Pokemon Go May not Save Nintendo

Pokemon Go May not Save Nintendo

Despite the augmented reality game Pokemon Go’s huge popularity, Nintendo Co which co-owns the company, still had hundreds of million dollar losses in the first fiscal quarter.

Niantic Lab, which stems from Google before the web search giant morphed into Alphabet Inc, is the creator of the smartphone game. But Nintendo owns 33 percent of Pokemon Go company. The latter emerged to enable investors better manage the licensing of the Pokemon monsters.

According to a report released Wednesday, Nintendo lost $232 million in the first quarter which ended in June. Additionally, its profit was negative and missed analysts’ expectations of $6.4 million.

Last year in the same quarter, Nintendo had made an $8,27 million profit. However, this year, first quarter sales were also disappointing. According to the earnings report, sales plunged 31 percent to $586 million from a year prior.

The Kyoto-based company, however, has warned shareholders that the Pokemon Go craze would be short-lived and have a limited impact on its stock. Much of the cash comes from licensing fees and various compensation for the AR app.

Nintendo manages these revenues through its affiliate, The Pokemon Go Co. Last week, the company said that it is not relying on licensing fees to boost its income.

Bad News for Pokemon Go Players

Nevertheless, the Nintendo had disappointing news for its fans too, not just investors. On Wednesday, it announced that the much anticipated Pokemon Go Plus will be available in November.

Pokemon Go Plus is a gizmo that helps Pokemon Go trainers spot Pokemons faster than the app itself. The device maker originally said that it would roll it out in September.

Analysts on the other hand noted that Niantic released the smartphone app after the end of Nintendo’s first quarter. So the game couldn’t have a major impact on the Japanese company’s income. But investors had hoped that the advertising put into Pokemon Go before release could revive Nintendo’s sales for related products.

After the game’s launch, Nintendo’s shares were extremely volatile as investors weren’t quite sure whether Pokemon Go would become the big hit they have been hoping and praying for for years.

Image Source: Pixabay