Freeze Tag, Inc. (OTCMKTS:FRZT) has some traders wondering if this tiny gaming company has created the next Pokemon GO? In 2016, one of the surprise breakout gaming hits of the year was Nintendo’s Pokemon GO, an augmented reality mobile social game that became a worldwide phenomenon. And one year later, California-based mobile social games creator Freeze Tag, Inc. (OTCMKTS: FRZT) thinks it has created the perfect follow-up: an augmented reality mobile social game based on the popular Garfield cartoon character. Excitement around the release of that game is why FRZT has been rocketing to new highs in 2017.
Shares of FRZT are currently trading at $0.004, giving the company a total market capitalization of $2.71 million. Over the most recent 52-week period, shares have traded as low as $0.00 and as high as $0.01. On a YTD basis, shares are up a spectacular 1,300%. But over the most recent 5 days of trading, shares are actually down 50.59%.
The fact that Freeze Tag, Inc. (OTCMKTS:FRZT) shares are down so much in the past 5 days is more than just a coincidence – the timing also lines up perfectly with the company’s official launch of Garfield GO, its new mobile social game. The official launch date was June 13, and that was timed to coincide with the 39-year anniversary of Garfield on June 19.
It’s not surprising that this game was hyped relentlessly as “the next Pokemon GO.” For now, FRZT is currently targeting the U.S., Canada, and Australia with the game. And to draw in even more users, the company has included real-money prizes within the game itself. In other words, you might be wandering around with your mobile phone in search of hidden treasures for Garfield, and accidentally stumble upon real money prizes like an Amazon gift card. It’s obvious to see how that might lure in users who might otherwise be skeptical about augmented reality (AR) gaming.
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There’s just one problem here, at least from the perspective of potential investors – there is a need for users to make a lot of in-app purchases for the game to be profitable. If you’re going to spend a lot of money developing a new game (Freeze Tag partnered with Munzee on the game), and you’re going to make the game available for free on the App Store and the Google Play Store, then you’re going to need people to make a lot of in-app purchases for it to pay off.
Moreover, it’s not a certainty that, just because Pokemon GO was a huge hit globally, that Garfield GO will also be a huge hit. While mobile social gaming is a hot space right now, it’s also very fickle in terms of consumer tastes. The idea at Freeze Tag was that the ability to leverage a cartoon favorite (Garfield) would be a sure way to attract as many people as possible to the game.
In terms of other games that Freeze Tag has developed, there are the following: Victorian MysteriesO, Unsolved Mystery ClubO, and Etch A SketchO. The company markets, sells and distributes these games through direct-to-consumer storefronts (Apple’s App Store, Google Play Store, and Amazon’s App Store). Moreover, some FRZT games are available via PC download portals, such as Big Fish Games and Gamehouse.
The primary premise behind these mobile social games is that you need to play them with others to be fun. You compete and engage with friends on social networks. Thus, they are very different from the types of solo video gaming experiences that many people are used to. But it also means that “getting big fast” is key to the success of these games – if none of your friends are playing the game, there’s little incentive for you to play also.
That’s what is so concerning about the recent stock correction in FRZT over the past five days: it could be a disturbing sign that the player signups just are not as high as expected for Garfield GO. Moreover, consider the short interest in FRZT. In June, total short interest was 14,800 shares, up more than 208% from the 4,800 shares reported in the previous period. In other words, traders are shorting the stock and betting on a further decline.
Going forward, the best advice is to keep a careful eye on the success of Garfield GO. If it’s starting to become a big story in the mainstream media, and everyone you know is playing it, then that’s the best evidence possible that this new game could become a moneymaker for FRZT and send the stock even higher. For more news on Freeze Tag and other fast-moving penny stocks, please subscribe to FinanceRegistrar.com below.