Why are Nintendo shares falling despite the monstrous success of Pokemon Go?

Rank: Monkey | 42

Imagine my surprise when I saw in a Reuters article that Nintendo's shares, despite the craze of Pokemon Go, tumbled as much as 18% on a single day. According to the article:

"Shares of Nintendo Co (7974.T) tumbled as much as 18 percent early on Monday after the company said smash-hit mobile game Pokemon GO would have only a limited impact on its earnings.

Nintendo said after the market closed on Friday that it had already factored in anticipated revenues from its Pokemon GO Plus device - an accessory worn on the wrist to alert players of nearby monsters to catch - and that it had no plans to revise its annual earnings forecasts for now."

Naturally, following the success of the game, there has been massive buying of Nintendo shares , and the stock indeed has grown by 60% compared to levels before the game launch. However, despite that fact, during intra-day trading, the shares slipped by 4965 yen,just shy of the 5000 yen limit per day.

So what do you think monkeys? Is this a temporary slide, or is this craze temporary? More importantly, is this one game enough to turn Nintendo's business around?

Comments (10)

 
7/28/16

Nintendo has a small stake in Niantic, the game's developer.

Therefore only a small piece of the profits will belong to Nintendo.

As such, the huge surge in share price has been a mistake by investors who overlooked how much % of the game Nintendo owns in the first place.

 
7/28/16

Was the size of their stake publicly available information? If so, that's a pretty laughably large example of market inefficiency

 
7/28/16

Yes, it was public info. Nomura ER analysts pointed this out as early as July 11th. People didn't react until management reiterated the point on July 25th.

http://www.forbes.com/sites/steveschaefer/2016/07/...

 
7/30/16

Except that it was corrected fairly quickly.

"Elections are a futures market for stolen property"

 
7/28/16

Popularity doesn't necessarily equate to income. Plus, the game is fucking terrible from a game perspective and not a popular thing everyone is doing perspective. I'm a closet nerd and play more than enough video games, including most of the main series pokemon titles. Pokemon Go has terrible servers, terrible lag, freezes or crashes with regularity, broken features, missing features that define the series, and just generally sucks. Tried it for a week and it's neither fun nor interesting. If it isn't DRAMATICALLY fixed/changed, I expect the user base to drop off.

 
7/30/16
CRE:

Popularity doesn't necessarily equate to income. Plus, the game is fucking terrible from a game perspective and not a popular thing everyone is doing perspective. I'm a closet nerd and play more than enough video games, including most of the main series pokemon titles. Pokemon Go has terrible servers, terrible lag, freezes or crashes with regularity, broken features, missing features that define the series, and just generally sucks. Tried it for a week and it's neither fun nor interesting. If it isn't DRAMATICALLY fixed/changed, I expect the user base to drop off.

This happens with a lot of mass-popular games. I do my fair share of competitive gaming, and agree with this. All it takes is time, but eventually you will have a loyal fan base, and people will keep playing it.

The problem with Pokemon Go is marketing it as a platform to profit.

 
7/30/16

''Efficient markets'' ahahhahah.

 
7/30/16

One year from now will the same amount of people still be playing Pokemon Go!? What about two months from now? Never be a sucker and get caught up in hype. Especially if that hype doesn't generate sustainable long-term revenue.

Please reference the stock charts of GoPro and Fitbit for examples. Some other fads in the past couple years include SodaStream, and Keurig Green Mountain before they got acquired, and Crocs.

 
7/30/16

Because the idiots who bought Nintendo stock thinking Pokemon Go is the next Snapchat or someshit finally realized it's a fad produced by a different company Nintendo barely has a stake in.

 
8/2/16

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