Pokémon GO has been an almost unbelievable success early on, breaking mobile download and revenue records and dominating social media. The game’s incredibly strong reception caused Nintendo’s stock to skyrocket, doubling the company’s value in two weeks. However, Nintendo’s stock has taken a couple of big hits since then, and yesterday it dropped by nearly 18%, marking the sharpest single-day decline for the company since 1990.

Nintendo recently announced that
Pokémon GO‘s success doesn’t change their financial forecast for the fiscal year, as “the income reflected on the Company’s consolidated business results is limited.” Many of Nintendo’s investors likely assumed that the mobile game’s unprecedented success would translate into improved profits for Nintendo in the short-term, but Nintendo only has a 32% stake in The Pokémon Company, and developer Niantic Labs has several other partners. Analyst David Gibson estimates that Nintendo keeps around 10% to 13% of Pokémon GO‘s profits, and those earnings were already factored into their financial projections for the year.

Source: Bloomberg

Our Verdict

Ben Lamoreux


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