Stocks: Nintendo Curbs Enthusiasm -- WSJ
July 26 2016 - 3:04AM
Dow Jones News
Videogame maker warns profit boost from 'Pokémon Go' is likely
to be limited
By Megumi Fujikawa
TOKYO -- After soaring over the previous two weeks, shares in
Nintendo Co. plunged Monday following a company warning that the
smash-hit smartphone game "Pokémon Go" would make a limited
contribution to its earnings.
Nintendo shares ended down by the maximum permitted amount,
Yen5,000, at Yen23,220 ($218.73) -- a decline of 18%. The company's
share price had doubled since "Pokémon Go" was released in the U.S.
and other markets this month.
Shares of McDonald's Corp.'s Japan unit, which announced a
"Pokémon Go" tie-up last week, also reversed direction Monday,
closing 12% lower at Yen3,200.
Based on a Nintendo franchise, "Pokémon Go" is the Japanese
videogame maker's first mobile-gaming hit. But it was developed by
Tokyo-based Pokémon Co., in which Nintendo owns a 32% stake, and
San Francisco-based Niantic Inc. Nintendo and Pokémon Co. both own
undisclosed stakes in Niantic.
Kyoto-based Nintendo said after the market closed Friday that it
had already factored in any profits from sales of its "Pokémon Go
Plus" wearable device into its current forecast of Yen35 billion
for the fiscal year ending in March.
The company is scheduled to report its April-June results
Wednesday.
Tsutomu Yamada, market analyst at kabu.com Securities, cautioned
investors not to be disheartened by the fall in Nintendo's share
price, saying the success of "Pokémon Go" would lead to wins for
the company, such as sales of new Pokémon titles on Nintendo 3DS
planned for November.
"Nintendo is coming out of its recent downturn," he said.
Similarly, McDonald's Holdings Co. (Japan) Ltd., whose shares
got a big lift from its tie-up with "Pokémon Go," is still expected
to benefit. The company's sales had suffered from recent
food-safety problems.
"We think that it is families that have been put off by a string
of scandals at McDonald's, and this customer group is also the
target market for 'Pokémon Go,'" said Ryozo Minagawa, an analyst at
Nomura Securities.
Pokémon Go launched in Japan on Friday and was released in Hong
Kong on Monday. The game remains the top free app in Japan on both
Apple Inc.'s App Store and Google Play for Android smartphones.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
July 26, 2016 02:49 ET (06:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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