Company’s shares collapse on revelation it has little exposure to the hit game.
Pokemon No Go For Nintendo:
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How embarrassing must have it have been for Nintendo brass to announce late Friday that the company is going to see only limited returns from the Pokemon Go phenomenon?
In a statement issued after markets closed, the venerable Japanese game company admitted its share of the mobile app’s bonanza wouldn’t be as big as investors were hoping.
Nintendo is a shareholder in developer Niantic and Pokemon Co., the game’s intellectual property holder, but one analyst estimates the company’s total economic interest in Pokemon Go comes to just 13 per cent.
Nintendo shares nosedived 18 per cent on Monday in Tokyo as a result, after more than doubling on the rise of the game. Apple has separately announced that Pokemon Go was the most downloaded iPhone app in its first week ever.
Suddenly, Nintendo is coming back to earth, which is where it has been for years – to put it charitably. The company has done very little right over the past decade, since the Wii game console became a hit back in 2006.
Despite that initial success, Nintendo misread the gaming market and saw the Wii quickly fade in popularity. Its follow-up, the Wii U, also flopped, while mobile phones and apps ate into its handheld console business.
Nintendo finally relented last year and announced plans to get into mobile games. Its first effort, Miitomo, saw a lot of downloads but – like the Wii – quickly faded as gamers didn’t really get it. Its next two mobile games will be free to play, according to reports.
For a company mired in old tradition, it must have been embarrassing for Nintendo executives to admit that they had little to do with the biggest mobile phenomenon this side of Snapchat.
The future is looking a little less bleak for the company now that it’s finally moving into mobile, and with a new home console apparently on the way, but for the time being Nintendo still hasn’t had a bona fide hit in a long time. Pokemon Go is, unfortunately for the company, more like Pokemon No.