Teeqoz said:
Assumption #1: "It's about Nintendo's incompetency"
What? How do you get that from Nintendo clarifying the ownership structure and means of accounting for financials related to Pokemon Go?
The initial run up of the stock, to me, was that Nintendo's involvement in Pokemon Go would be a lot greater. With their statement on Friday, we now know that their involvement is limited, hince the sell off. The incompetency comes in that they were not able to capitalize more from a game that is, according to sources, the largest mobile game in history and bringing in 1.6 million dollars a day in revenue in the first 20 days.
Like I said, that's not the incompetence of Nintendo; it's the incompetence of the investor's that hadn't done their research on the ownership structure of the Pokemon IP. To those that did, it was clear from the start, even from the announcement of Pokemon Go that Nintendo couldn't bag all the cash themselves. Some investors didn't realize this and jumped on the bandwagon, only to panic when Nintendo clarified on friday. It's not Nintendo's fault that investors hadn't done their research on The Pokemon Company and the ownership structure of the IP.
Assumption #2: "For today, they will not be able to leverage any of Pokemon Go's success"
Can you clarify what you mean by "leverage any of Pokemon Go's success"? Their statement says "Because of this accounting scheme, the income reflected on the Company’s consolidated business results is limited.". That does not in any way imply that they can't leverage any of Pokemon Go's success. Quite the contrary, saying that the impact on the consolidated business results is limited basically directly states that there is an impact, hence they are even leveraging it directly. However, furthermore, they are leveraging it indirectly. We have data from the UK that confirms that 3DS games have received tremendous boosts after Pokemon Go's launch. The entire Pokemon game catalog on the 3DS has more than doubled in week on week sales after the game launched, and other 3DS titles have reappeared in the UK chart. Which brings us to
By 'for today, they will not be able to leverage any of Pokemon's Go success' im talking about the present, here and now, and in the hear and now Nintendo is not benefiting from Pokemon Go in a way that would cause a 100% rise in its stock, its only benefiting on a limited basis. My statement doesnt say anything about the future. My mention of the halo effect from Pokemon Go directly answers your UK question. I said that even with the halo effect in place, it didnt warrant Nintendo to change their forecast on Friday, it doesnt say they will not do it Wednesday or later in the quarter when more time passes.
So we have gone from "they will not be able to leverage any of Pokemon Go's success" to "Nintendo is not benefiting from Pokemon Go in a way that would cause a 100% rise in its stock, it's only benefiting on a limited basis." Pretty huge difference between those two. But at least we are making progress here! I've already covered the 100% increase part, it was always clear that a 100% increase wasn't justified to those that has sufficient knowledge about The Pokemon Company and tye ownership structure of the Pokemon IP. About the "halo effect", you are missing the point. Nintendo factored in the halo effect in their forecast back in april. They expected Pokemon Go to boost other Pokemon related games, so they adjusted their forecast accordingly. Hence why they don't have to adjust it now after thenrelease of the game; they had already factored it in.
Assumption #3: "not announcing any future revisions to sales or profits which tells me that the supposed halo effect that Pokemon Go was supposed to have is not that extensive."
First of all, their statement literally said that they had already taken into account the positive effect of Pokemon Go in their forecast. Explaining why it seemed high at the time they gave it... so why would you expect them to raise them now, when they've already factored it in? Secondly, see above paragraph about what we know about the umbrella effect Pokemon Go has had on the 3DS and its games catalog.
The first 20 days of pokemon go release did not make Nintendo revise any hardware or software numbers even with the halo effect in. If the halo effect is greater as time goes by, then I will stand corrected, as of now it hasn't happened. Also they couldnt have taken account of the positive effect becaue the device they are using the gauge it, pokemon go plus, is not even out yet, it releases July 31st. If the game is the runaway hit it is and more people than they initially thought buys the device, then they would not have accurately accounted for the positive effect of Pokemon Go.
Once again, they already factored in a boost in 3DS hardware and software sales. And uhm... of course they can take into account Pokemon Go Plus as well, even though it hasn't released. That's what forecasts are about. Predicting what your future results willl be, based on what happens in the future. Forecasts aren't 100% accurate, it's why they are refered to as "guidance". You are right though, Pokemon Go Plus might outperform their expectations, but they can't forecast that, their forecast is their expectation. not sure where you were going with this.
If you read it, I'm telling you that your assumptions that you have outlined based on it are silly. If all you had said was that it wasn't due to profit taking, but because of the statement they issued where they explained that the impact would be limited, then yeah, but there was a lot more that doesn't appear to have taken into account the info that's there.
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