It’s after the gaming company stated on Friday that profits earned from its affiliate stake in Pokemon Company, which owns the licensing rights to the sell-out game Pokemon GO, would be limited, and it did not plan to revise its earnings outlook for now.
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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. Billions were added to its market cap-the total value of all of it shares-helping it to reach more than double where it stood earlier this year.
Certain types of “Pokemon Go” characters may be added and only be acquired via trading.
The game – in which players move around in the real world searching for virtual Pokemon characters – was developed by United States firm NIANTIC. Nintendo has also promised to deliver five titles in the mobile industry, which is encouraging if they come anywhere near what “Pokemon Go” managed to accomplish.
Nintendo’s share price has dropped by the maximum amount for a single’s day trade in Japan after it released a statement clarifying its ownership position of Pokemon Go.
Instead, the game was developed by the team at Niantic and published by The Pokemon Company.
Nintendo stock went for a wild ride this month after the launch of Pokemon GO, leaping and then falling not because of the game’s actual profitability but because stockholders are skittish and prone to assumption.
On that note, analysts also reiterated the potential for the company to use its other IPs in order to boost the forecasted profit that Nintendo now has. Sure, Nintendo is getting a slice of the Pokemon Go pie, but not almost the portion being shared by the game’s actual developer or publisher. In morning trading today, the Kyoto-based company’s shares were down $2.36, or 8.14 percent, at $26.64.
According to Venture Beat, Pokemon Go has generated approximately $35 million in revenue within its first two weeks. Nintendo was part of the companies that made Pokemon GO a possibility. After the huge success of Pokemon Go, it will undoubtedly garner more interest.
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In other words, don’t expect Nintendo to adjust their expected earnings for the year once the Plus finally launches, as they’ve already done the math.
