Nintendo stocks have plummeted after investors realised the company only has a small economic stake in the game.
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In addition to the crowded servers, there are a few bugs that have made it through into the game and the most well-known one has been affectionately called the “three-steps glitch”. When the investors, who had earlier rushed to join the rat-race for investing into the idea that will become a global phenomenon very soon, re-evaluated the situation and rushed to extract their profits from the same.
Nintendo only owns 32 perceent of the Pokemon Company, the owners of the Pokemon brand, and the licensing rights to the world-wide sensation game, Pokemon Go.
Nintendo could also profit from sales of “Pokmon GO Plus”, a separate device that enhances the gaming experience.
Investors had assumed the partnership would inevitably mean a huge boost to Nintendo’s profits. About 6.3 billion yen of the company’s market value was wiped out in a single day.
Despite the fall in shares on Monday, Nintendo’s stock is still 60% higher than its pre-July 7 levels.
The sharp losses posted Monday reflect the new guidance from Nintendo.
In a press release after the market closed on Friday in Japan, the Kyoto-based company said the game’s financial impact will be “limited” and that it is not necessary to revise its annual forecast even after factoring in current conditions. The company further said they will not be making any modifications to their financial forecast as of the moment and will inform public once they do so.
As Canadians try to get their hands on the Pokémon GO app through unofficial sources, Lyndsay Wasser, partner and co-chair of the Cybersecurity group at McMillan joins BDPM for a look at the liability and legal issues surrounding the popular game.
The CEO also said that there will be developments within the game as well, which is where they will likely keep more and more players (and make more and more money).
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After doubling in value due to the popularity of Pokemon GO, Nintendo’s shares have tumbled after the company pointed out the smash-hit game would have only “limited” benefit for its earnings.
