Pokemon Go, which scored an unprecedented hit with gamers is not likely to benefit Nintendo.
Nintendo also has just 32 per cent of the voting power of the Pokemon Company, an affiliate company which holds the rights to Pokemon and will receive a licensing fee and compensation for the development of the smartphone application. Bets that shares of videogame maker Nintendo will fall have quadrupled in the past week following a major rally sparked by the wild popularity of its Pokemon Go smartphone game.
Since its launch, Pokemon Go had added almost $12 billion to Nintendo’s market value, meaning the fall though sizable was not a total disaster for the company. The sudden drop removed $708 billion yen in the market value. And Nintendo has insisted it’s only keeping its current forecast intact “for now”, suggesting a possible increase could be forthcoming as Pokemon Go sustains its momentum as it launches in new regions. Although Nintendo is a shareholder of the said game, it only has an “economic effective stake” of 13 percent according to Macquarie Securities analyst David Gibson, Bloomberg reported.
The announcement on Pokemon Go has stoked suspicions of wider problems at the company. Even with Mewtwo as allegedly the most powerful Pokemon, Mewtwo is still not helping Nintendo in making money.
Nintendo is due to post earnings for the first quarter tomorrow.
Its shares dropped 17.7pc, the maximum allowed in the Nikkei index -but despite this they are still 60pc higher than before the game’s release.
Another feature that might make it in the next “Pokemon Go” update is Pokemon breeding, although Hanke said that it is something that the Niantic are still discussing whether they should include it in the game or not. The company is forecasting full-year profit of 35 billion yen (440 million Australian dollars, $320 million), more than double last year’s 16.5 billion yen (210 million Australian dollars).