Days after Nintendo’s stock market value hit a record high due to the success of Pokémon Go, shares have plummeted after the company reminded new investors that it had no role in the game’s development, and will not see significant profits from its release.
The revelation led to Nintendo’s stock losing $6.7 billion in value over the weekend as opportunistic investors shed their recently purchased shares.
Nintendo’s recent market surge was due in large part to the strength of the Pokémon brand, as investors apparently didn’t even bother launching the Pokémon Go app for themselves before sinking millions into Nintendo stock over the past week. Pokémon Go‘s initial loading screens make no mention of Nintendo, and the company’s distant relationship with the Pokémon brand is clearly stated across multiple freely searchable online resources.
Though its game consoles are closely tied to the Pokémon brand, Nintendo actually shares Pokémon’s copyright with franchise creators Game Freak and Creatures Inc. Together, the companies profit from the brand via The Pokémon Company, a Japanese firm that controls marketing and licensing. Nintendo currently owns a 32 percent stake in The Pokémon Company.
Over the past week, investors failed to realize that The Pokémon Company — not Nintendo — was responsible for funding, licensing, and greenlighting Pokémon Go, entitling it to the bulk of profits. Nintendo noted in a wake-up call to investors over the weekend that it will see very little of the revenue generated by Pokémon Go reflected in its financial forecast.
“[Nintendo] owns 32 percent of the voting power of The Pokémon Company,” Nintendo explained in its letter to investors. “The Pokémon Company is [Nintendo’s] affiliated company, accounted for by using the equity method. Because of this accounting scheme, the income reflected on [Nintendo’s] consolidated business results is limited.”
The letter continues: “Taking the current situation into consideration, [Nintendo] is not modifying the consolidated financial forecast for now. [Nintendo] will make a timely disclosure when [Nintendo] needs to modify its financial forecasts.”
- Pokémon Scarlet and Violet: release date, trailers, gameplay, and more
- How to pre-order the Nintendo Switch OLED Splatoon 3 model
- PlayStation Stars loyalty program will net you rewards for playing PS5 games
- Nintendo Switch Online adds another classic Pokémon spinoff game
- Pokémon Go studio cancels four titles, including its Transformers game