Shares in Nintendo plummeted the daily limit of 18 percent on Monday after the legendary gaming company told investors that Pokemon Go will have only a “limited” effect on its bottom line. Its disclosure around how little it stands to profit from this has meant this has taken a hit, though Nintendo still stands in much better shape than before the game hit the app stores. The Pokémon Company, which owns the copyright to Pokémon, is a joint venture between Nintendo, Game Freak and development company Creatures.
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The value of video game maker Nintendo, which had risen $17.6 billion since the release of Pokemon Go, gave back $6.7 billion in valuation on Monday.
The three companies collaborated on the game.
The stock plunged about 16 percent to 23,720 yen in early trading after it more than doubled in a huge rally following the game’s release earlier this month – making it more valuable than Sony at one stage. Niantic was a Google internal startup before being spun off, and the search giant remains an investor. “The Pokemon Company, which is an affiliated company of Nintendo, holds the ownership rights to Pokemon”.
The stock has since returned to earth, and shares are now up a more modest 60 percent from July 6.
Nintendo added that it had already factored in expected revenues from its Pokémon GO Plus device, a wristband that alerts players of “pocket monsters” they can catch.
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“Taking the current situation into consideration, the company is not modifying the consolidated financial forecast for now”, Nintendo said. Ditto for the licensing fees paid to The Pokemon Company. Nintendo, based in Kyoto, reports its financial results for the first half of 2016 on Wednesday.
