After Nintendo warned that Pokémon GO‘s success would not have an immediate impact on profit, the company’s share price has dramatically plummeted in reaction.
The share price had more than doubled in value since Niantic’s augmented reality app launched in early July, but have now fallen by 17.7 percent which has been recognised as the sharpest decline since October 1990.
The share price was down by 5,000 yen which is the maximum daily limit that is allowed on the stock market. Nintendo’s share price are still up by 60 percent overall, but there are concerns that the decline will continue over the coming week.
“This mobile game application is developed and distributed by Niantic, Inc. The Pokémon Company, which is an affiliated company of Nintendo Co., Ltd., holds the ownership rights to Pokémon,” Nintendo had clarified. “The Pokémon Company is going to receive a licensing fee as well as compensation for collaboration in the development and operations of the application.
“The Company owns 32 percent of the voting power of The Pokémon Company. The Pokémon 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.”
