Nintendo has been riding the swell of success since the release of Pokémon Go, with its market value almost doubling, having reached a $42 billion valuation just two weeks after the game launched on July 6. But, while Nintendo’s name is the brand most readily associated with Pokémon Go, it didn’t develop the game itself. Instead, the game was actually developed by Niantic, the same company behind the Ingress game that used to be part of Google. This realization, along with Nintendo’s announcement that the Pokémon Go app would have limited impact on its profits, has seen its share price tumble.
While the game has surpassed expectations by a huge degree, having already amassed more than 50 million downloads worldwide on the Play Store alone, with that number increasing with each new territory that Pokémon Go launches in, Nintendo only receives the licensing fees that were previously agreed upon with Niantic.
Nintendo has, along with Google, and The Pokemon Company Group, invested around $30 million into Niantic, with an additional $10 million to be invested as and when Niantic meets certain targets.
Despite the shares slipping by 17.7%, Nintendos shares are still 60% higher than they were before Pokémon Go launched on July 6th. So it isn’t all bad news for Nintendo, and some analysts believe the announcement caused some investors to overreact. Unless you’re a shareholder, though, today’s news really shouldn’t affect your ability to catch that pesky Pikachu.