A statement made on Friday by Nintendo saying that revenues from Pokémon Go would not impact its profits sent company shares tumbling as it revealed it has no control over the production nor ownership of the game.
The statement said that Pokémon Go “is developed and distributed by Niantic Inc” to which “the income reflected on the company’s consolidated business results is limited”
The news shocked investors around the world as the statement made clear that Nintendo would not be enjoying significant profits made due to the global phenomenon. Instead, the profits will go to US firm Niantic in partnership with Google.
Immediate reaction meant that the Kyoto-based company saw its biggest decline since October 1990 with its stock price plummeting down to 17.7% to its daily limit at (5,000 yen) having more than doubled in market value since its release earlier this month.
Despite the record fall, shares in the company remain up 60% as its market cap stands at 3.29bn.
The statement had little impact on the Nikkei 225 which closed at 16,620.20 -6.96 (-0.04%) in broadly flat trade.
Nintendo is due to report its first quarter results this week but said in its statement that “the company is not modifying the consolidated financial forecast for now”
Nintendo does however claim ownership to a 32% stake in the company and may see an overturn in profits produced with its up and coming release of Pokémon Go Plus this summer. However, Nintendo have stated that profits from this have been included in its 2016/17 fiscal year predictions.
25/07/2016