 "A Nintendo video game logo is seen at the Electronic Entertainment Expo, or E3, in Los Angeles (Photo: Reuters)")
The mobile game Pokemon Go has become a craze all over the world. The game, which uses smartphone features such as camera and location services, has also excited the stock markets. Share price of Nintendo, which is the publisher of Pokemon Go, has shot up from 15,000 JPY to around 23,000 JPY before shedding some of these gains.
Bangalore-based Ingovern Research Services said in a note that Pokemon Go was an example of successful shareholder activism. “Not many know that Pokemon Go is a great example of shareholder activism in recent times. Seth Fischer, who runs Oasis Management, a Hong Kong based hedge fund which is an investor in Nintendo, had donned the role of an activist investor by writing multiple letters from June 2013 to June 2014 to the CEO of Nintendo urging the company to develop and sell games for mobile platforms run by Apple and Google,” Ingovern said in the note.
In the first of his three letters in June 2013 to Satoru Iwata, CEO of Nintendo Fischer stated, “We think that you realise as we do, Nintendo’s competition is no longer just the Playstation 4 or Xbox one. Nintendo’s competition now includes Angry Birds, Candy Crush and Puzzle and Dragons. Today, there are 1.5 billion smart phones in the world and that number is growing at 31 per cent per year. There are 300 million tablets, growing at 70 per cent per year.”
Fischer added that “With these increasingly powerful products, a very large (and increasing) per centage of population are, holding a gaming tool in their hands all the time. I believe Nintendo can powerfully tap into that population.”
Elsewhere the fund manager wrote, “Nintendo needs to embrace this thematic change in consumer demand, behaviour and expectations to stay relevant... As the holder of what is arguably the largest library of casual games, Nintendo is well placed to make an immediate entry into mobile." Business Standard reviewed the letters, which are posted on the Oasis website.
Although his idea was initially met with resistance from both the company as well as users of Nintendo, the Company finally gave in to his idea and decided to enter mobile apps segment, Ingovern said. "Looking at the result – Pokemon Go – and the response of the markets, this is a case of a successful activism by an investor," Ingovern added.
A Nintendo spokesperson, however, was quoted by the Wall Street Journal earlier this week, saying that its push into mobile gaming is part of its own strategy and not due to any advice from shareholders.
The Oasis website also showed that Fischer has interests in India too. He had made a presentation on the attractiveness of Tata Motors shares, especially DVRs, at the Sohn Conference in Hong Kong in June 2014. Tata Motor DVR shares were trading at a steep discount to the ordinary shares although the economic value of both type of shares were the same.
