Nintendo Mobile: Miitomo, A Sign Of Things To Come?

Summary

  • Miitomo released in Japan and 1 million users signed up in the first 3 days.
  • Miitomo is unconventional and will be an excellent marketing tool if global downloads are strong.
  • We still need to see a traditional Nintendo game on mobile with proper monetization.

Introduction

Nintendo’s(OTCPK:NTDOY) long anticipated first mobile app was released in Japan on March 17th. Miitomo, a social networking app, garnered over one million users in Japan within three days of launch. As I write this article, NTDOY is up 5.5% with the share price rise driven apparently by the bullish adoption figures and the clear power of the Nintendo brand in the mobile space. This is good news for NTDOY investors as the mobile strategy is in the very early phases and the pent up demand for Nintendo on mobile is massive.

What is Miitomo?

Miitomo is an odd thing– not really a game, and not really a proper social network either. The easiest way to explain Miitomo is that it is a new version of Tomodachi life with a larger potential user base and mobile phone connectivity.

You start by creating a Mii avatar and answering some random personal questions. You can add friends from your other social networks such as Twitter and Facebook. Your avatar and your friends avatars interact and ask each other questions in sort of a “virtual life” simulation. Interactions earn you coins which you can spend on in game items like clothing or accessories for your Mii avatar.

Additionally, there is a pachinko like mini game which uses in game coins as well as a photo application that allows you to incorporate your Mii into real world pictures you take with your phone. Photos are stored on Nintendo’s servers and not on your phone. For more detail I strongly suggest you take a look at this article which has an excellent summary of the app.

In app purchases are free, but you can buy more coins with real world currency. Nintendo has stressed that users do not need to spend real world currency to get a full experience in Miitomo. This is good to hear as a predatory monetization strategy would surely limit widespread adoption of Nintendo’s mobile offerings.

How does Miitomo fit in with the broader mobile strategy?

Miitomo is an interesting choice for the first mobile application released. Tomodachi life was not a major success, but it sold reasonably well at +3 million units sold globally. There is potential for Miitomo to perform far better and reach a vastly larger audience given the app is free and available on iOS and Android to hundreds of millions of mobile phone users.

Purely from curiosity and familiarity with the Nintendo brand, many will download the app just to check it out. If the experience is interesting and offers enough social network “stickiness” some might even hang around and spend some money.

Miitomo will be successful at pulling in users to the Nintendo mobile ecosystem and will generate buzz in social media to increase awareness of future Nintendo mobile titles. In a sense, Miitomo is a marketing tool for Nintendo to lay the early foundation of their mobile strategy. I do not believe it will be a major contributor to revenues or profits, but if leveraged successfully when the big name mobile games are released, Miitomo will be the platform that drives the hype and generates consumer awareness.

Conclusion

Nintendo still needs to release an actual mobile game incorporating their primary IP. Miitomo feels like a small thing designed to help market the brand and build up an early user base. If one million users have already signed up in Japan, imagine what an actual Mario title will do if released into the mobile platform.

I remain very bullish about Nintendo as they are sitting on a gold mine of IP and backlog that will be incredibly profitable if they can execute an effective mobile strategy. The share price is up as of today, but there is still significant upside potential with the impending release of major information on the NX as well as the lineup of future mobile games. Expect major news around E3 in June which will certainly drive the share price higher.

The above article originally appeared on Seeking Alpha

 

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