Nintendo shares plummet because it can’t make Pokemon Go

Nintendo_former_headquarter_plate_KyotoNintendo’s share price crashed by 17 percent after investors worked out that the former maker of playing cards didn’t really  make Pokémon Go.

Since the game launched in mid-July, Nintendo’s share price has more than doubled but  Nintendo admitted it neither makes, nor owns, Pokémon Go and the fact was never hidden by any of the companies involved.

Pokémon Go “is developed and distributed by Niantic, Inc”, an independent company spun off from Google in August 2015. Both Google and Nintendo hold stakes in Niantic. It added that Nintendo owns 32% of the voting power within the Pokémon Company, which itself will receive “a licensing fee and compensation for collaboration in development and operations”.

Nintendo concluded, “the income reflected on the company’s consolidated business results is limited”. It will make more direct income from Pokémon Go Plus, a peripheral due to be released this summer which will allow partial interaction with the game without the need to turn on the phone, but that income too is already reflected in the company’s predictions for the 2016–17 financial year. So, in other words, Nintendo’s not getting rich from Pokémon Go .

Even if Nintendo doesn’t take much cash home from Pokémon Go, the game’s success could convince the company to put more efforts into its home-grown smartphone development. If it does, that could signal a longer-term reversal in the company’s fortunes than any one game could ever provide.