The wild success of Pokémon Go has been a boon for Nintendo. By July 11, their stock had risen $7.5 billion since the release of the game. Overall since the launch, Nintendo's stock has risen $12 billion. No doubt that can be attributed to the game's massive grasp on the attention of millions, even when many of them should be paying attention to other things.
Nintendo needed to offer a reality check for investors in a letter on July 22. The letter says that they did not develop or publish the mobile game, but they rather own a 32 percent stake in The Pokémon Company, who markets and licenses the Pokémon brand. The Pokémon Company receives "a licensing fee as well as compensation for collaboration in the development and operations of the application" from Niantic, that friendly logo you see when you open the app. Nintendo just sees a piece of the piece that The Pokémon Company gets.
"The Pokémon Company is [Nintendo's] affiliated company, accounted for by using the equity method," states the letter. "Because of this accounting scheme, the income reflected on [Nintendo's] consolidated business results is limited."
Monday was the first trading day following the letter, and Nintendo stock fell 17.7 percent in Tokyo, which was the company's biggest fall since 1990, according to Bloomberg. That's $6.7 billion in market value. However, the company's value is still up overall since the launch of Pokémon Go. Bloomberg says that most investors knew that Nintendo wasn't the publisher or owner of the game, and Nintendo wasn't trying to make it appear as though they were. Nonetheless, the letter, which states that they aren't revising their financial forecast upward, may have cooled people on the stock. Couple that with some short sells and a fall harder than entering your local gym with a Magikarp is the result.
Nintendo is, however, developing a device called the Pokemon Go Plus, which is a wearable connected to the user's smartphone by Bluetooth, alerting users to Pokémon and Pokéstops as they wander the world not staring at their smartphone. Nintendo is also expected to announce plans for their next console in the not too distant future. So, don't worry about Mario. He's going to be just fine.