Nintendo’s Massive Gains Buoying Japanese Stock ETF

japanese GDP growthThe internet is ablaze with hundreds of millions of users of Nintendo’s new Pokemon Go mobile app discussing the game. Nintendo, which owns a piece of the Pokemon franchise, is getting a huge bump from it, and that in turn is helping buoy Japan-focused ETFs.

The Blockbuster Game

Pokemon Go is a so-called “augmented reality” game in which players use their mobile devices to interact with the real world — with virtual elements blended in. According to Wikipedia:

“The game allows players to capture, battle, and train virtual Pokémon who appear throughout the real world. It makes use of GPS and the camera of compatible devices. Although the game is free-to-play, it supports in-app purchases of additional gameplay items.”

pokemon-go

Since its U.S. release on July 6, Pokemon Go has eclipsed Twitter in terms of daily users, and bested Facebook in terms of user engagement. Players on average spend a staggering 33 minutes within the app each day.

Such huge adoption will likely translate into big profits for The Pokemon Company.

Nintendo’s Recent Gains

Video game giant Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY), which owns 33% of The Pokemon Company, stands to benefit greatly from the game’s success. This potential hasn’t gone unnoticed by the markets: Nintendo shares were up $3.82 (+14.40%) in Thursday trading to $30.34 per share.

The stock has now gained more than 71% since the game was released.

Japan Index ETF Benefiting

Nintendo’s huge rally has helped bolster the iShares MSCI Japan ETF (NYSEARCA:EWJ) as well. The index has gained more than 4% since Pokemon Go’s release, and added another $0.05 (+0.42%) in Thursday trading to $11.94 per share.

Although Nintendo represents only about 0.5% of the EWJ index, it’s clear investors are flocking to Japan for their own piece of the Pokemon pie.

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