Investors Are Already Bidding Up Secondary Plays on Pokemon GO
For mobile gamers looking to catch 'em all on the new Pokemon GO augmented reality app, running out of battery is as big a problem as running out of Pokeballs.
As millions of Americans go on long stakeouts for Pikachus or Bulbasaurs, they're enlisting the help of battery cases to ensure their phones don't run out of juice right before the big score.
According to Wall Street analysts, that's responsible for a surge in the shares of Zagg Inc., which manufacturers battery cases. It's jumped 12.5 percent over the past two sessions:
"It seems that the rise in Zagg is due to the power drain effect of the (Pokemon Go) game. Everyone is going out and buying these phone cases," said Wunderlich Securities Inc. Analyst Rommel Dionisio in a phone interview, who noted that the firm acquired Mophie Inc. in February of this year. "Mophie has over 80 percent market share for these battery-saving cases in the U.S."
"Our checks of various Apple, AT&T, Best Buy, Target, and Verizon stores across the country indicated a surge in demand for power management products, including battery cases. More than 35 percent of the ~50 retail locations we surveyed noted increased demand and many specifically cited the popularity of Pokémon Go," added Roth Capital Partners LLC Analyst Dave King, who upped his price target on Zagg to $6 from $5, while maintaining a neutral rating on the stock. "We believe Anker’s PowerCore 20100 may be the largest product beneficiary, based on Reddit posts and a well-timed Amazon promotion."
Amazon reviewers, meanwhile, are raving about how these products are increasing the longevity of their gaming sessions.
"The best use of this case is for people who actually play Pokemon GO, because this case could help you to play some more hours using that battery killer game," wrote one reviewer.
To experience all the game's features, the app uses a smartphone's camera, GPS locator, graphics processor and more, according to CNET, which takes an immense toll on battery life.
Niantec Labs, the developer of the Pokemon GO app, lists "heavy battery use" as a known issue with the game, and says it is "working on a solution" for this problem.
In publicly traded markets, Nintendo Co. Ltd has been the primary beneficiary of the game's release and stunning popularity, with the stock up by nearly 76 percent since July 6.
History doesn't repeat itself, but — like the PokeRap — it surely does rhyme.
The last time the Pokemon went viral in the late 1990s, publicly traded companies that made merchandise related to the game, and constituted an ancillary play on the phenomenon, also went gangbusters.