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  • 07.25.16

Nintendo share price plummets 17% after investors find out the company doesn’t actually make Pokémon Go

You would think that information would be something investors would have looked into, considering their rush to buy shares in Nintendo after the launch of the hit mobile game last month. That rush saw the company’s share price surge by as much as 55%. However, the company’s share price is currently down over 17% from its recent Pokémon Go-inspire highs after it put out a statement noting that the success of the game will have a limited impact on its financials due to the fact that it doesn’t actually make the game nor own the full rights to Pokémon, reports the Guardian. From the statement:

This mobile game application is developed and distributed by Niantic, Inc. The Pokémon Company, which is an affiliated company of Nintendo Co., Ltd. (the “Company”), holds the ownership rights to Pokémon. 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% 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.

MG