The Japanese gaming giant’s shares dropped by 17.7% after they more than doubled in value since Pokemon Go’s launch on July 6.
Pokemon Go was developed by American company Niantic and Nintendo said profits from licensing and fees would be limited.
However, even with the decline, Nintendo shares are still up 60% since the release of Pokemon Go.
Overall, Japanese shares traded sideways with the Nikkei 225 index finishing flat at 16,620.29.
Nintendo said the accounting scheme for recognizing revenues from Pokemon Go meant its profits would not materially change.
The sharp drop was the biggest decline since October 1990, the stock down by 5,000 yen – the maximum daily limit allowed.
Nintendo is due to report first-quarter results this week and said it did not plan to revise its earnings outlook for now.
“Taking the current situation into consideration, the company is not modifying the consolidated financial forecast for now,” Nintendo said in a stock filing.
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