Nintendo shares plummeted Monday, following an announcement that the smash hit augmented reality game Pokémon Go would not have a significant effect on its bottom line.
The Japanese company’s stock fell close to 18 percent Monday, the most allowed on the Tokyo exchange, according to Bloomberg. That came after Nintendo put out a short press release Friday acknowledging that Pokémon Go’s success will have a limited impact on the company’s bottom line, and it is not planning to adjust its “consolidated financial forecast.”
It is unclear why the stock dropped so drastically. The Verge argues that bullish investors did not realize Nintendo does not make or own the game. The game was created by Google spinout Niantic in partnership with Nintendo and The Pokémon Co. Nintendo said in its announcement Friday it has a 32 percent stake in The Pokémon Co. Nintendo has a 13 percent “effective economic stake” in Pokémon Go, according to Bloomberg.
Nintendo’s stock began ascending soon after the release of Pokémon Go on July 6, doubling the company’s market cap to a high of $42.5 billion July 19. Nintendo’s stock came back down to earth the next day following news of server capacity problems and a delay of the game’s launch in Japan. The delay only turned out to be two days, as Pokémon Go launched in Japan on Friday.
McDonald’s is the first company to pay to sponsor PokéGyms where players can battle with their respective Pokémon. Approximately 3,000 McDonald’s locations in Japan are gyms. The sponsored PokéGyms could attract customers to retailers and potentially drive sales.
Businesses have been finding all kinds of ways to cash in on the Pokémon Go craze, whether it’s Lyft offering discounted rides to “PokéStops” or T-Mobile giving free data to subscribers playing Pokémon Go. Even presidential nominee Hillary Clinton is using the game to help attract young voters.
Despite the big drop Monday, Nintendo’s stock is still up more than 65 percent since Pokémon Go’s launch. Today its market cap stands at more than $31 billion, up approximately $10 billion since the game came out.
