Nintendo shares plunge, company says Pokemon GO’s earnings impact limited

Why? Nintendo isn’t the only company with a stake in the hit augmented reality game, and it might be earning a smaller share of game profits than investors had expected. It said that it was leaving its profits forecast for the current financial year to March 2017 unchanged. This is because the company’s share prices have been on the rise and it does not appear to be slowing down.

The correction comes after Pokemon Go’s release nearly doubled Nintendo’s stock through Friday’s close, adding $17.6 billion in market capitalization.

Pokemon Go isn’t developed or distributed by Nintendo, but by Niantic, a spinoff from Alphabet – Google’s parent company. According to John Hanke, CEO of Niantic Labs, these team leaders might pop-up in the game to offer advice. Pretty mad that a company has to basically tell these people to stop investing because they’d made a huge mistake or just hadn’t bothered to check.

“The gaming company is due to report first-quarter results this week and said it did not plan to revise its earnings outlook for now”. Pokemon itself is owned by The Pokemon Company, of which Nintendo only owns 32 percent, and The Pokemon gets a licensing fee and “compensation for collaboration” in developing Pokemon Go.

All of this would have been taken into account when Nintendo laid out on April 27 its forecast for the 12 months to March 31, 2017.

Despite this Nintendo are still doing better than prior to Pokémon Go, with shares doubling in value since the beginning of July.

Nintendo’s market capitalisation reached 4.5 trillion yen (£32bn) at the start of last week, leading it to briefly overtake its old rival Sony.