Nintendo shares plummet when investors learn it didn't make Pokémon Go


#1

Originally published at: http://boingboing.net/2016/07/25/nintendo-shares-plummet-when.html


#2

I remember wondering whether/how Niantic was paying Nintendo for this. Now we know. At least we can take comfort in the spectacle of markets being highly rational.


#3
Wild APP Appeared!

What will TRADER do?       BUY         SELL
                           RUN        »IRRATIONAL EXUBERANCE

#4

Short.


#5

The Wisdom of the Free Market in action.


#6

So much for the “wisdom of crowds”, " rational economic men", and “the perfection of the market”.

I had a neighbor who worked on wall street for many, many years - she said the bulk of traders are exactly the same as off-track betting addicts, just in nicer suits.


#7

White-boy crack rock, to quote Boiler Room.


#8

This seems pretty pathetic.

I suspect that Nintendo’s decision to farm out the work was a sensible one, in the has-the-humility-to-recognize-something-you-are-at-serious-risk-of-fucking-up sense; but it was never an especially good sign for Nintendo, since it suggested that even they didn’t think they had the clout and the competence to either handle this sort of project in house or line up a more or less subservient minor-label development house whose name would have been completely irrelevant to the finished product.

Sure, there is still money in having a highly licensable brand you can slap on stuff; but it is a lot more interchangeable than having the expertise that creates those licensable properties in the first place.


#9

While I generally agree (Nintendo’s way behind the game on mobile dev., and mostly just has valuable intellectual property in that arena), it should be remembered that Niantic pitched the game to Nintendo based on their work with Ingress - Nintendo didn’t go seeking them out to make the game.


#10

I was wondering what the heck was going on when I read that Pokémon Go had caused Nintendo’s share to skyrocket. I thought, “When did Nintendo buy Niantic?” I really should have known that the answer was that they didn’t - people are idiots.

That may be true, but it’s the kind of game you couldn’t even think about making unless you already had something like Niantic’s location database that they built up for Ingress. Pokémon Go is just not the kind of game that you can make from scratch.


#11

Chance to buy in. Silly people, they still license the pokemon stuff was a goldmine before and now it’s going to be a platinum mine.


#12

The story of the game came to be is actually interesting and somewhat accidental…

Its less Nintendo farmed it out, so much as they allowed a guy to do a thing with their property that was viral and cool.

http://www.inc.com/dana-severson/what-overnight-success-pokémon-go-took-20-years-to-take-off-according-to-its-cr.html


#13

Indeed. I’m not saying that it was a bad decision on Nintendo’s part, I suspect that they got a much better game doing it this way. What I think is idiotic is the people who reacted to the game release by bidding up Nintendo’s stock price as though it was a demonstration of Nintendo’s ability to just come out and release a relatively mature mobile game quite unlike their historical stuff; rather than being a sign of knowing how to license a franchise without leaving it feeling sullied.

It’s particularly insane, on the investors’ part, because of the examples of outfits like Zynga and King, which genuinely could and did produce a crazy-successful hit in a then-unconventional gaming niche; but then went on to burn hilarious amounts of money proving that they had absolutely nothing else in the pipeline and really no idea what made their breakout hit.

I can definitely see a value bump on “New Pokemon game released; public reaction is that they did well”; but the value bump that actually occurred was the one sized for “New Pokemon game released; Nintendo crowned champion for life of mobile gaming”, despite the fact that the game wasn’t a demonstration of Nintendo’s capabilities, specifically depended on Niantic’s; and we’ve already had several golden boys of gaming toppled after they couldn’t repeat their original success.

That’s what seems so crazy.


#14

I peer at Bitcoin daytrader forums from time to time and it’s tough seeing their average degenerate gambler go through the same dishonesty as anyone with a similar addiction.

One fun game is “spot the liar”, the people that appear to always report making money, never ever losing money no matter the move.


#15

Indeed. Lots of traders made stupid money selling high and now different traders are going to get stung as they try to get out of Nintendo.


#16

But when Nintendo issued a statement to remind everyone that its stake in the app is just 13 and that revenue from the game was already taken into account in its forecasts

Wow, that’s small. 13 Yen? Or is that a unitless pure number?


#17

Yeah, smart licensing deals are still smart. Disney, for example, like other movie companies with game development arms, keeps getting out of game development because they realize they can make a more consistent profit by just licensing things out.

This is often true of game companies, sadly (also common is recognizing what made a hit but not having the ability to replicate it, thanks to the uncertain alchemy of game development). Although I think Zynga did understand what made their hits - they looked around, found a game that had appeal but no marketing money, copied it exactly and then threw a bunch of marketing clout behind it until the original game was buried and forgotten. Seriously - they did this for all their hit games (and quite a few of their small ones, too). They just couldn’t adapt their strategy when things shifted to mobile, and they had a pretty dysfunctional corporate culture, from what I’ve heard from friends and coworkers who worked there.


#18

Nintendo doesn’t directly develop anything Pokemon. They created a separate company, ‘The Pokemon Company’ years ago.


#19

The stupidity of the mob.


#20

I like that Nintendo were the ones who poored cold water on their soaring stock valuation; although it’s obviously in their own self interest to do so in order to avoid the emotional backlash from those investors who failed to do any real research before purchasing shares. I’m thinking around 20% of the investors knew they could game Nintendo’s stock by buying shares to show an interest perceived to be because of Pokémon Go, and the remaining 80% followed hoping to get aboard the perceived money train.

I don’t think the 20% collaborated to make it happen, they just know how to play the game of short term trading. It’s part of the Invisible Hand of the marketplace.

That being said, I like that Nintendo’s valuation has dropped significantly. I’ll likely buy some shares now. The NX is looking to be very competitive (compared to other consoles), they are positioning to loosen their grip on their IPs and license them to other companies, and they are looking to have some of their games available to play on mobile devices and PCs(which PC gaming is seriously on the rise). This tells me they are rolling up their sleeves and looking to really compete in the modern gaming arena, and for the long term. It may take 2 - 3 years to really show, but I prefer investing in the long run anyways. So, hurray for me that Nintendo’s stock prices are down, because now’s the time to buy.