The plummet was caused by Nintendo admitting that they only own 32 percent of The Pokemon Company, the business behind the successful interactive and augmented reality game “Pokemon GO”.
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It was also acknowledged that the ongoing issues with servers need to be worked out first while Hanke spoke of a desire to make PokeStops more interesting locations, mainly by giving users more control over what they do.
The Pokemon Company would receive licensing fees and compensation for collaborating with developer Niantic on Pokemon Go, and Nintendo would receive only a thin slice of that revenue. Nintendo shares on the Tokyo Stock Exchange plunged the most allowed, wiping away nearly $7 billion in market value, after shares nearly doubled since the release of the game in which players seek to “capture” Pokemon Go characters.
Nintendo’s stock more than doubled in mid-July as the augmented reality smartphone game captivated fans around the world, with 21 million active US users in under two weeks of its launch.
Pokemon Go, which scored an unprecedented hit with gamers is not likely to benefit Nintendo.
In Australia, the ASX 200 also lost ground, shedding 0.4% to 5,514.10.
Once Pokemon Go launched, Nintendo’s stock skyrocketed, breaking all kinds of records for the company.
But some market players said Nintendo was being disingenuous, adding that there were few expectations of upward revisions to its profit targets so early after the game’s launch and that it was clear the game would be key to earnings.
Nintendo, scheduled to report first-quarter results Wednesday, would have to deliver annual net income of about 200 billion yen ($2 billion) to justify its market value at yesterday’s close, based on the profit multiples of Japan’s blue chips. The Pokémon Company is the Company’s affiliated company, accounted for by using the equity method. Last week, however, Nintendo sent out a brief letter titled “Notice regarding the impact of Pokemon Go on the consolidated financial forecast”.
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The creator of the wildly popular Pokemon Go gaming app received celebrity treatment on Sunday on the final day of San Diego’s annual Comic-Con, as he discussed the viral popularity and future of the game. Niantic, which spun out of Google previous year, partnered with Nintendo to create the game.
