Over the past few days Nintendo has made a concerted effort to show gamers and shareholders they are willing to change. After sales projections took a troubling nosedive, and then several high-ranking executives took pay cuts, Nintendo certainly needs help, but where exactly that help might come from is unclear.
Although Nintendo has already outlined several new plans for the future, including a dynamic pricing scheme for loyal customers and a focus on the health market, one other solution they are considering is mergers and acquisitions. The publisher doesn’t have anything to announce just yet, mind you; but they seemingly want fans to know any opportunity for upward momentum is under consideration.
News of Nintendo‘s new strategies comes courtesy of company President Saturo Iwata who, in an interview with Nikkei, discussed everything from share buy backs to customer discounts. And although Nintendo’s recent numbers have not been good, Iwata reveals the publisher has built up enough cash reserves to presumably weather the storm.
â€œWe should abandon old assumptions about our businesses. We are considering M&As as an option. For this reason, we’ll step up share buybacks. We’ll change the way we sell products, by managing customer information via the internet. We’ll offer discounts to steady, regular customers. We’ll cultivate emerging markets and launch new businesses in health and other areas. In an emerging country, you can expand the user base only after you offer a product line different from advanced economies in pricing.â€
Unfortunately, Iwata wouldn’t say much more about the mergers and acquisitions, only that his company is considering them. Moreover, there was no explanation as to whether or not such a possibility is meant as a last ditch effort or if it could be in the near future.
The good news, as Iwata explains, is that those cash reserves were built up to sustain any potential hardware sales dips. Said reserves likely came in handy when the 3DS struggled early on, and now are being bolstered by the same handheld they worked to help.
â€œWe built up cash reserves when earnings were strong. Because the entertainment industry ebbs and flows in wild swings, Mr Yamauchi insisted it is vital to have deep pockets. Without savings, we could not have recovered from a single failure in game systems. Even now, we can afford many options because of our robust financial standing.â€
On the flip side, there’s no escaping the fact that Nintendo is on a downward trajectory in the home console space. It seems like Wii U owners are getting bad news on a regular basis – like Warner Bros. cancellation of Batman DLC – and third party publisher support has all but dried up at this point. There’s no question that Nintendo has a strong first party line-up, but the speed with which they release new titles could be a little quicker.
Acquisitions of high profile developers, however, could help bolster first party support, and put Nintendo in a more stable position financially. It’s not necessarily a catchall for every problem, but it might be enough to increase the Wii U’s profile among gamers.
Can you see Nintendo realistically resorting to mergers or acquisitions? Where do you think Nintendo should turn if they want to improve?