Nintendo Company President Satoru Iwata will announce a second year of annual losses tomorrow, accumulating almost 19 billion yen. Iwata, who became president of the Japanese company in 2002, has pledged a 100 billion yen – approximately $1 billion – profit for this financial year, but analysts say he’ll fail to reach the goal. However, Nintendo are never one to be backed into a corner, as can be seen with their determination to raise sales by their recent US advertisements and their expansion into the social markets.
Averages compiled by Bloomberg have recorded that Nintendo have lost 18.7 billion yen over the tax year, ending on March 31. But this year, Iwata wants to aim big, stating that it is his ‘personal commitment’ to see the 100 billion yen profit in sales achieved.
He said: “First of all, what I mean by committing to earning an operating profit of 100 billion yen is that this is going to be reflected in the financial forecast of the next fiscal year unless the expected foreign exchange rate situation changes. Otherwise, I would not have used a word such as ‘commitment.’
“I believe my job is to establish as promising a situation as possible to accomplish this aim. From this perspective, for Nintendo 3DS, it is vital to create similar momentum as we see in Japan in the overseas markets. So, the point is to launch several key titles seamlessly abroad to change the sales momentum of Nintendo 3DS itself, and then to create a cycle where hardware sales soar and its software sells well.
“As for Wii U, there will not be any key titles at the beginning of the year, so even though it will take some time, starting from this summer when the software lineup is enriched, we will promote our platform and aim to change the sales momentum dramatically.”
The Wii U has seen a dramatic decline in sales, partly due to a string of software delays that Iwata admitted were crucial to winning over consumers. And with tough competition on the horizon from Sony and Microsoft consoles, Nintendo’s president will have to stick to a firm resolve. What do you think about the second year of profit losses and should Iwata be pledging such a large profit for this year?