Get All Access for $5/mo

Nintendo Posts First-Quarter Loss, Delays Launch of Accessory for Pokémon Go While analysts have been upbeat about prospects for Nintendo to make money off the game -- how much it will be able to do so is unclear.

By Reuters

This story originally appeared on Reuters

Reuters | Kim Kyung-Hoon

Japan's Nintendo Co. Ltd. booked a quarterly operating loss on a sharply stronger yen and delayed the launch of an accessory for Pokémon Go, but hopes for long-term growth are running high on the mobile game's success.

First rolled out only three weeks ago, the game which has players walking around real life neighborhoods to catch and train Pokémon, has taken the world by storm, driving up Nintendo's market value by 50 percent.

While analysts have been upbeat about prospects for Nintendo to make money off the game -- how much it will be able to do so is unclear. Its main source of Pokémon Go income is set to come from its 32 percent stake in Pokémon Company which owns the licensing rights.

The Kyoto-based firm last week took the unusual step of saying ahead of results that Pokémon Go would have a limited impact on earnings and that it did not plan to revise its targets for now.

It posted an operating loss of 5.1 billion yen ($49 million) for the April-June quarter, wider than a Starmine SmartEstimate of a 4 billion yen loss. That compares with a profit of 1.15 billion yen in the same period a year earlier.

It also said it would launch Pokémon Go Plus in September instead of the end of this month as planned due to software adjustments needed to keep it in sync with the game. The accessory alerts players to nearby Pokémon so that they don't have to always be looking at their smartphones.

The delay is expected to hurt Nintendo's shares in the short-term -- they were trading down 7 percent in Germany.

But much of the run up in the stock has come from hopes for Nintendo to reap rewards from other character franchises like Super Mario and Zelda as it moves away from protecting its console business at all costs and delves deeper into mobile gaming.

"I believe Nintendo can leverage the success of Pokémon Go, bringing the game to its consoles or introducing other characters to similar games," said Masayuki Otani, chief market analyst at Securities Japan. "This is just the beginning for Nintendo."

For now, Nintendo has forecast operating profit to climb 37 percent to 45 billion yen in the year ending March. It did not go into any detail about earnings prospects for Pokémon Go in its financial statements or hold a briefing.

Analysts have said any benefits from Pokémon Go will likely continue to be countered to some extent by the stronger yen.

The yen surged 19 percent in the year to June due to disappointment with Japanese central bank's monetary policy and worries about slower global growth. Nintendo earns more than 70 percent of its sales overseas, making it vulnerable to currency swings.

The game, launched on July 6, is now available in nearly 40 countries. Research firm Sensor Tower estimates it has been installed more than 75 million times across Apple and Google platforms globally.

(Reporting by Makiko Yamazaki; Editing by Edwina Gibbs)

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

How to Be a Billionaire By 25, According to a College Dropout Turned CEO Worth $1.6 Billion

Austin Russell became the world's youngest self-made billionaire in 2020 at age 25.

Living

Taylor Swift Has a Lucky Number. And She's Not the Only High Performer Who Leans Into Superstitions to Boost Confidence.

Even megastars like Swift need a little extra something to get them in the right mindset when it is game time.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Marketing

SEO Trends You Need to Be Aware of Right Now, According to a Seasoned Pro

Navigate the future of search engine optimization to elevate your online presence and drive meaningful engagement.

Career

These 3 Big Tech Companies Offer 6-Figure Salaries and Easy Interviews — Especially If You Follow This Expert's Advice

There are far more candidates than positions, so being strategic on the job hunt is key.