Nintendo Shares Downwards 18% After Pokemon Go Reality Check

Nintendo shares gas plummeted 18% after the gaming company told investors that Pokemon Go will have only limited effect on its boom line.

Pokemon Go was actually developed and distributed by a company called Niantic. Both Nintendo and The Pokemon Company, one of its subsidiaries, have invested in the privately-held Niantic.

The three companies collaborated on the game. But Niantic has other investors that stand to profit, including Google (GOOG).

Nintendo also owns 32% of The Pokemon Company, which controls the merchandising and licensing of the Pokemon franchise. The subsidiary will receive a licensing fee as well as payment "for collaboration in the development and operations" of the game.

Nintendo (NTDOF) could also profit from sales of "Pokémon GO Plus," a separate device that enhances the gaming experience.

Investors had hoped these sources would add up to a big financial boost for Nintendo. At one point following the game's release, company shares surged by more than 120%, adding $23 billion to Nintendo (NTDOF)'s market value.

The stock has since returned to earth, and shares are now up a more modest 60% from July 6.