During an interview with The Independent, Nintendo president Satoru Iwata explained the factors that led to Nintendo’s first-ever operating loss, which was recorded earlier this year. The first reason, Iwata explains, is that Nintendo is preparing to launch a brand-new console – the Wii U. According to Iwata, it is normal to experience losses during a transition period.
The second factor is the Nintendo 3DS’s initial price-point and its lack of momentum, which picked up toward the end of 2011 when more games were being released. The final factor, which contributed to Nintendo’s loss, is that the global economy is unstable and the exchange rate is disadvantageous for Nintendo with the Yen being very strong.
“It’s very unfortunate that we had to record a loss and I feel personally responsible for that. My goal is that this will be the only time we record a loss. There are three factors that led this loss. First of all, we were, in terms of the console life cycle, in a console transition phase, so the fact that sales shrank during this period is actually quite normal.”
“The next factor is that when we launched the Nintendo 3DS last year it lost momentum after launch, so we had to take measures and cut the price in order to avoid a failure toward the end of the year, which meant we were selling Nintendo 3DS units at a loss; these two problems we will solve this year.”
“The third factor, which is outside our range of influence, is that the global economy situation is unstable and the exchange rate is very disadvantageous for us with the Yen being so strong. Obviously we have no influence over this, so we need to find a set-up at our end that will still allow us to make profit.”