Shares of Nintendo Co 7974.T tumbled as much as 18 percent early on Monday after the company said smash-hit mobile game Pokemon GO would have only a limited impact on its earnings.
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To be fair, keep in mind Nintendo stock is still up more than 60% over the past month thanks to optimism for Pokemon Go. Bloomberg notes this is the biggest drop for Nintendo since 1990, although the price of the stock is still way up from where it was (just over 14,000 yen) when Pokemon Go first launched in the USA and other regions in early July.
In the Consolidated Financial Forecast of Nintendo, it stated that Niantic Inc.is responsible in the development and distribution of the “Pokemon GO” game in all smart devices.
However, Nintendo also pointed out it owns just 32% of the voting rights of The Pokemon Company, which is accounted for by using the equity method. Don’t worry about Nintendo though. Even with Mewtwo as allegedly the most powerful Pokemon, Mewtwo is still not helping Nintendo in making money.
It’s not surprising to see a correction in the rise of Nintendo’s stock prices, especially given its peripheral relationship with Pokemon GO.
Nintendo is expected to release its financial report and outlook based on numbers from the first quarter this year in the coming days.
“I believe that Pokémon Go will be material in the company’s earnings given the current trends for the game”.
If the Pokemon Go craze has staying power, Nintendo might be able to cash in on the purchase of add-on features for the game. By July 19 they had more than doubled, closing out at 31,770 yen ($299.49). But it simply didn’t have a direct hand in this release (although it did, along with Google, invest many millions in the game’s publisher, Niantic, as it worked on Pokemon Go).
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Pokemon GO is huge.
