Barclays: Expect Video Game Publishers To Emulate Pokémon GO's 'More Engaging Experience'

For anyone that hasn't been living under a rock the past week, Nintendo Co., Ltd (ADR) (OTC: NTDOY)'s latest mobile game, Pokémon GO, is a smashing success. While Nintendo's stock has more than doubled since bottoming at $15.34, the outlook on traditional video game publishers is now being called into question.

According to Barclays' Christopher Merwin, Pokémon GO found success as it leverages augmented reality technology to create a "much more engaged experience," something other large publishers are likely to emulate in the future.

"We believe mobile is an increasingly important platform for the video game publishers, now that it is not only the largest end market for gaming, but also the fastest growing," the analyst wrote. "We wouldn't be surprised to see more M&A in this space."

Related Link: T-Mobile Hopes To Capture Pokémon GO Users With New Offer

Merwin further noted that Pokémon GO's success is an example of the importance of branded IP on mobile. In terms of the traditional video game publishers, Electronic Arts Inc. (NASDAQ: EA) has long leveraged its console and PC-based game IP on mobile and Activision Blizzard, Inc. (NASDAQ: ATVI) can also do the same through its acquisition of King.

Finally, the analyst suggested that augmented reality is "more social and mass market" compared to virtual reality as no additional headset or equipment is required. As such, the augmented reality space could "gain prevalence in gaming more quickly."

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