Nintendo reported net profit of 24.5 billion yen ($233.9 million), compared to a net profit of 8.2 billion yen ($78.2 million) in the same quarter previous year. Turnover for the period was 61 billion yen ($582.5 million), down 31.3% YoY from 90.2 billion yen ($861.3 million). Earnings declined primarily on account of weaker hardware and in-game purchase sales, even as 3DS and Wii U software sales increased 7% and 3% YoY, respectively.
Analyst Comment
Nintendo’s stock enjoyed a massive spike – more than 60% – after the launch of Pokémon Go. However, the company did not develop the game (that honour belongs to Niantic) and cannot directly profit from its success.
Nintendo owns a 32% stake in The Pokémon Company, which licenses the Pokémon franchise, but will see only a small amount of the revenue that flows back to The Pokémon Company through Pokémon Go. After this harsh reality check, Nintendo stock fell 18%, although it enjoyed a small rebound soon afterwards. (TA)
