Investors’ Ignorance Causes Nintendo Stock to Plummet

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Investors' Ignorance Causes Nintendo Stock to Plummet
Image: Nintendo News

Investors caused Nintendo’s market cap to soar past Sony’s, but their ignorance is to blame for sending the game maker’s stock plummeting.

Millions worldwide now have a piece of the Pokémon GO pie within their fingertips — kids, moms, dads, and grandparents. Others, however, have set their sights on purchasing Nintendo’s stock following the mobile game’s instant craze, for all the wrong reasons.

Pokémon GO began rolling out to Android and iOS on July 6, and its presence was felt immediately — everyone wanted to catch the action. When The Tokyo Stock Exchange closed on July 19, Nintendo’s value spiked, doubling to nearly $40 billion — eclipsing Sony by about $1.5 billion.

But when investors learned that Pokémon GO was not a Nintendo game, they began bailing out. Nintendo currently owns 32 percent of The Pokémon Company, who owns the Pokémon brand. The Pokémon Company and Niantic Labs co-developed Pokémon GO.

“The Pokémon Company owns all the characters that are in the game, so they’ll get a lot of licensing fees … a lot of licensing revenue, but Nintendo’s basically going to get about a third of that,” said Yuji Nakamura, a Bloomberg tech reporter based in Tokyo, Japan.

On July 22, Nintendo issued a press release announcing that the revenue gained from Pokémon GO will be “limited” and, as a result, adjustments to their financial forecast through March 31, 2017 will not be made.

Nintendo Stock Shows Steady Decline

Investors' Ignorance Blamed for Nintendo Stock Plummet
Image: Bloomberg

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2 COMMENTS

  1. Yeah, but Nintendo still owns the IP as much as GameFreak and Creatures. The Pokemon Company is joint venture, but the latter two are “second-party” which means they’re separate companies who’re contracted to only make stuff for Nintendo; which means they’re functionally first-party.

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