Nintendo’s share price has been supported by the massive uptake of the game as the market because investors believe the Japanese entertainment company will benefit from sales of in-app items. Nothing that Nintendo said in its announcement on Friday was new information – there isn’t a Nintendo logo to be found anywhere within Pokémon Go itself, and the status of the game’s ownership has been clear since it was announced a year ago.
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Stock tanked on the Nikkei Index when trading resumed on Monday, with shares at close of play down 17.7 per cent, or ¥5,000-reportedly its biggest decline since October 1990.
Hanke said the global popularity of the game, which incorporates colorful animated creatures from Nintendo’s Pokemon universe into the real world using augmented reality (AR) and Google mapping technology, had been “mind-blowing”.
Nintendo has a very small effective economic stake in the game at only 13% according to estimate from analyst David Gibson from Macquarie Securities.
The three companies collaborated on the game. At one point following the game’s release, company shares surged by more than 120%, adding $23 billion to Nintendo’s market value.
Pokemon Go is Nintendo’s first venture into mobile gaming as the company had until recently been keen to protect its console business from cannibalization.
John Hanke, founder of Niantic Labs and developer of “Pokemon Go”, was welcomed with loud applause from more than 6,500 fans on a stage usually reserved for star-studded presentations from movie studios and TV networks.
Nintendo added that it had already factored in expected revenues from its Pokémon GO Plus device, a wristband that alerts players of “pocket monsters” they can catch. The maximum profit share Nintendo stand to gain from Pokémon GO is 30 percent.
“Even if Pokemon Go does not directly contribute to Nintendo’s earnings, it owns other characters like Super Mario and Zelda”.
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Seven analysts’ estimates that have been revised since the game’s launch range from 36-billion yen to 60-billion yen.
