well as on “Nintendads,” or the generation that grew up when the company’s hardware was dominant in gaming, and now have kids of their own. “It’s what they’ve done after they had their lull,” he said.
In the past couple of weeks, the bet on the old standards has paid off handsomely.
Shares of Nintendo have nearly doubled in value, climbing 92 percent since the July 6 release of “Pokemon Go,” a smartphone version of the pocket monster battling franchise, partly owned by Nintendo, that was first released in 1996.
The new game quickly rose to the top of the charts in the Google and Apple app marketplaces and became a nationwide phenomenon, leading flocks of 20-somethings, looking more intently than usual at their phones, to gather outdoors to play the game.
The game’s success was especially noteworthy because there were “no aggressive marketing campaigns” before its launch, analysts with Morgan Stanley wrote in a note to investors.
It is unclear how much of a hand Nintendo had in creating “Pokemon Go,” which was developed by Niantic, a company spun out of Google that Nintendo has invested in but doesn’t control. Nintendo has said it is working on its own mobile games, as well as a new console called the NX, but it’s unclear how many games will migrate to the smartphone.
Nevertheless, the runaway success of “Pokemon Go” has investors speculating on the high value Nintendo’s other beloved characters might have if they featured in games on mobile devices. What kind of a splash could Nintendo make if it opted to put Mario or Zelda onto smartphones for the first time?
Asked how far nostalgia can take the company, Pachter compared Nintendo with a legendarily creative company that went through a rough patch: Disney.
“When Disney lost its creative juice, it bought Pixar, and Marvel and (Lucasfilm),” he said. “Then all of a sudden, they come up with ‘Frozen’ and ‘Zootopia.’ Clearly it worked for them.”