Nintendo’s share price crashes by nearly a fifth despite success of Pokemon Go
It was the Japanese electronic firm’s biggest one-day slump since October 1990, with its value falling by £4.9billion
NINTENDO’S share price crashed by nearly a fifth yesterday — as it admitted its hit Pokemon Go app will have a “limited” impact on profits.
It was the Japanese games and electronic firm’s biggest one-day slump since October 1990, with its value falling by £4.9billion.
The 17.72 per cent plunge left its share price down by 5,000 yen (£36), the maximum daily amount allowed on the Tokyo stock market.
Its fall came on the heels of an even more spectacular rise, as its value doubled in the fortnight after it launched its app on July 6.
The game — in which players move around in the real world searching for virtual Pokemon characters — was developed by US firm NIANTIC.
Nintendo said yesterday its own profits from licensing and fees would be “limited”.
It added ahead of its financial results tomorrow: “Taking the current situation into consideration, the company is not modifying the consolidated financial forecast for now.”
The share price closed at 23,220 yen (£167.18) - compared to 14,490 yen (£104.33) the day before the app’s launch.
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Some analysts said the price plunge was a classic case of overexcitement followed by a reality check.
Neil Wilson, analyst at ETX CAPITAL, said yesterday: “Shares in Nintendo rose for the same reason as the tulip mania of Holland (in the 17th century) — popular delusions and the madness of crowds.
“This bubble has been pricked but plenty of investors will be feeling the pain.”
He added: “The stock is still up around 50 per cent from its pre-Pokemon Go price, which is probably a better reflection of what is still a game changer for Nintendo as it starts to tap the mobile gaming market.”
But others suggested the Japanese giant was playing down the impact of the app.
David Gibson, a senior analyst at MACQUARIE SECURITIES GROUP, said: “I believe that Pokemon Go will be material in the company’s earnings, given the current trends for the game.”
He added that for Nintendo to say “the impact of its stake in the Pokemon Company is limited is misleading”.
Other companies whose fortunes are linked to Nintendo’s and the Pokemon app also suffered yesterday.
IMAGICA ROBOT, maker of a Pokemon cartoon series, saw its share price fall 23 per cent after it close to tripled in the weeks after the app’s release.