Nintendo shares crash after investors realize that it didn’t make Pokemon Go

Nintendo reminds investors that it did not make Pokemon Go, stocks crash by 18%

Nintendo’s share price took a big hit today, the biggest in 25 years, after a meteoric rise following the launch of Pokemon Go. The reason for the downfall is that the investors finally realized that Nintendo doesn’t actually own the mobile phenomenon.

Nintendo released a stock market statement last Friday in which it stated that Pokemon Go, which has become the highest-grossing app in most of the countries it has been released in, would only have a “limited” influence on Nintendo’s profits.

“[Pokemon Go] is developed and distributed by Niantic,” Nintendo said in a statement on Friday. “The Pokemon Company, which is an affiliated company of Nintendo, holds the ownership rights to Pokemon.” It adds that Nintendo only stands to gain 32% of whatever split TPC benefits from Pokemon Go.

As a result, at market close today, shares in Nintendo – which had soared by 50 percent – dropped by 18% wiping out more than $6.5 billion in the company’s market value. This is likely a signal for things to come, with the publication noting that 18% is the most a company’s stock can drop in a day. Since, Tokyo stock exchange rules prevent share prices fluctuating more than 18% in a single day, it is expected that Nintendo’s stock could continue to fall over the coming days.

“Taking the current situation into consideration, the company is not modifying the consolidated financial forecast for now,” Nintendo said. In other words, despite Pokemon Go’s huge success, the company did not expect any change in profit.

Nonetheless, we assume that the publicity is probably appreciated especially with Nintendo who is currently working with Japanese mobile developer DeNA on mobile apps. Having already released the puzzling lifestyle Miitomoapp, Nintendo also plans to launch Animal Crossing and Fire Emblem mobile games this autumn. After the huge success of Pokemon Go, it will undoubtedly garner more interest. While it’s not likely either of these will be as hugely popular and successful as Pokemon Go, they should hopefully prove interesting to investors.

Nintendo is scheduled to publish its latest earnings report on Wednesday, which is around $330 million in profits.

Kavita Iyer
Kavita Iyer
An individual, optimist, homemaker, foodie, a die hard cricket fan and most importantly one who believes in Being Human!!!


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