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Satoru Iwata Lays Out Three Factors That Led To Nintendo’s First-Ever Operating Loss

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.”

64 thoughts on “Satoru Iwata Lays Out Three Factors That Led To Nintendo’s First-Ever Operating Loss”

    1. The USD needs to get back on top. Even if others might not agree, things like this did not happen when the USD was the leading currency in the world. Change on the economics of the world is pretty bad, and takes years to balance itself out again. But obviously that’s not going to happen any time soon.

  1. It happens. Every business has suffered a loss at one time or another. You just hopefully learn from it, pick up the pieces, fix what you did wrong, and move forward.

    Although, as was noted, some circumstances are out of their control such as the global economy, which has an impact on everyone’s business.

          1. You mentioning Aleos directly means that you want him to respond I know its your opinion but comments mentioning other consoles being bad then mentioning a troll just starts flamewars

                1. well i guess U can say its my catchphrase lol, but ever since dagozoon ( i for got his name please forgive mii) the dude that said “leave luck to heaven” I started to say this, even NSAF saids” Together Wii U” even though im the second person who said that…
                  My point is im use to it, hard to go back if U ask mii.

  2. Of course fans and people who arent stupid haters alteady knew that.
    Nintendo, always having to educate haters, again

    1. yeah and there’s retards saying “oh there it is Nintendo is going out of business” or something like that (idk) while there other companies that made bigger mistake (few examples like Sony ps3 price & xbox red ring), but they dont see it as mistakes at all.

      1. Before you read my comment below :)
        you might have misunderstood the below comment and to stop everyone getting annoyed and saying things they shouldn’t

        At the beginning of the comment it put : IN BEFORE this is a longer version of Inb4 and is used to make fun of common comments by using a sarcastic version of the comment. it in no way implys that those are my believes the way i wrote it (all caps, misspellings repeated) is a common way for bad trolls to write and I was using it to satire the trolls that usually appear on this website spouting nonsense like that. I’m Sorry you took it to be serious and I hope you can take it as the satire of arguments made by trolls it is not as a real comment.

        1. um no dude i know what u said and i did not accuse U as quote “a troll”. U got the wrong guy man. alkakadri did, but your comment was confusion at first all tell U that…

          1. i know but i don’t want another misunderstanding like alkakadri’s so i put it above my comment so people would be prepared

  3. In before:
    personally i think the loss is something iwata will be sad about forever and that’s a shame :(

      1. He believes that he caused it and out of guilt took the pay cut so he wouldn’t have to fire anyone
        He is a hero but it wont stop him feeling guilty.

          1. troglodyte?
            Troglodyte may refer to:

            Troglodytae or Troglodyti, an ancient group of people from the African Red Sea coast
            Troglodites, a fictional tribe described in Montesquieu’s Persian Letters, supposedly descending from the ancient Troglodytae
            Homo troglodytes, an invalid taxon coined by Carl Linnaeus to refer to a legendary creature
            Caveman, a stock character based upon widespread concepts of the way in which early prehistoric humans may have looked and behaved
            Troglodyte (Dungeons & Dragons), a race of humanoid monsters in the game Dungeons & Dragons
            Troglodyte, a 2009 film also known as Sea Beast
            “Troglodyte (Cave Man)”, a funk song by the Jimmy Castor Bunch on their 1972 album It’s Just Begun
            Morlocks, a fictional species created by H. G. Wells for his 1895 novel, The Time Machine. They dwell underground in the English countryside of 802,701 AD in a troglodyte civilisation

            If you mean troll i’m not one.
            It’s ok I expected a few misunderstandings when i posted this but never mind lets just get along i see no reason at add the the large list of regular trolls on this website.

    1. 3ds is an awesome handheld console and you must never have picked one up to claim that.

      Nintendo is honest with it’s fans
      they listen to what we have to say/what we want to see in gaming
      they have always been the leaders in new tech that others have copied and taken credit for, from legend of zelda bringing a new dimension to gaming to the Wii and now the wii u game pad SYSTEM. No telling what the future holds but I’m pretty sure they’ll bring more to gaming innovation as time goes by.
      They learn from each mistake and each success as well

      xbox and other systems may have the better graphics but they have no soul behind their systems and games. Nintendo does.

      I agree with the above comments that Nintendo will recover and stand strong.

      Nasty attack comments are just a sign that you’re clueless about what really matters. Go shoot your zombie prostitutes and steal cop cars and keep your idiot hater comments to yourself.

      1. you might have miss understood
        at the beginning of the comment it put : IN BEFORE this is a longer version of Inb4 and is used to make fun of common comments by using a sarcastic version of the comment. it in no way implys that those are my believes the way i wrote it (all caps, misspellings repeated) is a common way for bad trolls to write and I was using it to satire the trolls that usually appear on this website spouting nonsense like that. I’m Sorry you took it to be serious and I hope you can take it as the satire of arguments made by trolls it is not as a real comment.

  4. So to translate it into plain English:

    1. We were too busy working on the Wii U to bother with making any decent Wii games, so we lost money.

    2. We launched the 3DS with a crappy launch line up and a high price, and could have avoided all this with something like Ocarina of Time 3D or Mario Kart 7 available at launch.

    3. We’re in a recession.

    Makes sense to me.

    1. You do realise it costs money to make a product right? Thats why they lost some money, they were making the wiiu and still are. They werent lazy

    2. 1. they just released many wii games in 2010-2011
      2. they let 3rd party get a head start but was a partner mistake, why do u think they are releasing so many Mario games on 3ds for.
      3.U dont even know the global economy? man research about that, because everyone knows that but u dont.

  5. Iwata,

    1.when in 2008 the wii was already a sucess. you should have pressure to have the wii u for at least 2011 holydays, but not, keep a year extra the wii when the bitch called third party hate it was a very big risk.

    2. The 3DS should have been $199 with either Steel diver or Pilotwings as a pack-in or with Mario 3d LAND At Launch or a troy horse, like avatar movie in 3D.

    3.that is your your hands, so excuse there.

    In general Iwata. yes was partyl your fault, was partly externalities, the economy is bad and your decission were… to little to late, heck you should control better your regional managers(Reggie hasn’t import game to the biggest market… the americas when the wii most need it, Competing in Europe when less need it).

    so in general looking forward, the Wii U looks nice, but besides Zombi U or Nintendoland, lack the ‘killer aps’ for the holidays as wii sport was.

    1. New Super Mario bros usually sells lots
      Pikmin 3 will sell to fans
      it wont be as good a launch as the wii but i think it will sell lots

    2. Once again, rushing a fucking game is not going to make anything better.

      No one wants a half-assed Mario Kart 7 or SM3DL for the sake of having it.

      1. The only logical prevention would have been to keep the 3ds in development longer as rushing games would not have helped: the games would not be up to a high standard and been reviewed poorly meaning lower sales but even if they did that they would have still had a time of losing money because of the wii u as far as i can tell there is no viable prevention of the the loss

      2. There wouldn’t have been any reason to rush the games if they wouldn’t have rushed the 3DS out the door. I mean, we even had to wait a whole month for the internet browser. The 3DS was rushed and out too early, it’s a fact which was, by the way, admitted by Nintendo themselves as well. I would have prefered waiting another month or two for the 3DS instead of having it collect dust while waiting for games worth buying. So yes, he does have a point about the 3DS not having any good games at launch.

    1. Because…
      1. 3ds homeland is japan
      2. Nintendo has complete control over japan so RPG are welcome.
      (because vita is focusing on west due to poor sales on JP)
      3. not a lot of people like handheld fps, they want it on there home console.
      4.fps will not sell well in JP whats your point?
      5.japan does not like fps so why even make one if there not going to like it, whats the chance it will succeed in west.
      6.Pokemon is a JP game and sell well in west

  6. Hm. Something as average as a loss in business, yet seems so devastating to be informed. The company’s first ever? It’s lifespan reigns throughout decades. It wasn’t on the scale of Sony’s, fortunately for them.

    I like how they’ve learned and admitted from their mishap though, it only means, hopefully, we can expect better and more vigilance for the Wii U’s launch.

  7. Hello! I just composed an e-mail to the folks at Club Nintendo. I don’t expect it to get very far. If you agree with anything I ramble about, please consider sending a similar message (or cut and paste this one) to their feedback department.

    It only takes a moment to stand up and say, “Hey, Nintendo. You seem to love Japan more.”
    And they do.

    My letter:

    The Elite Status Rewards were announced recently, and I’m sure you’ve already heard from a lot of fans who are disappointed by this year’s selection. True, Club Nintendo is a bonus service and on some level fans should be happy for anything they see here. Sadly, this is just not the case. Many members such as myself spend a lot of money on products we would not have otherwise considered had it not been for the Club Nintendo coins we would receive from completing surveys many of us feel aren’t even taken seriously. The reveal of the Elite rewards every year is a huge deal to a lot of dedicated Nintendo fans. And this year, after a lot of hard work and lots of spending in an uneven economy we get a deck of playing cards. Your diehard fans, the ones who support your systems and products and frequent Zelda news sites for even the chance at hearing of a new game are getting frustrated. Let’s not focus on E3. It was just bad. Let’s look at the deck of playing cards as a reward for spending hundreds of dollars on Nintendo products.

    A few years back Club Nintendo of Japan made available as a reward to its members a Super Famicom controller you could plug into your Wiimote. What a great idea! Surely Nintendo of America would see that retro gaming is a live and well in the USA and that a Super Nintendo controller attachment would be appreciated in America! And we get a button set. Or a deck of playing cards. Club Nintendo of America members have yet to see the golden nunchuk offered overseas as a compliment to the golden Zelda Wiimote. I assure you, Zelda fans and anal retentive folks live here, too.

    In comparison to the variety and quality of the items offered by overseas Club Nintendo sites is should be very easy to see why lifetime fans such as myself feel pretty let down by the low bar Club Nintendo continually sets for itself with its elite gifts. The idea should be to present your fans with something unique and creative that they just can’t get anywhere else. A button set? See Etsy. A deck of Nintendo playing cards? Hanfuda would have at least made more sense. It seems as if every year the decision makers at Club Nintendo of America have simply no idea what its fans want or just don’t care enough to make it happen.

    I don’t imagine my letter will get much past an auto-reply or a very kind person who really has no control over the things I’m talking about. And that’s too bad. Perhaps if I was a member of Club Nintendo Japan I would have more of a chance.


  8. It was a shame that they posted a loss last year but they’ve already recovered on the 3DS side and the Wii U will improve their fortunes even more. Leave luck to heaven.

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