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Nintendo to investors: Pokémon Go won't make money come

Facts whack share price, taking the shine off Tokyo launch

By Richard Chirgwin, 25 Jul 2016

Investors who bid up Nintendo have punished the company for pointing out the Pokémon Go app is not going to create a cash deluge.

Announcing the official availability of Pokémon Go in its home market (in partnership with McDonald's, so you can guess where the happiest hunting grounds will be), Nintendo added that it only owns 32 per cent of The Pokémon Company, so the rivers of gold will mostly flow elsewhere.

While Nintendo will make money from the Pokémon Go-themed peripherals it plans to make, these are “already factored into the Company's consolidated earnings forecast” it announced in April.

The colossal success of Pokémon Go saw investors bid up Nintendo's share price by around US$17.6 billion, nearly doubling the company's market capitalisation.

Their disappointment will probably be as deep as their enthusiasm was high, but not all in one hit. Bloomberg notes that the Tokyo Stock Exchange limits how far a company's price can fall in one session, so today's 17 per cent fall so far can at worst reach 18 per cent.

That report adds that investors are showing their usual rational approach to life: as well as hammering Nintendo, the game's launch partner in Japan, McDonald's Holdings, has taken an 11 per cent hit. Hosiden, which speculation had identified as the electronic components supplier for Pokémon Go Plus, took at 10 per cent hit. ®

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