Nintendo’s highly-anticipated “Super Mario Run” mobile game became the top downloaded iPhone app in the U.S. within an hour of its release on December 15, 2016.
The app for Android devices is set to premiere in early 2017.
The game’s release follows the successful launch of the Pokemon Go game, which led to Nintendo shares climbing over 60 percent since its release in July 2016.
Share prices dropped upon the realization that Nintendo’s profits would be minimal due to their marginal role in the game’s development.
Super Mario Run, which is the first iPhone game developed by the company is under scrutiny by some who question its profitability.
Atul Goyal, a senior analyst at Jefferies, told CNBC’s “Squawkbox” that he foresaw 500 million downloads of the game in the Apple app store by March 2017. He continued on to say that he expected 1 billion downloads overall, across all operating systems.
Nintendo shares fell 10.57 percent this week. Some investors consider the company’s new mobile push a risky strategy.
Some question whether or not users will be willing to pay $9.99 dollars to unlock the full game after playing the first three free levels. Still, despite the seemingly high price tag for the download, it may ultimately cost less than other games with in-app purchases.
Chief technical analyst D.R. Barton of MoneyMorning.com believes the game will develop traction for nostalgic players. He claims that it will require a few more weeks to determine whether or not the game will develop traction.
Despite some skepticism, other analysts have high hopes for the app and its revenue potential.
“10 percent or so are most likely willing to pay, probably even more,” Goyal told CNBC, “In Japan alone, people have bought 25 million 3DS devices for $200 apiece to be able to play Nintendo games. For them to spend $10 to play a Nintendo game on a device they already own (is practically nothing).”
Goyal believes Nintendo’s venture into mobile will expand its customer base and revenue stream by targeting casual gamers.
While some are concerned with the fleeting nature of app popularity, Goyal attributes the drop in Pokemon Go to saturation.
“It’s not the console that you remember … What you remember (are) Nintendo games,” Goyal said, “So don’t look at console versus mobile, it’s the intellectual property (and) the brand that Nintendo brings — Mario, Zelda, Pokemon … plenty others.”
