updated 06:00 pm EST, Sun February 2, 2014
Gaming company to reevaluate business strategies
Nintendo is off to a rough start in 2014, after news in January of a less-than-optimal quarterly performance for the company that saw the forecast number of units of the Wii U cut as revenues were down across the board. It didn't help that the company that it opened itself up to a small controversy over the use of smartphones to market upcoming products -- a plan it first denied, then admitted to. However, the recent decline has caused Nintendo to look toward a different future as it looks to opening up new business strategies.
According to an interview with The Nikkei, Nintendo CEO Satoru Iwata says that the company "should abandon old assumptions about their businesses" and that they "are considering mergers and acquisitions (M&As) as an option." While Iwata doesn't go into any specifics about which types of deals the company may be looking at, it may not happen any time soon.
While sales are down for the company overall from expectations, Nintendo is far from being in poor financial shape -- the company is still turning a profit overall. However, with the oldest console in the current generation of competitors, due to the releases of the strong selling Playstation 4 and Xbox One, Nintendo may not see a return to Wii release-era revenues in the immediate future. Fans of the console manufacturer have long spoken of the company turning away from hardware, much like SEGA was forced to in 2001 because of declining popularity.
In the meantime, Nintendo will be accelerating their share buybacks, according to Iwata, in order to put them in a stronger position in the case that the company takes serious interest in a merger or acquisition. While the relatively small dip in sales, even considering the large volume of 3DS sales in the last year, may be upsetting to share holders, Iwata says that "it is thanks to the stock market that Nintendo has grown to what it is today." Net assets for the company are estimated to be at $12.4 billion through the end of December 2013.