back to article Nintendo to investors: Pokémon Go won't make money come

Investors who bid up Nintendo have punished the company for pointing out the Pokémon Go app is not going to create a cash deluge. Announcing the official availability of Pokémon Go in its home market (in partnership with McDonald's, so you can guess where the happiest hunting grounds will be), Nintendo added that it only owns …

  1. Anonymous Coward
    Facepalm

    This clearly goes to show you...

    That most investors really don't read up on what they're investing on, I can't help think that the only thing these particular investors saw were dollar signs. I can understand that your average Pokemon Go player would only imagine Nintendo, but someone who plays the stock market usually also also have access to financial records and information about the companies.

    I suppose this is what happens if you mix greed and ignorance together.

    1. Oengus Silver badge

      Re: This clearly goes to show you...

      I suppose this is what happens if you mix greed and ignorance together.

      Isn't the very definition of modern "investors"? Follow the hype. It is also why some companies have ridiculously overinflated valuations but no sign of a profit.

    2. Dan 55 Silver badge

      Re: This clearly goes to show you...

      There's no chance to look at Nintendo and Pokemon and what their plan is, you see it's going up so you have to buy and you see it's going down so you have to sell.

      If we fill stock exchanges worldwide with herds of rampaging wildebeest they'd probably make more rational decisions.

      Yay the market.

    3. allthecoolshortnamesweretaken Silver badge

      Re: This clearly goes to show you...

      Given that every* economic theory I've come across so far assumes that all the participiants are rational beings and act rational... no, there really shouldn't be a Nobel for economics** because whatever it is or may be, it isn't proper science.***

      * Quite a lot, but certainly not all. In one of my former lifes I was enrolled in economics for two years; not in order to persue a degree, but to learn a bit and get to understand how these people think.

      ** Well, technically there isn't. Nobel didn't found one, the Swedish bank of issue**** did so some time later. But for all practical purposes it's 'the Nobel in economics'.

      *** There is a good and proper rant in this, but right now I just haven't got the energy.

      **** This reads kinda strage, I hope Pons Online didn't pull a prank on me here just now.

      1. Triggerfish

        Re: This clearly goes to show you...

        http://www.businessinsider.com/cat-beats-professional-stock-traders-2013-1?IR=T

        Cat throwing random mouse toys as good as stockbroker team.

      2. MonkeyCee Silver badge

        Re: This clearly goes to show you...

        You need to read better economics :D although you are correct about how insanely orthodox econ departments are. I studied econometrics, so we where the "geeks who want to be quants". Studied how the models are built, by people who help write them, and most of those are pretty wise to the ways of the world, and of the behaviors of groups of people.

        In general, micro economics is very good, and usually quite scientific. If you have a very specific situation, you can model it quite accurately. And a model for a similar situation can be used as a basis for a model of a similar situation. There's also plenty of experiments that show that people are *not* rational when it comes to negotiating over money.

        If you read the papers, there are often more caveats and assumptions than actual arguments. But it often ends up with a rule/model for every situation, all of which lose some amount of detail. So I'm always very careful about aggregated data, GDP and inflation by basket-of-goods can be manipulated to hide what is happening in various segments of the population.

        How economics is used politically is roughly half the things that are conventionally "agreed" on will ever be implemented, and only if it benefits the groups currently gaining the most from the current system. So you either can use models to benefit real world stuff (operations research), use it to "beat" the market by predicting behaviors, or be used to justify whatever our political masters are going to do anyway.

        The profit scaling from a free-to-play are massive. Your marginal cost for items is nil, your fixed costs are (hopefully) tied to the size of player base, and once you're news, then plenty of free advertising. It's like a theme park, either charge you $40 to come in and ride all day, or $2 a ride and reasons to come back each day. Why sell physical goods, when virtual ones cost you nothing and nothing to transport.

  2. Dave Bell

    I do find myself wondering just how many shares were traded to produce the huge market price, and how many more are being sold now.

  3. wolfetone Silver badge

    For 14,000 in game coins, they want the person to pay £79.99. That's £79.99 real, physical money, not £79.99 of in game money.

    If they had charged 99p for the game they'd be rolling in the money. But no, they've succumed to this bullshit model of giving the game away for free while making it difficult to play unless you put money in to it. They aren't the only ones to do this, EA/Maxis did it with Sim City, and another developer did it with a Simpsons mobile game. I think in the Simpsons you would pay about £150 for coins or something.

    1. Suricou Raven

      There was a small scandal about the My Little Pony game doing that - completing the game without paying was possible, but required more grinding than any sane player would ever be prepared to do, and as the game was mostly played by children this resulted in more than a few upset parents discovering an unexpected bill. Hasbro had to reduce prices in order to avoid bad publicity.

    2. Gene Cash Silver badge

      Yup, that's the "free-to-play" model, and it's now one of the standard models. Been around for a while now.

      Which gets you more money: 99c of 10k games ($10K), or where the game's free and about 25% pay an average of $10 in-game purchases ($25K) - which about the going rate. Do you see why it's popular now? Especially since more people get the game "because it's free!" who would probably pass it up even if it cost only a dollar.

      1. wolfetone Silver badge

        "Which gets you more money: 99c of 10k games ($10K), or where the game's free and about 25% pay an average of $10 in-game purchases ($25K) - which about the going rate. Do you see why it's popular now? Especially since more people get the game "because it's free!" who would probably pass it up even if it cost only a dollar."

        I didn't say I couldn't understand why it was popular, I said it was bullshit. Because something is popular doesn't make it right. *insert reference to Hitler here*.

        If you pay for a game you're paying for entertainment. If you have a game and you're paying for something in the game, you're paying for something that doesn't exist.

      2. Andrew Moore Silver badge

        Here's an idea- give the game away for free and have a once-off in-game purchase of 99c to unlock the full game. No bullshit with coins and the freepers still get to play alongside those who paid.

    3. tiggity Silver badge

      Though people can buy smaller chunks of in game coins for less real cash (smallest purchase is below a tenner)

      Alternatively they can keep gyms and earn coins in game

      Most people I know who have purchased stuff in PoGO have used Google play "credits" acquired from Google surveys (they answer a survey giving up personal data in return for a cash amount credited to their Google play account) - so "real money" but money that would only have been spent on Google digital goods anyway.

  4. Teiwaz Silver badge

    Not the only thing over-inflated.

    Most Pokemon-go-ers will get fed up once the novelty runs out, band wagon slows down, the challenge goes up and the pokemon get harder to catch. That'll leave the hardcore nutcasesfans to actually keep going and maybe laying out money.

    Any sign of Nintendos new console yet?

    1. Crazy Operations Guy Silver badge

      Re: Not the only thing over-inflated.

      "Any sign of Nintendos new console yet?"

      Why would they build a new console? They're more likely to just take their IP and start developing for the mobile market anyway. Consoles are a significant cost to develop and they were losing money on each sale anyway. Mobile phones are more than powerful enough to run most of their games anyway. And more than powerful to run re-releases of their old catalog, which they might focus on after seeing how much money Square/Enix is raking in by re-selling the old Final Fantasy games for $20 a pop to mobile customers.

      1. toxicdragon
        Facepalm

        Re: Not the only thing over-inflated.

        There has been leaks on it for ages the NX, that, according to http://www.techradar.com/news/gaming/nintendo-nx-release-date-news-and-rumors-1289401 has even MORE gimmiky rubbish, a pulse-o-meter is the given example, although I am sure that it has been tried,

  5. TeeCee Gold badge
    Facepalm

    How dare they!

    Of course they deserve to be punished. If the great unwashed ever realised that having a massive user base is not the same as having a massive load of cash, the whole house of cards might come down.

  6. Pig Dog Bay
    Black Helicopters

    Nintendo wants to buy back its shares?

    So Nintendo own 32% of Niantic, which means Nintendo will receive 32% of the profits as dividends from PoGo, so Nintendo will make more money.

    Nintendo shares have doubled but since this announcement have fallen by 17%, me wonders that Nintendo has missed the boat and wants to by its shares cheap to keep all that nice PoGo dividends?

  7. armyknife

    Frenzied 'investors', hmm we really do have a mature system of capitalism.

  8. Baldy50

    Toys?

    What if they got some toy manufacturer to make the characters in a cuddly doll/toy form for kids to collect?

    Could bring in a bit of coin.

    Furbies etc.... Frowns in despair!

    1. Crazy Operations Guy Silver badge

      Re: Toys?

      Have you been living under a rock since 1990? The mid-90s were littered with so much Pokemon crap that it was nigh-impossible to not trip over a stuffed Pikachu doll on the way to the bathroom, even if lived alone and a child was never seen anywhere near the place...

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