When Pokemon GO released, Nintendo’s stock soared to some incredible numbers. That was largely misplaced, as Nintendo did not stand to profit from the game nearly as much as Niantic and The Pokemon Company did. That being said, Super Mario Run is a wholly owned Nintendo developed mobile game that debuted to some top selling numbers. Despite that success, Nintendo stock investors are not buying it, as Nintendo’s stock fell a shocking 4% overall on launch day.
According to some analysts who spoke to stock holders, they are concerned that Nintendo has overpriced the game at $9.99 and that despite strong launch numbers, the game will see a sharp decline, especially given there it no current way to continue to get money after an initial purchase (IE, micro-transactions). They are worried that the larger phone market is going to reject the game at the current price point.
My response? Investors must hate making money. While it’s doubtful Super Mario Run as a single purchase game can even touch some of the overall top grossing games out there, it’s undoubtedly already a massive success that’s getting really good reviews. Investors are truly looking for that “Pokemon GO” like game that may never come around again, ignoring the fact that it’s highly likely already after a single day on the market, Super Mario Run is probably already extremely profitable. As a mobile game Nintendo probably spent less than a year making with a small team lead by Shigeru Miyamoto (and using already existing Mario assets at that), this game was probably made on a really small budget.
That means that the stock price dropping goes in stark contrast with the reality of Nintendo’s profit margins on the game. Of course, Nintendo’s next investor meeting in January will truly tell the fate of the game. Even if sales drop off (and they still have to release it on android devices too), I am willing to bet Nintendo is making a ton of profit on this title, making it an unequivocal success.
I think this is a classic case of investors just never being able to be pleased, even as Nintendo releases something that is clearly profitable. It’s just not profitable enough, so you know, making money means lowering stock values. #logic