Nintendo Deflates Investor Hope In ‘Pokemon Go,’ Stocks Plummet

When investors saw just how successful “Pokemon Go" was becoming, they flocked to buy stocks from Nintendo, which catapulted the company’s share prices to the heavens. This made the Japanese video game enterprise more valuable than it has been in a decade. Unfortunately, Nintendo recently released a paper declaring that investors shouldn’t expect too much from “Pokemon Go” profits. Immediately following the statement, the company’s stocks plummeted.

Nintendo lost over $6.7 billion on the first day after the announcement and the only reason it didn’t lose more was because of the limitations imposed by the market, Bloomberg reports. It would seem that the Japanese company wanted to correct the perception that the app would add significantly more to its financial output than it did, which was the reason behind the $17.6 billion addition to the company’s value by Friday last week.

Although the brand is known as the publisher of “Pokemon” games since the classics, Nintendo is not the majority owner of the app. It shares ownership with “Niantic Labs,” the publisher of the game, and the “Pokemon Company,” which owns the IP of everything related to “Pokemon.” Technically speaking, Nintendo only owns about 13 percent in the app; a fact that the investors apparently did not know.

This isn’t all Nintendo’s fault, as The Verge pointed out, since none of the things that they published were secret. Aside from the fact that the game company doesn’t have its logo plastered on the app, “Niantic Labs” has always been the owner of the initiative since the very beginning. People simply assumed that “Pokemon Go” was Nintendo’s game just because it had the word “Pokemon” attached to it.

Then again, Reuters points out that the success of “Pokemon Go” does highlight the massive potential for Nintendo to have its own mobile game and see the same or even bigger success than what “Niantic Labs” is seeing at the moment. So it’s possible that investors of the company could see a boost in Nintendo’s actual profit margin with their own app down the road.