Join our Waitlist for Expert Advice!

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.

Business News

You Have One Month Left to Buy a House, According to Barbara Corcoran. Here's Why.

"If you are planning on waiting a year and seeing where interest rates go, you are out of your mind," Corcoran said.

Business News

Meta Fires Employee Making $400,000 Per Year Over a $25 Meal Voucher Issue

Other staff members were fired for the same reason, per a new report.

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.

Thought Leaders

These 3 Trends Will Change What It Means to Be an Entrepreneur in 2025

Here are three entrepreneurship trends from the new Global Entrepreneurship Monitor report that are changing the landscape for the future.

Side Hustle

I Made $14,000 in 1 Week With a Spontaneous Halloween Costume Side Hustle — Here's How

Sabba Keynejad was in art school when he started to refine his entrepreneurial skills.

Franchise

The McRib Is Back, But Only at Select McDonald's — Here's Where to Find It

This scarcity is nothing new. In 2022, McDonald's announced a "Farewell Tour" for the McRib, suggesting that it might be the last time customers could get their hands on it.