Why Nintendo Co. Ltd. Fell 14.4% Today

Image source: Nintendo

What: Shares of Nintendo (NASDAQOTH: NTDOY) fell as much as 14.4% on Wednesday following the release of disappointing first-quarter results reminded investorsPokemon Go megahit is unlikely to do much good for Nintendo's financial results.

So what: Nintendo's first-quarter sales came in at $588 million, a 31% year-over-year drop in the underlying Yen reports. The year-ago period's earnings of $0.65 per share plunged to a net loss of $1.93 per share.

Sales of Wii U systems fell 53% year over year, while software sales for the flagship platform increased by 3%.

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As a reminder, Nintendo does not make or sell the Pokemon Go app. The Pokemon Company, which is a joint venture between Nintendo and two other Japanese companies, receives license fees from Pokemon Go's in-game purchases, but the majority of those fees belong to former Googlesubsidiary Niantic Labs. Moreover, the mobile monster-hunting game was released well after the close of the first quarter's books and would not have made any difference to this report either way.

Now what: When Pokemon Go went viral, Nintendo's share prices more than doubled in less than three weeks. This report and the reminder of Pokemon Go's trivial bottom-line value for Nintendo itself have corrected that surge, leaving shares at a 13% 52-week gain.

The company is putting the finishing touches on its next-generation video game console, code named Nintendo NX. There isn't much reliable information

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