Nintendo’s investors had a bombshell dropped on them Friday, as the company issued a notice that its revenues would not be majorly impacted by Pokémon Go.
The project was developed by Niantic under license from The Pokémon Company.
On July 11, share value jumped 24.5 percent from a close on July 8 of $153.40 to $191.02 at close on July 11. Gains mounted to a high close on July 19 of $299.53.
Following Nintendo’s notice, share price has plummeted 17.72 percent to $219.87. Stocks are still trading at 42.7 percent higher than it did before the Pokémon Go launch.
Our Opinion
Just because Nintendo does not own the company nor made the game does not mean that they cannot benefit from the success. A company could choice not to consider an increase in profits until the new game stabilizes and reach an equilibrium with hardcore fans. currently, Pokemon Go has a pop-culture following and it's trendy to play. once mainstream popularity dies down and true Pokemon fans are left then they might count the increase in revenues. It is better to downplay revenues especially when they are uncertain than to mislead investors when the hot new thing does not turn a profit.
Also, with the new interest in the Pokemon franchise, Nintendo can take the next steps to make a first party game and ride the wave of popularity.
The project was developed by Niantic under license from The Pokémon Company.
On July 11, share value jumped 24.5 percent from a close on July 8 of $153.40 to $191.02 at close on July 11. Gains mounted to a high close on July 19 of $299.53.
Following Nintendo’s notice, share price has plummeted 17.72 percent to $219.87. Stocks are still trading at 42.7 percent higher than it did before the Pokémon Go launch.
Our Opinion
Just because Nintendo does not own the company nor made the game does not mean that they cannot benefit from the success. A company could choice not to consider an increase in profits until the new game stabilizes and reach an equilibrium with hardcore fans. currently, Pokemon Go has a pop-culture following and it's trendy to play. once mainstream popularity dies down and true Pokemon fans are left then they might count the increase in revenues. It is better to downplay revenues especially when they are uncertain than to mislead investors when the hot new thing does not turn a profit.
Also, with the new interest in the Pokemon franchise, Nintendo can take the next steps to make a first party game and ride the wave of popularity.
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