In a talk with Japanese newspaper The Nikkei, Nintendo president Satoru Iwata says he would be open to the idea of mergers or an acquisition, something that I had never expected hearing from Mr. Iwata. A Nintendo merger or acquisition is just unheard of to me. This comes after recent failings in Nintendo earnings, stock drops, and the president cutting his own salary in half as a result of poor performance.
The recent failings being referred to, of course, includes their new video game console, Wii U. It offered innovative new gameplay, and incredible user experience from a console with a unique style that the world had never seen before. Unfortunately for Nintendo, the world also didn’t really care for its style much, opting more towards the power and graphical immersion that players of the Playstation 4 and Xbox One consoles experience.
“We should abandon old assumptions about our businesses… We are considering M&As as an option. For this reason, we’ll step up share buybacks.”
This could be potentially huge to a prospective buyer, as Nintendo currently owns exclusive rights to some of the most iconic video game characters in the world. Undisputed amongst those characters of course, the Mario franchise and The Legend of Zelda, amongst others such as Donkey Kong, Star Fox, Metroid, Pokemon, and more. A merger with Nintendo would undoubtedly mean new potential for these characters on a new console for the first time.
Nintendo also has a serious presence in the mobile gaming world, despite having no interest in bringing their characters to mobile phones. Nintendo’s “Gameboy” devices started the mobile gaming revolution in the 1990’s, and has been the inspiration ever since behind the development of the platform into dual-screen devices like 3DS.
I wouldn’t expect Nintendo to be bought anytime soon though, since Nintendo has a large amount of cash reserves, and has also bought back over$1.2 Billion in stock. Iwata acknowledges that the future prospects of his company are not the greatest at this time though, and that the demands of being a public company has made the culture and traditions of Nintendo difficult to maintain, and has worked against them for the last few years. Still, the idea of an acquisition of the most well-known video game creator in the world is an astonishing thought for me, and while I hope it actually doesn’t happen, and that we keep more competition in the market through great gaming innovations, I do want to see Nintendo reverse the mistakes they’ve made recently, and get back to making what their customers actually want, rather than what they believe they’re company should make. These should be parallel paths, but they simply haven’t been for Nintendo as of late.
“Quarterly earnings reporting is not a good fit for Nintendo… We don’t know in advance how much of a hit a product can be. Even when we make plans thinking that a goal is reachable, sometimes things don’t go well and this ends up upsetting (shareholders). But it is thanks to the stock market that Nintendo has grown to what it is today. I don’t want to turn to a management buyout just because we are inconvenienced now.”
“Nintendo has undergone continuous changes over years, moving from Hanafuda playing cards to video games, and offering newer systems like the Wii… But we’ve been preoccupied with a fixed idea of what a game should be like. The game industry is at a turning point amid new developments like the rise of smartphones.”
What do you think?
What is the correct course of action to get Nintendo back on track? What do you hope to see from them in the future? If they are to be acquired by anyone, who should it be, and why? Leave us your thoughts in the comments below.
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