The Japanese media is reporting that Nintendo will officially post a 20 billion yen loss (about 220 million US dollars at current exchange rates,) tomorrow. Nintendo CEO Satoru Iwata says he is committed to making sure the company is profitable again by next year, and he implied that he would resign from his position if he fails to meet that goal.
Nintendo blames their losses on the lackluster reception that the Wii U has suffered ever since its launch late year. Earlier this year Nintendo cut their sales forecasts for the system substantially: while they originally planned to sell 5.5 million Wii U’s by this time, they now estimate that only 4 million Wii U’s have been sold worldwide, lagging significantly behind the original Wii’s sales numbers, and even slightly behind the Gamecube, which was previously Nintendo’s least popular home console.
Strangely, instead of announcing new strategies designed to revive stagnant Wii U sales, Nintendo says they will focus on the 3DS for the time being. The 3DS has been the best selling piece of gaming hardware in Japan for the last year or so, and has sold 30 million copies worldwide. Nintendo says they will release “key titles” for the system this year that they hope will cement the system’s lead in Japan and make it more popular worldwide.
In a statement to investors, Iwata says that he still thinks Nintendo will be profitable again — in fact, he strongly implied that if the company didn’t turn a profit of 100 billion yen by this time next year (about $1 billion US,) he would resign from his position as Nintendo CEO. Iwata became the CEO of Nintendo in 2002, and was the first president of the company to not be related to the Yamauchi family, who originally founded Nintendo in 1889. Before he was promoted to upper management, Iwata worked on games such as the Kirby series and Earthbound.
It’s been a tough year for a lot of companies — Capcom and Square-Enix have already posted similarly massive losses, and Square-Enix’s long time CEO, Yoichi Wada, resigned a few weeks ago. While these reports are usually accompanied by doom-and-gloom speculation about Nintendo leaving the hardware business (a rumor that has persisted since the N64 days,) those predictions are still perhaps a bit premature, despite the Wii U’s dire sales: Sony, for instance, posted similar losses for the last four years in a row, but they’ve thankfully managed to turn things around and are on track to post a profit for this year. I’m not entirely optimistic about the Wii U’s chances, especially with the impending launch of the PS4 and the new Xbox only months away, but then again, with 30 million units sold in only 2 years, the 3DS is a bona-fide success at this point, and that was similarly proclaimed dead-on-arrival within its first year as well. Still, the Wii U is definitely in a very bad position, and Nintendo is really going to have to go all out if they don’t want the Wii U to become the next Virtual Boy. (PROTIP: show us the next Smash Bros. and drop the price already. By a lot.)