Mr. Besim Abdullai

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The Nintendo Case Study: “Pokémon Go” and the Financial Markets

by Besim Verdi Abdullai, Vienna, 12.02.2017, 00:15 AM

The Nintendo Case Study: “Pokémon Go” and the Financial Markets

The History of “Pokémon Go” is a story about the people and the mechanism of the International Financial Markets.

In the period of few days, the fever of Nintendo’s Game App "Pokémon Go" conquered the World. Nobody was looking anymore toward their way, rather their mobile screens, showing some Monsters in the real world. People were running around like crazy to catch them in order to get as much points as possible.

As I asked one of the players in Vienna Burggarten, where more than hundreds of people were hunting Pokémon’s in a early summer morning: What did you win from this Game, he answered shortly: Nothing, maybe just Prestige!” In fact someone won or lost something!

After "Pokémon Go", the World became different, due to the distractions many Traffic Accidents happened and continue to happen, in some Countries even Police got influenced, Army interventions took place, and so long.

User played like crazy, not only had them, the Stock Markets Worldwide played like crazy too. The shares of the Japanese company Nintendo in stock Markets started to grow steadily. “Nintendo’s” shares grew from 125 Euro per share, to 210 Euro per share, and continued to grow further.

The Market value of Nintendo doubled in around 38 Billion Euro or 42 Billion USD. This growth surpassed even the Market Value of the giant "Sony".

This Game brought hope for the financial Markets in Japan. Nintendo was the cause for the biggest trade ever of shares in one single day that ever happened in the Market History of Japan.

Even though Nintendo did not invent the game, the later was invented from the company "Niantic". Nintendo gave only the License rights, which were published for the first time in 1996 for the "Game boy".

Nintendo is involved in the Development of “Niantic” and the “Pokémon Company”. "Niantic" once upon the time belonged fully to the company "Google".

The Shareholders and Investors thought that the enthusiasm for "Pokémon Go" will influence the “mother” Corporation of "Super Mario" and "Pikachu". This Hype was a good sign for Nintendo's entry to the Market of Game Apps.

The euphoria was already finished; end of July brought cold times for Nintendo. Shareholders and Investors started to sell their shares, the harvest times were in the past, they asked for stabile investments.

Thus, share prices of Nintendo started to shrink, and these were not the only factors that lead to this.

For example, Nintendo declared officially that the effects of “Pokémon Go” Hype will not bring any further fortune to the company, rather a slight or "limited influence". The Company officials said that they evaluated already the influences of this game toward its processes. This was not well accepted from the investors. Also, many rumors about problems with servers in Japan influenced negatively the share prices.

Japan, is not only the Homeland of Nintendo, but, for decades remained the biggest Smartphone-related Games Market of the World. (According to some analysts, China surpassed Japan in 2015).

Many people started to ask their self’s, how much is Nintendo's max capitalization from this game? It was very unclear!

In the process of development and customization of this game, three companies were involved: the developer "Niantic", the game giant "Nintendo", and the Pokémon Company "Pokémon Go".

"Nintendo" is and was partly owner of "Pokémon Go" and "Niantic", but, it was needed time until these companies saw any real money; others were fortunate in beforehand.

In this sense, owners of App Stores from Android and iOS i.e. companies “Google” and “Apple” saw these money first. This was a cocktail, which with time became too hot for the venture capitalists.

If one once played a mobile game, he probably knows that this can lead to an absolute race. This trend can happen to go backward also, some games get out of Mode quickly.

In the Market can happen to come another Game that can gain players interests and delivers new emotions.

Two Months after the game Pokémon Go in the App Store came, 500 Mio users downloaded the Game. “They were travelling around 8.7 Billion km, in their run to find Pokémon’s Monsters in the streets of their cities Worldwide” – declared John Hanke, the CEO of "Niantic", in a Press conference.

He added, “This means we influenced people’s lives and their movement, instead of staying at home they were running outside through Parks and Avenues on monster hunt”.

Actually there are not any more people in the Parks like before; as a result "Nintendo" lost 15 Million of its users. Around 30 Million users remained.

From a crazy popular Game, Pokémon remained a well accepted Game. Thus, "Pokémon Go" took his place in the History of the Gaming Industry. Even it remained a potential influencing power for further Game developments.

In general, this is not "the end" of “Pokémon Go”. Because, in every game is the same, at the beginning people just download some game from courtesy, and they get off very quickly, the remaining ones are the real Hardcore Fans. The "Forbes Magazine" wrote: "Nobody can jet conclude the death of this app".

In the late summer of 2016, the Developer "Niantic" and “Nintendo” came with an original idea of developing weapons for hunt of Pokémon Monsters in the real world. Further they developed the concept of "sponsored venues", where some special Monsters could appear. In this chain of venues, appeared to be interested also McDonalds of Japan.

Their intention was to attract potential new clients that on their intention to hunt Pokémon Monsters will end up in buying McDonalds products.

"Nintendo" developed also additional hardware, which came with "Pokémon Go Plus", a bracelet device that informed the player as soon as a Monster got close to them, a LED light started to flush, some players were ready also to spending money in order to buy additional functionalities.

Not only this; “Pokémon Go” achieved to be present worldwide in form of puppets and mascots, from the Fifth Avenue of Manhattan to the Charles Elyse of Paris, side by side with the comical figures like "Charlie Brown" or "Ditto".

All these movements in the real World are calculated in real money. After we look closer the Share prices of "Nintendo" at the end of the year 2016, is evident that “Nintendo” did a great job, shares remained 100 Euro above their price of June 2016 (before the intro of "Pokémon Go"). Not bad for a beginning, what do you think?






"China the new problem country", 

by Mag. Besim Verdi Abdullai, 13 February 2016, 12:05 AM, Vienna, Austria


China the new problem country

Even though for many not acceptable, China is the new problem country. It is one of the titles that many Newspapers last year had in cover pages in Europe. In the last decades China was considered as a miracle of Economical growth. For many a relocated and low cost extended profitable investment in the Banking sector.A big country like China also needs a Economical growth of 7%, so that many travelling workers find a job in the Factories. Many companies among them also the Chipproducer AT&S closed their Factories. This is a sign that Chinas image as money generating bank is at his end or will end soon. Due to higher fix costs of businesses, many years ago started the movement of investments from China in direction to Vietnam, or other similar countries. Thus, Chinas´ Economic growth has reached its limits. The world can not or does not want to buy so much products from China as this country produces. Since a while there are overcapacities in production. China´s Economy should transform his self, from an production Economy toward a service oriented Economy. They mus produce for their domestic market, rather than just for export, and Chinese people should increasingly start buying domestic products.
This transformation is going slower than many people were thinking, especially, because of the resistance (toward changes) of China´s Government.
In the last few years, experts were asking questions whether the Economy of the "middle" is going to take a slight "landing" or a sharp one. With the devaluation of the China´s curency last sommer, Chinas´ Governemnt was forced to save the Economy. Thus, China´s products were made even cheaper for the importing countries. The "shok" waves have been detected all around the globe. They had consequences for the Automobile industry also, especialy for VW, Audi, Mercedes, etc., becuase, as we know the Chinas´ economy is the bigest automobile Marketplace in the world. The second largest Economy, if is not consuming enought, it means a lot of troubles and negative efects not only for Firms and particular industries, but, for other Economies too, for example the European Economy. As a consequence, if the production in other economies is lower, the need for raw materials and oil, will be lower. This is the reason why many Bank experts and investment companies have an open eye toward happenings in China.
In this direction, the Investment Bank JP Morgan after many years predicts that in similar Economies like China, in the next year the unenployement rates will stop going down (last 6 years) and start goin up. This predicts a change in the growth of the World economy. The years of the continous growth of many countries is over.
The World Monetary Fond is predicting that the China´s growth will be not more than 4% in the next years. This is way lower than the predictions before and is a sign for a harder future for the World economy.




"Brazil - the country of the future”, 
by Mag. Besim Verdi Abdullai, 14. February 2016, 12:05 AM, Vienna, Austria


Brazil - “the country of the future”

For 25 years Brazil was a country with solid Economic Growth of around 7%. For many a country of the future. Many Banks and Investment houses, realized a good profit from their investments. The boom was very strong, and the economic growth seemed to have no limits. At once it was all over, what happened?

After the election of the new President of Brazil, Ms. Dima Rousseff, product prices increased, especially in the last year. Prices are in average 10% higher than last year, thus, people purchase less products. In the same time interest rates go up to 30% for simple consumer credits. At the other side, for companies the situation is not better, even though the Economic Growth needs a lot of investments in the country. With high interest rates Economic Growth looks hardly achievable. 
In this overall picture, what not fits are the lower prices for the technology products like digital cameras, laptops, personal computers, and similar. 
The other problem in Brazil is the bureaucracy. If a company would like to deliver its products from one Federal State to another, will need to pay very high federal taxes. Or, if one would like to buy a digital camera in the Discounter it should give its personal number, because, the Government want to know exactly who bought the device, even though Tourists does not have to show that.
After the Football World Cup in 2014, this year ongoing are the preparations for the Olympic Games 2016. In Barra de Tijuca, ongoing are construction works for the Olympia Park. Like all other construction works in Brazil, this project will be finished with delays until the very last moment. It is not sure that the new metro line will be ready for the Olympic Games. The Government planed an extension of the metro line from Ipanema to Barra de Tijuca. This, would give the opportunity to the sport fans, to reach Barra Olympic Park from Ipanema in just 30 minutes.
Beside all this anomalies, Brazil, the country of “sugarloaf” was elected as the “Economical super power of 21th century”. For a time was the US-dollar measured economic output of the country even before that of Great Britain. Predictions were saying that Brazil would until 2020 overhaul even Germany. Thanks to its big reserves of Oil and minerals, Brazil was for a long time a star among all Developing countries. Natural resources of Brazil are enormous. The land has around 8000 km of coast, and an area that fits the whole Europe in it. It has the biggest rainforest in the world, the longest river in the planet, in some places more flora and fauna in one hectare land than in the whole Europe together. 
In its book “Brazil, the country of future”, Stefan Zweig wrote: “Here the nature in a unique mood of waste, pressed that amount of well that could have been distributed in several countries”. Brazil would still have had everything in abundance, but, in forefront there are no good times for the economy.
The two big events the Football World Cup and the Olympic Games, converted Brazil into a hypothetically sick grown man. The currency is falling slightly, states bonds have a junk status. Is there a place for recovery? According to many experts not. Many name it the “new Greece”, just ten times bigger.
What happened? According to many people the politics is responsible. The corruption is again heavy spread among the politicians. The extreme expensive World Cup preparations in 2014 was just an example for it. The new construction of many unnecessary new Stadiums, took too much money and brought nothing to the ordinary people. With the new prestigious projects for the Olympic Games is the same situation. The only investment that will be again used is the Maracanã Stadium, where the opening ceremony of Olympic Games will take place. The Maracanã will be again partly reconstructed, this happens because of low quality of construction works, “someone should win the contract again”.
All this information does not mean a calm sleep for the new President Ms. Dilma Rousseff, she must constantly cope with new setbacks. The rating Agency S&P, down rated the State Bonds of Brazil in the level of “junk”. In correlation with USA dollar, the Brazilian currency Real, dropped for 35%. This makes the debts of this country hardly payable. For 2015 IMF predicts a shrink of the Brazilian Economy for up to 3%. The unemployment rate of Brazil (6,9% for Dec. 2016) is the highest among all Developing countries. Export revenues are breaking down due to the low Oil and mineral prices in the world market; which leads to the bigger foreign trade deficits, and growth of public dept. This charges the whole region, while Brazil is 50% of the whole economic power of the Latin America and has a leading role for markets of all South American countries.
After continuously growing negative mood of the population, the new President organized a clearance of the cabinet. She changed few Ministers, dismissed 3000 officials, and reduced the wages of the civil servants for 10%. People were not satisfied, because, as she was a President, for the second time in the history of Brazil there is a process for corruption against the head of the State. The Labor Party of Ms. Rousseffs before the elections in 2014, diverted 170 Mio Euro from the Oil Consortium Petrobas. The Consortium Petrobas as a state property, today - after six years, his market capital is worth only 10% of its exchange value from that time. This is how quickly is everything developing in Brazil.
The problems of Brazil will not end so quickly, even if the justice will overthrow the President out of power, the national situation of a big country like Brazil does not change overnight. Brazil with 8.5 Mio square kilometer of land, is the fifth biggest country in the world, very rich with minerals and nature goods. This makes Brazil very sensible economy due to the fact that is very dependable on world market prices of raw minerals. Just Russia and Venezuela are more dependable to raw material market prices than Brazil. In the good times when the raw material prices were very high, the Government used to spend too much and this trend is continuing today, thus it is clear that the state finances are not managed as it should. 
The debt ratio of Brazil is around 60% of the GDP, which according to European analysts looks like moderate. The international investors are angrier because of the corruption and the business favoritism to people related to the President. This does not deliver stability of investments and leads to weakening of the trust. This leads to great displeasure in the population of Brazil. At the other hand, also the workers organized in syndicates are in strikes continuously. Thus the country from its title of “future” and “promised land” has converted his self as a model for problems among Developing countries.