Nintendo Mobile game delay triggers $4 Billion value drop

Nintendo Co. plunged for a second day in Tokyo trading after the console maker said the planned smartphone games system that had helped its shares jump more than 80 percent would be delayed by at least three months.

The stock finished Friday 7 percent lower, bringing the two-day decline to 15 percent, the most since February 2009. That cut Nintendo’s market value to about $23 billion.

Nintendo President Tatsumi Kimishima said Thursday a joint project with online games platform operator DeNA Co. won’t debut this calendar year as initially planned. Earlier this year, the company said it had overcome its reluctance to enter a booming market for free-to-play games that draws players away from titles for its 3DS handheld player and Wii U console. While Nintendo owns intellectual property including Mario and Zelda, the first game will be a free-to-play messaging-based application called Miitomo.

“Nintendo’s choice of a communications app to kick off the DeNA partnership may be an acknowledgment of the risks associated with featuring Nintendo’s best IP on mobile and thus undermining the appeal of Nintendo’s dedicated game machines business,” Jay Defibaugh, an analyst at CLSA Japan, wrote in an Oct. 29 note. He rates the shares sell.

DeNA shares also fell Friday, bringing their two-day plummet to about 20 percent, the most since May 2014.

Before Thursday’s share decline — the most in a single day since July 2011 — Nintendo had surged by more than 80 percent this year, fueled by late President Satoru Iwata’s announcement in March the company was entering the smartphone game market. DeNA had risen by 69 percent before Thursday, when shares fell the most since May 2014.

Nintendo announced the delay on Thursday, a day after reporting profit that missed analyst estimates for the three months ended September. Net income dropped to 3.2 billion yen ($27 million) and operating profit was 7.8 billion yen, based on first-half numbers reported Wednesday.

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