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Nintendo Co., Ltd (ADR)(OTCMKTS:NTDOY) shares had a significant rise in value since the game was launched. However, Nintendo released a closing statement last Friday revealing that it will experience a limited bottom-line impact because it owns only 32% of the firm that actually made Pokemon Go. The statement also revealed that the revenue Nintendo collects from the game is included in the company’s current projections.
The announcement caused the firm’s shares to plummet by as much as 17% coming down from the impressive high of $193 per share that was influenced by the rising popularity of the game. The success caused Nintendo’s net worth to go up. It turns out that Pokemon Go was developed by Niantic Labs and was more of pa collaboration between the two firms. This revelation caused a negative reaction from investors leading to a 17% decline in the value of the shares which is equivalent to $6.4 billion.
A week ago there was a lot of excitement over the fact that Nintendo’s capitalization surpassed Sony. Now it is clear that the boost was because Nintendo investors had misguided information. The statement released by the firm on Friday did not include any new information. Analysts claim that there were hints about the ownership of the game. Pokemon Go did not have the Nintendo logo anywhere in the game. However, most people did not take notice.
There is still hope for Nintendo investors because the company is working on a mobile initiative that will focus on launching game titles based on Fire Emblem and Animal Crossing Franchises. It will team up with DeNA for the initiative and the titles involved are highly likely to generate serious earnings for the company. Pokemon Go was recently launched in China and it has already taken off like a wildfire as fans rush to savor the experience.