Nintendo’s share price dropped roughly 18 percent in one day on the Tokyo Stock Exchange, a plunge most likely due to investors finally realizing the company is not responsible for creating the newest craze in mobile gaming: Pokémon Go.
The game initially caused Nintendo’s share price to double in only a few weeks. The stock price soared even further once the game hit Japanese markets.
After the stock market closed, Nintendo made a public statement titled “Notice Regarding the Impact of ‘Pokémon GO’ on the Consolidated Financial Forecast,” which highlights the fact that they do not own, nor make, Pokémon Go. While the stock went down 18 percent in one day, it has fallen approximately 29 percent since the July 19 high.
Nintendo explains that Pokémon Go “is developed and distributed by Niantic, Inc.” and that The Pokémon Company has ownership rights of Pokémon. Nintendo “owns 32% of the voting power of The Pokémon Company” and that “because of this accounting scheme, the income reflected on the Company’s consolidated business results is limited.”
The delay in investor awareness shows that much of the public are not exactly sure who receives the monetary benefits of this cultural and technological phenomenon. The only sign so far that could potentially explain the sudden dip in Nintendo’s stock price is the published notice.
Nintendo stresses that they will distribute and produce “Pokémon GO Plus,” a playable accessory that can be used instead of a smartphone, which will purportedly keep their valuation accurate and optimistic. Nintendo is confident that this new feature and the continued popularity of Pokémon Go will allow it to stabilize. That is why the company “is not modifying the consolidated financial forecast for now.”
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