Nintendo reminded the investment community that it has no relation to Pokemon Go and its shares fell by 18%
The price of Nintendo's shares experienced a huge drop yesterday, the biggest in 25 years, after the massive rise it saw since the launch of Pokemon Go. The reason for the drop is that investors finally realized that the company does not actually own the phenomenon game.
The company released a statement to the stock market last Friday, in which it said that Pokemon Go, which has become the highest-grossing app in most of the countries it has been released in, will have a "limited" impact on Nintendo's earnings.
«Pokemon Go is developed and distributed by Niantic», it said in its statement on Friday. «The Pokemon Company, which is a subsidiary of Nintendo, holds the ownership rights to Pokemon.»
As a result, at yesterday's market close, the company's shares – which had surged by 50 percent – fell by 18% wiping out more than $ 6.5 billion in the company's market value. This is likely a sign of the events that follow, with the publication noting that 18% is the largest amount a company's share can decline in a day. It is expected that Nintendo's stock could continue to decline over the coming days.
Taking the current situation into account, the company is not modifying the consolidated financial forecasts for now», said Nintendo. In other words, despite the huge success of Pokemon Go, the company does not expect any change in profit.
Still, we're guessing the hype is probably appreciated, especially with Nintendo currently working with Japanese developer Dena on mobile. Having already released the enigmatic Miitomo app, the company is also planning to launch Animal Crossing and Fire Emblem this fall. After the huge success of Pokemon Go, it's bound to garner more interest.
