It's almost as if investors didn't do their research.
After a long period of gains in the wake of Pokemon Go's unprecedented success, Nintendo's share price has fallen sharply after the platform holder issued a statement clarifying the game's ownership and warning that it might not see the direct financial gains that many seem to be expecting.
This mobile game application is developed and distributed by Niantic, The Pokmon Company, which is an affiliated company of Nintendo, holds the ownership rights to Pokmon. The Pokmon Company is going to receive a licensing fee as well as compensation for collaboration in the development and operations of the application,” Nintendo said.
The Company owns 32 per cent of the voting power of The Pokmon Company. The Pokmon Company is the Company's affiliated company, accounted for by using the equity method. Because of this accounting scheme, the income reflected on the Company's consolidated business results is limited.
Taking the current situation into consideration, the Company is not modifying the consolidated financial forecast for now. The Company will make a timely disclosure when the Company needs to modify its financial forecasts.”
Nintendo's share price has nosedived nearly 18 per cent as a result – Tokyo stock exchange rules prevent any single day falls beyond 18 per cent.
However, even if Nintendo's direct gains from Pokemon Go are limited, the wider gains cannot be dismissed. Pokemon is suddenly the hottest property on the planet, and Nintendo is already profiting from increased 3DS and back catalogue sales. It has also opened the door to all sorts of licensing opportunities.