McDonald’s Corporation: Pokémon Go Could Be Huge for MCD Stock

McDonald’s CorporationCould Pokémon Go Boost MCD Stock?

McDonald’s Corporation (NYSE:MCD) sales surged five percent in Japan thanks to “Pokémon Go” toys. They could have a similar effect in the U.S. Indeed, the hype around Pokémon Go is going to last a while. The game introduced by Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) continues to break records wherever it is introduced. Pokémon Go is like the tide that lifts all ships, including MCD stock, which has gained 3.5% in the past five days alone.

The Pokémon Go effect has added a boost to an already bullish period for McDonald’s stock. Since June 27, MCD stock has gained 6.45%. With Nintendo looking for more ways to monetize what is already its biggest-ever mobile success story, we could see a Pokémon/McDonald’s offering. Buy a hamburger and get a Pokémon Go toy, perhaps? Or maybe buy a burger, get more pokéballs?

Pokémon Go Can Sell Anything Now

As for McDonald’s stock, the Pokémon Go appeal will help boost store visits and sales. At least, that has certainly been the ticket to boost sales at McDonald’s Holdings Co., the Japanese unit of McDonald’s. The McDonald’s Japan unit is fully exploiting the Pokémon Go trend by turning restaurants into key locations in the game, thereby drawing in players. (Source: “McDonald’s Unit to Sponsor ‘Pokémon Go’ in Japan,” The Wall Street Journal, July 19, 2019.)

McDonald’s Japan has become one of the main companies to benefit from the Pokémon Go craze. McDonald’s Holdings stock in Japan has benefited from Pokémon to the tune of a 23% jump, surging to its highest value ever of it ¥3,740 (about US$35.00). Investors can trace the origin of this success directly to the new “Happy Meal” toys shaped as Pokémon. The company expects to attract more visitors by offering its customers different types of Pokémon toys.

Transforming a store or any other place of consumption into a “PokéStop” or “Gym,” types of areas used in the Pokémon app to denote where to find bonuses or battle other players, makes it necessarily more attractive to players. In other words, it is a rather good plan for the McDonald’s and Pokémon brands. They can exploit each other, as one helps to generate traffic and sales and the other offers an interesting venue to use the app while also increasing monetization opportunities.

Pokémon Go made its debut in Japan, the very home of Pokémon, yesterday and McDonald’s Japan has secured a coveted spot in what promises to be a major event for both companies, playing off each other’s visibility and marketing power. Japanese Pokémon players will have the privilege of being the first to try out the “sponsored location” feature. This turns a McDonald’s into a Gym. If it proves to be successful for McDonald’s Japan, it will most likely be introduced elsewhere. (Source: “Pokemon GO: Japan Launch Date and McDonald’s Partnership Confirmed,” Gamerant.com, July 19, 2016.)

Better still, the Pokémon association has erased any concerns over the potential effects of the Brexit (Britain’s decision to leave the EU). The Brexit had caused concerns of slower sales in the U.K., a key market in Europe for McDonald’s. For this reason, Credit Suisse had lowered its forecast for McDonald’s. (Source: “Britain’s bank stocks crash; Credit Suisse lowers McDonald’s target on Brexit fallout,” Yahoo! Finance, June 27, 2016.)

The Bottom Line on MCD Stock

Still, Credit Suisse also reiterated that McDonald’s stock remains a safe place to invest, especially in this period of economic uncertainty.

Of any major U.S. restaurant chain, McDonald’s is the most active in Europe. MCD stock could get a boost from being among the first advertisers on Pokémon Go as part of its related marketing initiatives.