Nintendo shares plunge 16 pct on Pokemon Go warning
AFP
July 25, 2016 08:55 MYT
July 25, 2016 08:55 MYT
People hold their mobile phones while standing in the street playing Nintendo's Pokemon Go game at Akihabara shopping district in Tokyo on July 22, 2016. - AFP Photo
Nintendo shares dived Monday after it warned that the Pokemon Go mania sweeping the world would not translate into bumper profits for the Japanese videogame giant.
The stock plunged about 16 percent to 23,720 yen in early trading after it more than doubled in a huge rally following the game's release earlier this month -- making it more valuable than Sony at one stage.
Markets cheered the game's global success as a good sign for Nintendo's nascent move into the mobile games market.
But the Kyoto-based company warned in a brief statement Friday evening that the impact of Pokemon Go's success on its bottom line would be "limited".
Nintendo is the creator of the Pokemon franchise but the game was developed by US-based Niantic, with the Japanese firm's affiliate, Pokemon Company, on track to receive licensing fees for the game.
Nintendo owns about one-third of the Pokemon Company.
It also stands to make money from a device to be used with the application called "Pokemon Go Plus" but "the income reflected on (Nintendo's) consolidated business results is limited", it said.
"Taking the current situation into consideration, the company is not modifying the consolidated financial forecast for now," the statement said.
Since its launch three weeks ago, the game for mobile gadgets has sparked a worldwide frenzy among users who have taken to the streets with their smartphones.
The free app uses satellite locations, graphics and camera capabilities to overlay cartoon monsters on real-world settings, challenging players to capture and train the creatures for battles.