Pokemon GO is a smash hit, but it's not yet a success
The overnight, widespread adoption of Nintendo and Niantic's Pokemon GO app has exceeded nearly everyone's expectations. Both the game's servers and Pokemon's official website have been so bombarded with new user registrations that it's forced the former to slow its international roll-out and the latter to periodically freeze account creations. Even if you can get online, frequent server timeouts, app crashes and the like are making it a pretty troubled experience -- but that hasn't stopped the world from turning Pokemon GO into not just a popular game, but a sensation.
However, sustainability in the mobile games market is a tall order. Despite already pulling in an estimated 7.6 million user registrations in the U.S. and $3.9 to $4.9 million in revenue in its first day, Nintendo is looking at a monthly target in the ballpark of $140 to $196 million in order for Pokemon GO to yield a meaningful profit for the company.
$196 million a month isn't impossible, mind you, just incredibly difficult. The first and second top-selling mobile games at the moment -- Game of War and Mobile Strike -- bring in about $136 million and $97 million respectively, according to CNBC. They don't have quite the crossover appeal of Pokemon, but they also have a lot more going on in terms of a core gameplay loop. Meanwhile, many of Pokemon GO's promised features haven't even gone live yet.
It may yet be that Pokemon GO will prove a short-lived novelty, on the same order as Nintendo's previous mobile release, Miitomo. There's at least decent evidence to suggest this app has staying power, though: there's the Pokemon brand, for one thing, and also the fact that the game's design propels real-world social interaction and collectivizing. And Nintendo's investors seem plenty confident, boosting the company's stock value by $7.5 billion since last week, its greatest surge since 1983 (you know, when the videogame market crashed).
One way or another, Pokemon GO will need to remain a top-ranked app over the long haul to make an impact for Nintendo. That's just the reality of the business when commercial success dictates innovation.