Nintendo Crashes After Company Admits Pokémon GO Has Limited Impact

Shares of Tokyo-listed Nintendo Co., Ltd NTDOY plunged more than 17 percent during Monday's trading session after the company released a statement regarding the financial impact the widely-popular Pokémon Go mobile game will have on its consolidated financial forecast.

Nintendo noted the mobile game is being developed and distributed by Niantic and The Pokémon Company holds the ownership rights to the Pokémon franchise. Although Nintendo itself owns a 32 percent stake in The Pokémon Company, the income from the mobile game that Nintendo will derive is "limited."

Related Link: Winners And Losers From Pokémon GO

Nintendo added it will not be making any changes to its financial forecast for the period ending March 31, 2017. If the company sees any changes to its outlook, then it will make a "timely disclosure" when appropriate to do so.

Analysts Made the Right Call

Nintendo's announcement is consistent with some of the commentary from Wall Street analysts.

Jay Defibaugh, an analyst at CLSA, cautioned investors in a note dated July 24 that Nintendo's direct share of the profit from the Pokemon Go game is "surprisingly" little.

Similarly, Macquarie's David Gibson estimated that Nintendo will only receive around 20 percent of the game's profits either directly or through its ownership stake in Pokemon Company.