Less than three weeks after the launch of Pokémon Go and a 50pc increase in share price, Nintendo warned that the game’s financial impact will be limited, plunging its stock price down by 18pc.
It has been three weeks since the launch of Pokémon Go – and only a matter of days since its release in Japan – but the success of the augmented reality (AR) game has sparked a phenomenon like no other.
Among those standing to profit was Niantic, the game’s developers, but it had also been predicted that Nintendo was likely to return to profit-levels last seen during the heyday of the mid-1990s.
Pokémon Go effect negligible
Yet in the space of a few weeks, the company’s stock price has plummeted, after the gaming company revealed the financial impact from the launch of Pokémon Go will be limited.
According to Bloomberg, the company’s stock price sank by 18pc – or 23,220 yen – at the closing of the Tokyo-based stock market on Friday (22 July).
The resulting decrease led to 708bn yen (€6.1bn) being wiped from the company’s market value, denting the €16bn that was added in market capitalisation following the gaming company’s association with the game.
Contrary to some opinions, Nintendo does not own Pokémon Go. Rather, it owns a 13pc economic stake in the game and, in a statement issued by the company, said that the financial benefit of its stake in the game is so low that it will not need to change its economic forecasts.
China could change everything
This includes, Nintendo said, the upcoming launch of Pokémon Go Plus, a companion wristband that alerts players when a Pokémon character is nearby.
Nintendo is due to announce its earnings for Q1 of this financial year, estimating that it will make a profit of 35bn yen for the financial year, almost double the 16.5bn yen it made last year.
What could change this attitude from Nintendo, analysts from Morgan Stanley have said, is if the game launches in China.
Given the country’s standing as one of the largest consumer markets in the world, the financial benefits to Niantic and Nintendo would be considerable, but the country’s government will not allow the game to be launched there because of its collection of geographical data.
Pokémon Go app image via Abraksis/Shutterstock