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Trinity's Tai on Pokemon Go: Gameplay Is New Blockbuster(Audio) · Bloomberg Intelligence

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  Speaker 1: You're listening to taking stock with Pimpbox and Kathleen Hayes
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  Speaker 1: on Bluebird Radio. Nintendo, Yes, Nintendo, the maker of the
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  Speaker 1: popular Pokemon Go mobile game. The shares of Nintendo are
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  Speaker 1: up nearly ninety percent in the eight days since the
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  Speaker 1: game's launched. Indeed, Pokemon Go has been responsible for, in
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  Speaker 1: some cases, grown men falling off of cliffs in California
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  Speaker 1: and angry residents even hurling eggs at crowds of monster
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  Speaker 1: hunters in Australia. What does this mean that you should
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  Speaker 1: buy the stock of Nintendo and what's the future of
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  Speaker 1: video gaming? We've got Gus Tie. He is a general
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  Speaker 1: partner at Trinity Ventures. To tell us more. It joins
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  Speaker 1: us from men Low Park, California, and he can be
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  Speaker 1: followed at Trinity Ventures on Twitter. Gust Tie, thanks for
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  Speaker 1: being with us as a general partner at Trinity Ventures.
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  Speaker 1: Do you wish that you invested in the company that
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  Speaker 1: made Pokemon Go? Him? It's great to reconnect with you. Uh. Indeed,
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  Speaker 1: I would very much would have loved to have been
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  Speaker 1: an investor in that company. That company has a spin
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  Speaker 1: out of out of Google, So I wonder what Google
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  Speaker 1: is thinking about that spin out. Tell us about Pokemon
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  Speaker 1: Go and some of the details for people that have
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  Speaker 1: not attempted to play it. Yes, poke, Pokemon Go is
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  Speaker 1: a real phenomenon. It's a game that's a mobile game
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  Speaker 1: that was launched last week and as of today, according
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  Speaker 1: to serving monkey, there are twenty five million people who
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  Speaker 1: play this every single day. And that's for context, is
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  Speaker 1: five million more people than all the people in New
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  Speaker 1: York State. It's the combined total of population of ten
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  Speaker 1: largest cities, so it's quite amazing. And the nature of
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  Speaker 1: the game is that when you open it up and
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  Speaker 1: you walk around and you use it like a mapping
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  Speaker 1: software like a Google Maps or Apple Maps or ways,
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  Speaker 1: these objects will appear and their Pokemon animals. Now, Pokemon
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  Speaker 1: is a type of card game and video games and
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  Speaker 1: for those of you don't know it, it's around collecting
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  Speaker 1: pets that you grow, and it has a really neat
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  Speaker 1: known I p uh intellectual property around the item and
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  Speaker 1: uh it harkens back memories of childhoods for people who
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  Speaker 1: are older and for younger people watch cartoons. They can
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  Speaker 1: really relate to the characters. Now, the shares of of
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  Speaker 1: of Nintendo, they really only receive a portion of Pokemon
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  Speaker 1: Goes total revenues, right, because they've got like a third
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  Speaker 1: steak in the Pokemon company and then what an estimated
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  Speaker 1: maybe five to ten percent steak in the actual game
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  Speaker 1: developer Niantic. Yes, yes, and and so so the the
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  Speaker 1: there's a good question for how much Nintendo's stock should rise.
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  Speaker 1: Uh and and if you were to argue it was
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  Speaker 1: unfairly and lowly priced before, this may be awakening of
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  Speaker 1: the market if you felt it was properly priced. Adding
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  Speaker 1: ten billion dollars of value for the cash flow stream
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  Speaker 1: that they would be receiving from this title might be
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  Speaker 1: a bit of a stretch. I think the analogy for
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  Speaker 1: how to think about cash flow would be the company
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  Speaker 1: called super Cell, which has the top selling game prior
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  Speaker 1: to Pokemon Go, called Clash of Plans on both the
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  Speaker 1: Android and on the iOS. That title probably produces over
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  Speaker 1: a billion dollars of revenue a year and huge amount
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  Speaker 1: of profits. Last year. In fact, the company super Sell,
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  Speaker 1: which only makes three titles, reported two point three billion
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  Speaker 1: in revenue off of three titles, with nine million dollars
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  Speaker 1: of profits. If for sure, if Nintendo were able to
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  Speaker 1: have one or two titles that would have this type
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  Speaker 1: of retention and have the type of cash flow stream
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  Speaker 1: flowing to them, it'd be easy to understand that that
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  Speaker 1: that increase in share price. On the other hand, if
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  Speaker 1: they're not getting the full cut of prop fits, then
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  Speaker 1: you may have some questions about the press revenue price
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  Speaker 1: earning multiples of the stock. Now, August, I know that
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  Speaker 1: you've been doing this as a venture capitalist for more
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  Speaker 1: than two decades. I'm not trying to to date you here,
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  Speaker 1: but uh, is your phone and your email box getting
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  Speaker 1: clogged with offers for copycat like games? I am getting
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  Speaker 1: phone calls and has also reached out to developers developed that. Indeed,
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  Speaker 1: that's the case. The the this is so striking and
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  Speaker 1: the game is very well designed in many ways that
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  Speaker 1: this is just a new type of gameplay. This this
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  Speaker 1: is a new genre that will lead to many, many
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  Speaker 1: blockbuster titles over the next five years. So anyone who's
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  Speaker 1: a game developer should be paying attention to this, and
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  Speaker 1: indeed they are. You describe it as geo cashing. How
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  Speaker 1: do you describe it in English? Yes? Yes, I uh
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  Speaker 1: that was the nerd in me. The easy way to
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  Speaker 1: describe it in English is that the core premise of
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  Speaker 1: Pokemon Go is to go on a treasure hunt. So
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  Speaker 1: you you're walking around and you've clue is for where
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  Speaker 1: to look. In this case, it's a clue of some
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  Speaker 1: item that appears on your map, and you go there
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  Speaker 1: and you find it, and then in addition, you collect
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  Speaker 1: things and then you level things that as you grow items,
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  Speaker 1: and those are very common game mechanics. Gavenger hunts or
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  Speaker 1: treasure hunts are very popular, but not very common or
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  Speaker 1: active because they're too hard to set up. Millions of
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  Speaker 1: people do play them every year, but not collectively, and
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  Speaker 1: Pokemon Go unlock that. Do you believe that Pokemon Go
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  Speaker 1: could increase its revenue by organizing joint ventures with advertising
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  Speaker 1: and sponsors who are part of the location based game,
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  Speaker 1: Yeah for sure. So what's fascinating is that the game
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  Speaker 1: right now is a number one grossing title in iOS
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  Speaker 1: and I believe in Android, which if it's on par
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  Speaker 1: with Clash of Plans, it might be doing three to
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  Speaker 1: four million dollars of revenue a day in a very
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  Speaker 1: profitable way, and so that creates the incentive for other
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  Speaker 1: people to try to tap in into those monetary flows,
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  Speaker 1: so you can have advertisers on hearing of companies of
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  Speaker 1: of businesses. This is the game and allows a business
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  Speaker 1: to create, over a period of time a new Pokemon
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  Speaker 1: that you you can collect and put up a signal
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  Speaker 1: a flare to go to their business to go collect
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  Speaker 1: on it. And and so their bustinances are actually using
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  Speaker 1: this as a business function. And the last note I
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  Speaker 1: would mention is yelps. I think yesterday released a check
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  Speaker 1: box to say, is this restaurant near a Pokemon stop.
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  Speaker 1: Pokemon video games and restaurants all coming together, Thanks very much,
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  Speaker 1: Gus Tide, General partner, Trinity Ventures in Menlo Park, California.
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