Nintendo Shares Drop by 7.6 Percent as Smartphone Business Hangs in the Balance

By   /   Jan 6, 2016
Nintendo CEO Tatsumi Kimishima

Rumors were around for a while that Nintendo is jumping into the mobile gaming business, but it all came true last May when the company finally committed to releasing a smartphone title in partnership with DeNa.

DeNA is a highly popular Japan based ecommerce websites and mobile portal provider, it also owns Mobage which is the biggest smartphone gaming platform in Japan.

At the time Nintendo said that it is aiming to release a new IP that is specifically designed and optimized for smartphone devices. Later on, the company announced Miimoto as its first mobile project in partnership with the Japanese mobile giant, DeNA.

Miimoto was more of a mobile communications application that helps friends and family communicate and share their interests.

To this day, Nintendo is yet to properly dive into mobile gaming scene but it is on the verge of it. However, investors aren’t too happy with the Japanese videogame maker delaying the inevitable, and thanks to SMBC Nikko Securities Inc. cutting its recommendation, Nintendo shares dropped 7.6 percent.

Nikko claims that Nintendo’s mobile business won’t contribute to the revenues until year ended March 2018. 7.6 percent is the biggest decline in shares since October 2015. Meanwhile, Topix index dropped by 1.1%.

According to an estimate, company’s operating income for fiscal year starting April 1 is expected to be around 30 billion yen (roughly $253 million). Operating income is less than half of what was previously expected of Nintendo. It seems to be due to reduced sales volume for the renowned 3DS and revised assumptions about the company’s smartphone projects.