Animoca Brands and iCandy report Pokemon Go-based interest [The Australian Business Review]

As advertisers and consumer-­oriented companies scramble to capitalise on the Pokemon Go craze, ASX-listed mobile games developers Animoca Brands and iCandy report the “augmented ­reality” game has spurred interest in their ­offerings.

“We have certainly received a lot more inquiries,’’ says Robby Yung, head of the Hong Kong-based Animoca Brands. “For ­investors it helps to reinvigorate interest in our industry for people who thought mobile gaming was getting mature.’’

The chairman of iCandy, Kin-Wai Lau, said the Singapore-based games developer experi­enced an uplift in downloads for its action-based suite of games, “partly’’ ­attributed to Pokemon Go’s wild popularity.

“I have received numerous ­investor inquiries since the Pokemon story broke,” he said. “One of our new games, Crab War, saw an increase of 300,000 downloads in the last week alone. The game is doing well in the US market.”

Animoca can most relate to ­Pokemon Go because its games are also bing tie-up with US games giant Mattel. These ­include Garfield and Thomas the Tank Engine. Animoca also uses the “free­mium” model by which the app is free but revenue is earned from add-ons, such as Pokemon’s virtual currency PokeCoins.

Mr Yung said he was surprised at the speed of the take-up of ­Pokemon Go, compared with the more slow-burn build-up of other blockbuster games such as Candy Crush and Angry Birds.

He attributes Pokemon Go’s success to being able to bridge youth and adult players with a 21-year-old brand. “It’s a fun game but I think a lot of it has to do with the Pokemon brand and the appeal to adults and kids,’’ he said.

But Mr Yung warned deve­lopers pitching their games to ­minors that they needed to be extra vigilant about privacy and security implications. Pokemon’s owners scrambled to fix a shortcoming that meant users agreed to hand over their login. An unresolved issue is that because the game is based on real time mapping, players know where fellow gamers ar need to be super compliant,’’ he says. “This is a game where most of the players are likely to be children.’’

While Pokemon Go has breathed life back into Nintendo shares — up 50 per cent since the July 7 launch — the geo-mapping-based game itself was developed by Google spin-off Niantic Labs and Nintendo’s financial benefit appears to be capped at royalties flowing from a part-owned subsidiary called Pokemon Company.

As with all crazes, imitation games will emerge and the void has been filled in China, where the game cannot be launched as Google is geo-blocked.

Mr Yung said many investors argued the Angry Birds and Candy Crush crazes would be hard to repeat because the world smartphones take-up has peaked in most Western countries. “But Pokemon Go is huge in Australia even though the (smartphone) market is saturated,’’ he said.

Despite the uptick of consumer interest, Animoca shares are trading below their 20c-a-share issue price in January last year.

A spin-off of ASX-listed techCandy itself listed on the ASX in February at 20c a share. Its most popular game, the “simple yet challenging” puzzle Sporos, has been downloaded five million times.

The stock closed at 18c on Friday but is rarely traded because of low liquidity, with Fatfish still owning 80 per cent.