- Pokemon Go Craze Hits New York City on July 25, 2016 in New York City.
(Photo: Mike Coppola/Getty Images)
After enjoying a record high stock market value for the successful "Pokemon Go" game, Nintendo shares dropped after new investors were informed that the game company did not participate in the game development.
The hit "Pokemon Go" mobile game is actually a collaborative effort between Niantic Games and Nintendo. Considering its minimal role in the creation of "Pokemon Go," Nintendo will not actually enjoy huge profits from its release and updates, which disappointed many investors.
Yahoo noted that Nintendo's stock suffered losses valued at around $6.7 billion recently after Nintendo investors let go of their recently purchased shares.
IGN stated that Nintendo shares plummeted 17.7 percent after the company confirmed that the success of the "Pokemon Go" game will not mean giant profits for them.
Nintendo said in a stock filing that they took the current "Pokemon Go" situation into consideration and will not modify the consolidated financial forecast at present.
Nintendo also referred to the Pokemon Go Plus device, saying that it will be produced and distributed by the company. The portable device is said to be scheduled for launch.
"Pokemon Go" released earlier in July 2016 and Nintendo's profits have grown to more than double in value. The "Pokemon Go" mobile game was actually developed by Niantic Games, under license from Nintendo, which means that it will be Niantic that will rake in the huge profits.
Apparently, "Pokemon Go" investors did little research before buying Nintendo stock and merely expected to share in the game's popularity and momentum.
Although Nintendo game consoles are closely related to the Pokemon brand, the company actually shares the brand's copyright with franchise creators Game Freak and Creatures Inc. The companies altogether gain from The Company, which is responsible for marketing and licensing.
At present, Nintendo owns 32 percent of The Pokemon Company. It is actually The Pokemon Company that is in charge of funding, licensing and approving the "Pokemon Go" game, which entitles it to most of the profits as well.
Nintendo explained that because of the current equity method accounting scheme, the income shown on Nintendo's consolidated business results is limited.
In the meantime, the Pokemon Go continues to release in various countries around the world as its popularity grows. The game creators are planning to expand the game, which includes the release of the special mobile device.
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