Nintendo owns a 32% direct stake in the Pokemon Company and has a reported 30% stake in Niantic as well. And despite the massive early success Pokemon Go has enjoyed, Nintendo has opted not to revise that outlook for the time being. The next major launch for Pokemon go will be in China. However, Nintendo’s warning has shaved off about $6 billion from its market capitalization.
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“The market has overreacted to the Nintendo statement”, said David Gibson, a senior analyst at Macquarie Securities Group.
The stock closed down by more than 17 percent on Monday, following a statement from the company late Friday that the financial impact of the smartphone game would be “limited”.
The stock went down to 18 percent at the close in Tokyo, which is the maximum one-day move allowed by the exchange.
Short interest in Nintendo stood at US$1.2 billion (RM4.89 billion) yesterday and was climbing ahead of the company’s first-quarter report tomorrow, according to financial analytics firm S3. With the excitement generated by Pokemon GO, you can bet that Nintendo is excited about the prospects for those two games.
“Because of this accounting scheme, the income reflected on the company’s consolidated business results is limited”, Nintendo said in a press release.
Nintendo shares plunged Monday after the Japanese company warned that the Pokemon Go mania sweeping the world would not translate into bumper profits.
Niantic Labs’ AR game Pokemon Go has only been out a few days, and while the craze in undeniably still felt by players, the feeling may not be shared by stockholders.
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The app was initially released in a select number of countries and was rolled out in many more over the following weeks, including Japan on Friday.
