Since Monday Nintendo stock has plummeted as the company admitted that the potential for profits from Pokemon Go are “limited” due to a lack of in-game advertising.
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A week ago, Nintendo shares had nearly doubled to $42 billion since the game was released July 6, first in Australia and then worldwide.
The financial impact of the free application – which makes some profit through in-app purchases – may not transform Nintendo’s bank balance, but how about the awaited Pokemon Go Plus accessory?
Pokémon Go is made by Niantic, an American company based in San Francisco, and licensed by the Pokemon Company, an affiliate in which Nintendo has a 32 percent stake. Don’t worry about Nintendo though.
Japanese students play “Pokemon Go” in the street as its released in Tokyo, Friday, July 22, 2016.
Whilst it appears to have taken investors by surprise, some analysts are saying the market has “overreacted” to the Nintendo statement.
Future updates coming to “Pokemon Go” will be making widespread changes to the massively-popular augmented reality (AR) title, and more specifics about them were revealed during the recently concluded Comic-Con panel for the game. Because of this accounting scheme, the income reflected on the Company’s consolidated business results is limited. For those that don’t know, Nintendo actually has very little to do with the recent success of Pokémon GO.
The company will be reporting on Wednesday about its first quarter earnings which is expected to be around 35 billion yen, as forecasted by the firm. The Pokémon Company, which owns the copyright to Pokémon, is a joint venture between Nintendo, Game Freak and development company Creatures.
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It wasn’t long after Pokemon GO launched that Nintendo enjoyed a great deal of success. According to a research note sent to investors last week, the company that created Pokemon Go is now worth $3.65 billion.
