Report: Nintendo President Satoru Iwata Faces A Crucial Challenge

By Sato . April 1, 2014 . 12:00am

With three consecutive years of losses, things haven’t been looking too great for Nintendo or its president and CEO, Satoru Iwata, who will face a crucial challenge this June, says Japanese publication Nikkei. (Thanks, Hokanko)

 

As always, there’s no lack of suggestions on how to improve Nintendo’s current financial standing. In recent events, Nikkei says, an investor from Hong Kong suggested Nintendo to make the move to smartphones, to which Nintendo responded, “are there any companies that make smartphone games while continually sustaining high profits?”

 

Meanwhile, according to the head of a Chinese investment company charged with analyzing Nintendo, “Nintendo ought to actively put their characters and other assets to use.”

 

A few years ago, you may have heard of Nintendo’s plans to create a character-based theme park in Kyoto, Japan. The Nikkei report indicates that this plan was quietly in the works, but since then, there hasn’t been anything to show of it, so one can assume that plans have been halted for the time being.

 

Nikkei say that the comments from investors regarding the use of Nintendo’s assets could be interpreted as an irritation, as they feel that Nintendo haven’t been able to find a new means of profit. The fiscal year ending March 31st, 2014 indicates a loss of 35 billion yen, which is hardly an improvement from last year’s 36.4 billion yen loss. Again, this means that Nintendo has seen three straight years of losses.

 

While the lack of sales of the Wii U console may be one of the main causes for this loss, Nintendo president Satoru Iwata remarked, “you can only understand the Wii U’s appeal after having played it. The reason why it is not selling is because this understanding hasn’t spread out enough.” Meanwhile, there have been proposals within the company regarding how to play the Wii U.

 

Nintendo’s current cash reserves sit at over 500 billion yen, but how much time Iwata will have to turn things around is another story. As of 2011, Iwata’s approval rating as part of Nintendo’s Board of Directors was strong at 92.89%. However, by 2013, that figure had dropped to 77.26%. Nikkei says that this next June will be the “June of trials” for Iwata.

 

Presumably, the publication is referring to Nintendo’s General Meeting of Shareholders, which is held in June every year, where Iwata will be re-elected to Nintendo’s Board of Directors by the company’s shareholders—at least in theory. Given Nintendo’s recent performance under Iwata’s leadership, the implication here is that Iwata is in danger of being voted off the board, which would put his position as company CEO at risk as well.

 

At Nintendo’s last major financial results briefing, Iwata did outline a number of initiatives that the company will pursue, in order to improve profitability. Among these was the idea of using Nintendo’s I.P. for more than just games. Iwata also outlined plans for the company to invest into the health and quality of life market, as an independent business from Nintendo’s usual games business. Smart-devices were brought up as part of Iwata’s strategy as well, in that Nintendo would attempt to develop smartphone apps and games with the goal of leading consumers back to their own platforms.


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