How a gaming app is changing Nintendo’s fortunes

Nintendo’s nascent push into mobile gaming with Pokemon Go has paid off. The video game maker did a major U-turn from its consoles-only policy, and its augmented reality game app has led Nintendo to shoot past Sony on Tuesday in market value after its stock more than doubled since the release of the wildly popular game.

Its stocks surged nearly 11 percent to end the morning at 30,780 yen ($290), up more than 100 percent from its July 6 close. Not only that, Nintendo on Friday also set a record for the most shares ever traded daily in Japan.

With this, Nintendo's market capitalisation also increased to 4.36 trillion yen, topping Sony’s by 300 billion yen.

Since its launch two weeks ago, the game for mobile gadgets has been a surprise hit and sparked a worldwide frenzy among users who have taken to the streets with their smartphones. The free app uses smartphone satellite location, graphics and camera capabilities to overlay cartoon monsters on real world settings, challenging players to capture and train the creatures for battles.

The Pokemon craze has also boosted other stocks in Tokyo. McDonald's Japan, which has been struggling to get past a series of food safety scandals, soared as much as 23 percent in the morning after it started giving away figurines based on the game's characters such as Pikachu, with Happy meals.

"Investors are flocking to Pokemon-related stocks and McDonald's Japan is one of those benefiting from the boom," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management.

The game was first launched in the United States, Australia, and New Zealand. Since the weekend it has been released in more than two dozen more countries, but it has yet to be released in Japan.