8 ms·

Nintendo Plunges After Saying Pokemon Go’s Impact Is Limited

34 points by hereonbusiness 10y ago

flukus 10y ago
Perfect example of how irrational the stock market can be. Billions of dollars moved around based on nothing but hype.
- em3rgent0rdr 10y ago
  Efficient, actually. Very quickly reallocates resources based on predicted future value.
  - flukus 10y ago
    The predicted future value was based on nothing but hype.
    - em3rgent0rdr 10y ago
      There are a serious amount of people users, many from a new audience. It is the first breakthrough "Augmented Reality" application, paving the way for a new type of game that everyone can enjoy. How can you definitively say it is hype or not?
    - marklgr 10y ago
      Hype is often the prospect of a huge success, but it always remains a long shot. As another comment said, you can short the stock each time there's a hype according to you and you'll often make a profit--until you don't, and you'll take a very heavy loss.
- Houshalter 10y ago
  I don't know if it's irrational. If you, or anyone else can be more rational, and predict the market's errors, you could make huge amounts of money. Predicting errors is hard though. You could have shorted Nintendo's stock after Pokemon go came out. But what if they started announcing more Pokemon games for mobile, and they were also huge successes?
  - flukus 10y ago
    > If you, or anyone else can be more rational, and predict the market's errors You can't rationally predict irrational errors. At best you could have spotted the trend early and jumped off at the right time, but that is still speculating on the degree of irrationality.
    - Houshalter 10y ago
      If you can't predict them except in hindsight, well then how can you say it's irrational? If you can't tell me whether or not investing in Nintendo stocks has negative expected value, you shouldn't call people doing it irrational.
      - flukus 10y ago
        The share price exploded from a single free game because it became a social phenomenon. There wasn't any sort of serious financial analysis going on, just hype.
        Houshalter 10y ago
        Of course there was. If a company produces the most successful mobile game of all time, and shows there is a huge interest in one of their IPs, you don't think their stock should be worth more?
      - xorcist 10y ago
        Playing against irrational moves in the market in only good in theory. "The market can stay irrational longer than you can stay solvent."
        AstralStorm 10y ago
        Except it can also exit faster and with a higher magnitude than expected.
- wrren 10y ago
  It's a pretty sensical and predictable movement though; Nintendo's first real foray into smartphone games becomes the most successful launch ever, leading the stock market to rationally believe that Nintendo will begin to really push their IP into this space and make lots of money. The irrational party is Nintendo, since they now give every indication that the success of Pokemon Go will have no effect on their strategy; the stock market has now responded and said 'we don't think Nintendo will make as much money in future as we'd previously predicted'.
  - deleted 10y ago
    [deleted]
  - ocdtrekkie 10y ago
    In fact, you're making the same mistake investors did: Believing Nintendo made a foray into smartphone games. Nintendo did not make Pokémon Go, nor is it receiving much profit from it. Niantic, Google, and Apple are all getting the lion's share of the profit, Pokémon Company gets a bit of it too, but then Nintendo only gets a fraction of that.
    - wrren 10y ago
      I may be incorrect, but Pokemon Go was released with Nintendo's approval; meaning they've dipped a toe into smartphone games.
- venomsnake 10y ago
  If a valuation change without HUGE volume increase of the trades - no billion of dollars moved.
legohead 10y ago
So is Nintendo saying that they had already calculated the success & revenue from Pokemon Go and its side effects, or are they saying that their original projections are falling short and Pokemon Go saved them?
- adzicg 10y ago
  >> It also said sales of Pokemon Go Plus, a Nintendo-produced accessory for the game, have already been factored into its existing profit forecast. It's funny how the plunge, a singular event, is now news, rather than the trend over time. sure enough, last week it was the surge, another singular event... short term view presented in market news never stops amusing.
- em3rgent0rdr 10y ago
  just trying to calm the market by providing the public investors with what they think is a more realistic projection.
hkmurakami 10y ago
As expected. Pokemon Go proves that Nintendo has tremendous potential to monetize its IP on mobile in the coming years, but investors expected short term bang for the buck. I can guarantee you Nintendo, as a tightly controlled company, could care less about this volatility.
- oatmale 10y ago
  I doubt that they don't care about dropping 17% in a single day. Losing 6 billion dollars of valuation in a single day is enough to put heads on the chopping block. It is a staggering amount of money to lose especially with the possibility of getting de-listed in the Tokyo Stock Exchange
  - umanwizard 10y ago
    They didn't lose any money or anything else of value. The wisdom-of-the-crowds appraisal of the value of their company changed. That's it. Nintendo didn't "lose" anything.
  - lokedhs 10y ago
    But they didn't lose any money. The stock valuation did. Valuation that had recently been inflated due Pokemon Go. Until Pokemon, Nintendo had been hovering at 15k since the beginning of the year. As of this writing it's at 23220. All we can take away from this is that Nintendo is still in trouble, just like they have been since before the release of Pokemon Go.
    - Aloha 10y ago
      Was it in trouble before?
      - lokedhs 10y ago
        Yes, the release of the Wii U a few years ago turned out to be a failure, and the sales of the 3DS is dropping off. They have announced their new console, the Nintendo NX, but have released next to no information about it (people don't even know if it's a console or a handheld). Here's an article about it written before Pokemon Go came out: http://www.ign.com/articles/2016/04/27/why-nintendo-is-in-real-trouble http://www.ign.com/articles/2016/04/27/why-nintendo-is-in-re...
Cookingboy 10y ago
So everyone understands that the short term downloads/revenue would NOT justify the crazy increase in market cap of Nintendo so far. However, what distressed investor is not the fact that Nintendo didn't adjust quarterly earnings, but the conservative management team refused to signal that they acknowledge the potential of their IP + mobile + new technology such as AR and change their future strategy to be beyond in-house consoles + first party games. It almost seems to me that their management is embarrassed by the meteoric success of Pokemon Go, considering that they have traditionally been very reluctant of creating contents for smartphones. Now despite their pride, the biggest value jump in their company's history was not lead by any in-house product, but literally a 3rd party American startup writing an app on a platform they traditionally ignored. I wouldn't be surprised if they are trying to downplay the impact of Pokemon Go just to save face. Investors, on the other hand, just want to see them acknowledge this potential gold mine and commit a strategy in the future.
- ben_jones 10y ago
  Yup what a stupid, stupid, company. If only they had the wisdom of Silicon Valley Startups. Then they would be a real company and be able to create innovative and disruptive products that changed the world! \s
  - Cookingboy 10y ago
    You used such strong sarcastic tone as if that statement is so ridiculous, but the truth has been that the Japanese tech industry is in the process of being MURDURED by everyone, from the Americans to the Koreans and to the Chinese. Sure Nintendo has been able to protect their moat relatively well (after losing their home console castle), but just like the overall Japanese economy, their traditional culture is really limiting how they can compete in today's cutting edge tech markets.
    - majewsky 10y ago
      I can't stop wondering if the typo in the all-caps word is intentional. :)
United857 10y ago
Nintendo did not create Pokémon Go, Ninantic did. The game's success is not an indication that Nintendo finally gets mobile. This is the key point in the article which should be stressed much more.
em3rgent0rdr 10y ago
This diagram depicts the real ownership relations for Pokemon Go: http://blogs-images.forbes.com/insertcoin/files/2016/07/pokemon-go-owns.jpg http://blogs-images.forbes.com/insertcoin/files/2016/07/poke... http://www.forbes.com/sites/insertcoin/2016/07/25/nintendo-does-not-deserve-most-of-the-credit-for-pokemon-gos-success/#330cfce933e9 http://www.forbes.com/sites/insertcoin/2016/07/25/nintendo-d...

Perfect example of how irrational the stock market can be. Billions of dollars moved around based on nothing but hype.

em3rgent0rdr 10y ago
Efficient, actually. Very quickly reallocates resources based on predicted future value.
- flukus 10y ago
  The predicted future value was based on nothing but hype.
  - em3rgent0rdr 10y ago
    There are a serious amount of people users, many from a new audience. It is the first breakthrough "Augmented Reality" application, paving the way for a new type of game that everyone can enjoy. How can you definitively say it is hype or not?
  - marklgr 10y ago
    Hype is often the prospect of a huge success, but it always remains a long shot. As another comment said, you can short the stock each time there's a hype according to you and you'll often make a profit--until you don't, and you'll take a very heavy loss.
Houshalter 10y ago
I don't know if it's irrational. If you, or anyone else can be more rational, and predict the market's errors, you could make huge amounts of money. Predicting errors is hard though. You could have shorted Nintendo's stock after Pokemon go came out. But what if they started announcing more Pokemon games for mobile, and they were also huge successes?
- flukus 10y ago
  > If you, or anyone else can be more rational, and predict the market's errors You can't rationally predict irrational errors. At best you could have spotted the trend early and jumped off at the right time, but that is still speculating on the degree of irrationality.
  - Houshalter 10y ago
    If you can't predict them except in hindsight, well then how can you say it's irrational? If you can't tell me whether or not investing in Nintendo stocks has negative expected value, you shouldn't call people doing it irrational.
    - flukus 10y ago
      The share price exploded from a single free game because it became a social phenomenon. There wasn't any sort of serious financial analysis going on, just hype.
      - Houshalter 10y ago
        Of course there was. If a company produces the most successful mobile game of all time, and shows there is a huge interest in one of their IPs, you don't think their stock should be worth more?
    - xorcist 10y ago
      Playing against irrational moves in the market in only good in theory. "The market can stay irrational longer than you can stay solvent."
      - AstralStorm 10y ago
        Except it can also exit faster and with a higher magnitude than expected.
wrren 10y ago
It's a pretty sensical and predictable movement though; Nintendo's first real foray into smartphone games becomes the most successful launch ever, leading the stock market to rationally believe that Nintendo will begin to really push their IP into this space and make lots of money. The irrational party is Nintendo, since they now give every indication that the success of Pokemon Go will have no effect on their strategy; the stock market has now responded and said 'we don't think Nintendo will make as much money in future as we'd previously predicted'.
- deleted 10y ago
  [deleted]
- ocdtrekkie 10y ago
  In fact, you're making the same mistake investors did: Believing Nintendo made a foray into smartphone games. Nintendo did not make Pokémon Go, nor is it receiving much profit from it. Niantic, Google, and Apple are all getting the lion's share of the profit, Pokémon Company gets a bit of it too, but then Nintendo only gets a fraction of that.
  - wrren 10y ago
    I may be incorrect, but Pokemon Go was released with Nintendo's approval; meaning they've dipped a toe into smartphone games.
venomsnake 10y ago
If a valuation change without HUGE volume increase of the trades - no billion of dollars moved.

So is Nintendo saying that they had already calculated the success & revenue from Pokemon Go and its side effects, or are they saying that their original projections are falling short and Pokemon Go saved them?

adzicg 10y ago
>> It also said sales of Pokemon Go Plus, a Nintendo-produced accessory for the game, have already been factored into its existing profit forecast. It's funny how the plunge, a singular event, is now news, rather than the trend over time. sure enough, last week it was the surge, another singular event... short term view presented in market news never stops amusing.
em3rgent0rdr 10y ago
just trying to calm the market by providing the public investors with what they think is a more realistic projection.

hkmurakami 10y ago

As expected. Pokemon Go proves that Nintendo has tremendous potential to monetize its IP on mobile in the coming years, but investors expected short term bang for the buck. I can guarantee you Nintendo, as a tightly controlled company, could care less about this volatility.

oatmale 10y ago
I doubt that they don't care about dropping 17% in a single day. Losing 6 billion dollars of valuation in a single day is enough to put heads on the chopping block. It is a staggering amount of money to lose especially with the possibility of getting de-listed in the Tokyo Stock Exchange
- umanwizard 10y ago
  They didn't lose any money or anything else of value. The wisdom-of-the-crowds appraisal of the value of their company changed. That's it. Nintendo didn't "lose" anything.
- lokedhs 10y ago
  But they didn't lose any money. The stock valuation did. Valuation that had recently been inflated due Pokemon Go. Until Pokemon, Nintendo had been hovering at 15k since the beginning of the year. As of this writing it's at 23220. All we can take away from this is that Nintendo is still in trouble, just like they have been since before the release of Pokemon Go.
  - Aloha 10y ago
    Was it in trouble before?
    - lokedhs 10y ago
      Yes, the release of the Wii U a few years ago turned out to be a failure, and the sales of the 3DS is dropping off. They have announced their new console, the Nintendo NX, but have released next to no information about it (people don't even know if it's a console or a handheld). Here's an article about it written before Pokemon Go came out: http://www.ign.com/articles/2016/04/27/why-nintendo-is-in-real-trouble http://www.ign.com/articles/2016/04/27/why-nintendo-is-in-re...

Cookingboy 10y ago

So everyone understands that the short term downloads/revenue would NOT justify the crazy increase in market cap of Nintendo so far. However, what distressed investor is not the fact that Nintendo didn't adjust quarterly earnings, but the conservative management team refused to signal that they acknowledge the potential of their IP + mobile + new technology such as AR and change their future strategy to be beyond in-house consoles + first party games. It almost seems to me that their management is embarrassed by the meteoric success of Pokemon Go, considering that they have traditionally been very reluctant of creating contents for smartphones. Now despite their pride, the biggest value jump in their company's history was not lead by any in-house product, but literally a 3rd party American startup writing an app on a platform they traditionally ignored. I wouldn't be surprised if they are trying to downplay the impact of Pokemon Go just to save face. Investors, on the other hand, just want to see them acknowledge this potential gold mine and commit a strategy in the future.

ben_jones 10y ago
Yup what a stupid, stupid, company. If only they had the wisdom of Silicon Valley Startups. Then they would be a real company and be able to create innovative and disruptive products that changed the world! \s
- Cookingboy 10y ago
  You used such strong sarcastic tone as if that statement is so ridiculous, but the truth has been that the Japanese tech industry is in the process of being MURDURED by everyone, from the Americans to the Koreans and to the Chinese. Sure Nintendo has been able to protect their moat relatively well (after losing their home console castle), but just like the overall Japanese economy, their traditional culture is really limiting how they can compete in today's cutting edge tech markets.
  - majewsky 10y ago
    I can't stop wondering if the typo in the all-caps word is intentional. :)

United857 10y ago

Nintendo did not create Pokémon Go, Ninantic did. The game's success is not an indication that Nintendo finally gets mobile. This is the key point in the article which should be stressed much more.

em3rgent0rdr 10y ago

This diagram depicts the real ownership relations for Pokemon Go: http://blogs-images.forbes.com/insertcoin/files/2016/07/pokemon-go-owns.jpg http://blogs-images.forbes.com/insertcoin/files/2016/07/poke... http://www.forbes.com/sites/insertcoin/2016/07/25/nintendo-does-not-deserve-most-of-the-credit-for-pokemon-gos-success/#330cfce933e9 http://www.forbes.com/sites/insertcoin/2016/07/25/nintendo-d...