The move may have been the result of a statement released by the company, which directly addresses the expected impact of Pokemon Go on its financial forecast.
Advertisement
The announcement by Nintendo appeared to take investors by surprise and had an immediate impact on its share price, with stock dropping 17 percent at one point, wiping around $6.4 billion off their value – their biggest decline since October 1990. With the launch of the game in Japan last week and Hong Kong Monday, many believe the market’s reaction to Nintendo’s statement to be overly harsh, considering the potential for future games, spin-offs and other merchandise. As of July 20, short-sellers had built up a bet worth $940 million – or 2.6 percent of outstanding shares – that the stock would fall, according to researcher IHS Markit. The stock had soared as investors bought the narrative, pushing capitalization and making the firm more valuable than Sony. The Pokémon Company, which owns the copyright to Pokémon, is a joint venture between Nintendo, Game Freak and development company Creatures. Pokemon Go is the augmented reality game that encourages players to actively walk and explore the world in search of Pokemon.
Nintendo is set to release their first-quarter results this week.
Ryozo Minagawa, an analyst at Nomura Securities, said, “We think that it is families that have been put off by a string of scandals at McDonald’s, and this customer group is also the target market for ‘Pokémon Go“.
Pokemon Go players at San Diego Comic-Con today may be the first to capture a legendary Pokemon. Niantic, which spun out of Google a year ago, partnered with Nintendo to create the game.
“Also, a peripheral device for use with the application, ‘Pokémon GO Plus, ‘ which will be produced and distributed by the Company, is scheduled for release”.
That said, a smaller chunk of an app that’s poised to become the biggest success in the history of mobile gaming is better than nothing at all, and Nintendo shareholders are likely still happy that the Japanese company is part of it all.
Advertisement
Seven analysts’ estimates that have been revised since the game’s launch range from 36 billion yen to 60 billion yen.
