They also pointed out the company income reflected on its results are “limited”.
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“The market has overreacted to the Nintendo statement”, David Gibson, a senior analyst at Macquarie Securities Group, told Reuters. While it’s not likely either of these will be as hugely popular and successful as Pokemon Go, they should hopefully prove interesting to investors.
As a result, at market close today, shares in Nintendo – which had soared by 50 percent – dropped by 18% wiping out more than $6.5 billion in the company’s market value.
Nintendo is expected to release its financial report and outlook based on numbers from the first quarter this year in the coming days. The Pokemon Go creator is raking revenue from the in-app purchases and according to analysts at Citibank, the game has transformed the company into a unicorn. But it simply didn’t have a direct hand in this release (although it did, along with Google, invest many millions in the game’s publisher, Niantic, as it worked on Pokemon Go). The company is forecasting full year profit of 35 billion yen ($A440 million), more than double last year’s 16.5 billion yen ($A210 million). In other words, despite Pokemon Go’s huge success, the company did not expect any change in profit. Nintendo is projected to show a net loss of 8.9 billion yen for the period, as a stronger yen took a bite out of earnings overseas.
“Taking the current situation into consideration, the company is not modifying the consolidated financial forecast for now”, Nintendo said in a stock filing via BBC.
Nintendo said the earnings from Pokémon Go were already factored in when the company released its annual forecasts in April.
A man plays Pokemon Go on his smartphone outside of Nintendo’s flagship NYC store.
To be fair, keep in mind Nintendo stock is still up more than 60% over the past month thanks to optimism for Pokemon Go.
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Nintendo also has other potential revenue streams, not to mention its track record in delivering hit gaming devices.
