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Speaker 1: potential for further gains with shares near records. SMP five

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Speaker 1: hundred index lower now by five points to fifty eight,

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Speaker 1: down two tenths of one percent as stacked down nine.

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Speaker 1: Also a drop of two tenths of one percent down.

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Speaker 1: Industrials down eight a drop of less than point one percent.

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Speaker 1: nine percent, Gold lawer by four fifty thirty seven, a

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Speaker 1: very close to forty six dollars a barrel right now

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Speaker 1: thirty cents. That is a gain of six tenths of

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Speaker 1: one percent. I'm Charlie Pellett and that's a Bloomberg business flash.

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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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Speaker 1: This is taking Stock and this is Bloomberg. Coming up

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Speaker 1: on taking Stock, will be speaking with the former Undersecretary

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Speaker 1: of Commerce for the Clinton administration. Will find out how

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Speaker 1: the US presidential election will affect technology policy. That's coming

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Speaker 1: up next