NEWS
NEWS
NEWS
Pokemon Go too late to save Nintendo from major Q1 loss
Nintendo Co Ltd’s share prices took a hit earlier this week after it sent a letter to investors clarifying its relationship to Niantic Inc’s phenomenally successful mobile game, Pokemon Go, and now it looks like the company may have more trouble ahead after revealing its worst Q1 results in five years.
The disappointing sales of the Wii U have only continued to worsen, dropping by 53 percent year-over-year, and even Nintendo’s popular handheld console, the 3DS, failed to perform well in the first quarter. Fluctuations in currency exchange rates have also negatively impacted Nintendo, and according to the company’s earnings report, it suffered an operating loss of ¥5.1 billion (roughly $48.3 million). This is much higher than the ¥4.2 billion loss that had been expected by Wall Street analysts, and it is particularly disappointing compared to Nintendo’s reported profit of ¥1.15 billion for the same time period last year.
It is unclear how the success of Pokemon GO has affected Nintendo’s more recent performance, but as the company explained in its letter to investors, Nintendo is not the sole owner of the game. Nintendo has 32 percent equity and voting power in The Pokemon Company, which licensed its IP to Niantic for the creation of Pokemon GO. While Nintendo will receive a portion of the revenue from the game, it may not be enough to make up for the poor performance of Nintendo’s other business. Nintendo has also announced that the release of Pokemon GO Plus, a wearable device designed to work with the game, has been delayed until September.
Nintendo does have one card up its sleeve with the upcoming Nintendo NX console, but so far the company has remained tight-lipped about the system. Recent rumors suggest that NX could be a mobile system with detachable controllers that can be played both on the couch and on the go, but Nintendo has yet to confirm or deny whether or not that rumor is true. The company also has a few major games set to release in the next year, including Pokemon Sun & Moon for 3DS and The Legend of Zelda: Breath of the Wild for Wii U and NX.
Image courtesy of Nintendo Co Ltd
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