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Nintendo released its Pokémon Go app in July, and Apple says it was the most downloaded app in a first week ever. More than 25 million people download and play the game every day; most of them are under the age of 25. They spend hours staring into their smartphones while roaming the streets looking to capture Pokémon. The game promises to get people off the couch and get them outside. The game is very addicting, and some play for hours at a time. Unfortunately, there have been a few incidents where injuries occurred because players are not paying attention where they are walking. The app is now available in more than 36 countries. The Pokemon Co. is a Japanese company owned by Nintendo, but the app was not available in Japan until last week. Developers of the game had to stagger its release in an attempt to minimize the load on its servers. The Japanese government issued a warning to players. Their one-page flier warns players of potential danger they could encounter as they search for Pokemon.

Nintendo shareholders are enjoying the ride on this wave – their stock price has doubled over the last few weeks. Nintendo was the most traded Japanese stock in any one day in this century! The volume of Nintendo stock traded exceeded $6 billion – more than 25% of all the trades in Tokyo Stock Market. Certainly, it is the new record for daily trading of a single company.

It may be too soon to pick out the winners and losers for 2016; however, if Pokémon continues its popularity, Nintendo will post strong results for fiscal year 2016 after five years of lackluster performance.

The mobile app segment is a change in strategy for Nintendo. Nintendo gained its success from game consoles that plugged into TVs. They competed against Sony and Microsoft, and were very successful in the home video game console market. The smartphone changed everything. Streaming became the norm, and Nintendo was slow to adopt this new venue to deliver games. New applications created for smartphones have taken over the game market. The success from Pokémon Go will force Sony and Microsoft to reevaluate their strategy in the video game industry.

After a few stumbles in the mobile app business, Nintendo has finally hit a home run. Industry analysts are predicting that mobile game revenues will overtake console games.

Now the bad news – back to my world. Electronics manufacturers are concerned with a drop in business because Pokémon Go doesn’t need electronic devices or controllers if customers already have smartphones. Nintendo plans to continue manufacturing its game consoles, but predicts a drop in revenue from this segment. Other game manufacturers will have to transition from game consoles to mobile app platforms to remain profitable. This will be disappointing for EMS companies, component suppliers and circuit board manufactures. Electronic products related to the video game industry are a significant contribution to the bottom line for many affiliated with the electronics industry. Engineers are creating ways to deliver products and information to the consumer even faster and cheaper. It’s OK to replace the way we do things with better ways, but unfortunately, the technology eliminates many jobs from the electronics industry.

Dominique K. Numakura

DKN Research

www.dknresearchllc.com

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Headlines of the Week (Contact This email address is being protected from spambots. You need JavaScript enabled to view it. for further information.)

1. OKI will acquire Nippon Avionics's printed circuit business. Nippon Avionics has been making high end circuits for aerospace equipment.

2. Showa Denko plans to expand its overseas business of artificial lighting plants of vegetables. The plants use LED lighting to control the conditions.

3. Brother developed a large-scale hydrogen base fuel cell system “CS B2018” for industrial uses. The size of the device is 1/6 compared to Li Ion batteries.

4. Riken developed a bio-chemical process to activate surface of titanium metal for in-plant medical devices.

5. Murata decided to build a six-layer plant in Toyama prefecture to increase manufacturing capacity. Demand for components is still growing.

6. Toshiba developed a hydrogen generator for fuel cells introducing an electrolysis process of alkaline solution. It produces 100Nm per hour.

7. Tohoku University codeveloped a new conductive graphene material with sponge structure. It makes capacitance of the capacitors double.

8. Tosoh developed a gas-barrier material “TG-4E” for flexible displays such as organic EL panels.

9. Riken co-developed a new thin film actuator. It works permanently getting the energy from temperature fluctuation.

10. Hiroshima University co-developed a new practical hydrogen generation process from ammonia using ruthenium based catalysis.


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