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GAMING NEWS

Iwata Comments On Why Nintendo Suffered Its First Operating Loss

Posted on Thursday, July 12 @ 13:29:16 Eastern by Alex_Osborn


I love Nintendo, but boy have they dropped the ball this past decade year. For the first time in the company's history, Nintendo reported an annual operating loss of approximately $460 million. But that's old news. What's of current pertinence is Iwata's response to why the company failed so miserably this past year. 

According to the Nintendo president, in an interview with The Independent, there were three major factors that led to the company's losses, the first of which being the upcoming launch of the Wii U. “It’s very unfortunate that we had to record a loss and I feel personally responsible for that. My goal is that this will be the only time we record a loss. There are three factors that led this loss. First of all, we were, in terms of the console life cycle, in a console transition phase, so the fact that sales shrank during this period is actually quite normal,” he said.

In other words, they had no Wii games. With the Wii's successor on the horizon, support for that tiny white box - which has been collecting dust in virtually every household on the planet - has been completely abandoned. And let's face it, if there's no exciting new software coming to your home console, you're bound to flounder a bit.

The second reason Iwata outlined was the high initial price point of the 3DS. “The next factor is that when we launched the Nintendo 3DS last year it lost momentum after launch, so we had to take measures and cut the price in order to avoid a failure toward the end of the year, which meant we were selling Nintendo 3DS units at a loss; these two problems we will solve this year,” he explained. Pretty self explanatory, no?

Finally, the last excuse reason as to why Nintendo struggled this past year has to do with the current global economic situation and the unfavorable value of the Yen. “The third factor, which is outside our range of influence, is that the global economy situation is unstable and the exchange rate is very disadvantageous for us with the Yen being so strong. Obviously we have no influence over this, so we need to find a set-up at our end that will still allow us to make profit.”

Let's hope the Wii U hits big for Nintendo so they can fund the development of some killer first-party content for their new HD console. Hey! Why are you laughing?

[Via]


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