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Nintendo: Iwata takes pay cut as profits slump

Author:
Jonathan Lester
Category:
News
Tags:
3DS, Financials, Nintendo, Wii U

Nintendo: Iwata takes pay cut as profits slump

Wii U burns a hole in their pockets

Nintendo has revealed their latest sales data for the period between April-December 2013, and as they suspected, it makes for a sobering read. As their profits slump by 30% compared to last year, coupled with continued sluggish sales of the Wii U that might not even hit their brutally culled sales projections, Iwata and the Ninty top brass have accepted a 50% pay cut in an act of contrition.

It's not all bad news, though, as the company is still just about hanging onto a net profit overall, while the 3DS and key software are selling like nobody's business.

Nintendo recently prophesied all manner of financial doom and gloom, cutting Wii U sales projections from 9 to just 2.8 million for this financial year. Unfortunately, their latest figures suggest that they're still short of this figure by 400,000 units, having only sold 2.48 million in the nine months before Christmas. To put this in perspective, both the Xbox One and PS4 managed to sell considerably more consoles worldwide since November.

“The Wii U business as a whole was not able to recover fully [and] still has a negative impact on Nintendo’s profits owing mainly to its markdown in the United States and Europe, and sales of software, which has high profit margins, did not grow sufficiently," Iwata explains in the report.

The upshot of this is that Nintendo's profits have plummeted by 30% year on year to a relatively slim $59 million - which they believe will eventually lead to a loss by the end of this financial year. Satoru Iwata has pledged to cut his wages in half, while even Shigeru Miyamoto and other exectutives will see their salaries slashed by between 20%-30%.

Look: I like the Wii U. I do. It's a surprisingly hardcore console with some cracking exclusives crafted with rare quality, and a breath of fresh air from all the recycled shooters clogging up other platforms. As a gamer, not a pundit, I'd much rather talk about games than sales. But with the best will in the world, Nintendo are still struggling to get the message -- and the all important games -- out, especially since they face competition from newer, more powerful machines. Partly due to a woefully ineffective advertising campaign and a slow trickle of must-have titles, not to mention the utterly pointless 'Year Of Luigi' that managed to enthrall absolutely no-one whatsoever. Whether the arrival of Mario Kart 8, Super Smash Bros (also available on 3DS, mind) and other games can reverse their fortune remains to be seen.

As mentioned, though, Nintendo's latest report does have a more positive message. Zelda: The Wind Waker HD and Super Mario 3D World both sold over 1 million units, which is relatively impressive considering the size of the audience, while the 3DS is still doing rather well indeed. Lifetime sales of their handheld now stands at 42.74 million units, with sales of Pokemon X and Y hitting a monstrous eleven million across both versions. Animal Crossing: New Leaf clocks in at 3.5 million sales worldwide, while the excellent Zelda: A Link Between Worlds broke 2.18 million since its November launch.

The 3DS has, in fact, practically managed to keep Nintendo afloat - leading to only an 8% decrease in total revenue all told. Sadly, it appears that the Wii U is still a bit of a financial black hole - and we'll find out the full extent of the damage in April.

I personally feel that Nintendo needs to reposition the Wii U as a more niche proposition; a cult console for connoisseurs, perhaps, that could find itself a place with gamers sick and tired of the annualised multiplatform titles on other platforms. Relaxing the region lock might be a good place to start. As might, erm, getting more third-party exclusives signed up. Plus, doing some advertising might be a good idea at some point...

Add a comment7 comments
Tsung  Jan. 29, 2014 at 11:38

"put this in perspective, both the Xbox One and Wii U managed to sell considerably more consoles worldwide since November."

Correction... That should be PS4? otherwise it makes no sense!

Last edited by Tsung, Jan. 29, 2014 at 11:38
Late  Jan. 29, 2014 at 12:12

...I personally feel that Nintendo needs to reposition the Wii U as a more niche proposition; a cult console for connoisseurs, perhaps, that could find itself a place with gamers sick and tired of the annualised multiplatform titles on other platforms...

I suspect it's (unintentionally) already become that.

JonLester  Jan. 29, 2014 at 12:16

@Tsung: Yes, a thousand times yes, and a thousand apologies. Corrected.

@Late: Heh. But I think that Nintendo needs to own it, and go forward by thinking about it as another Gamecube rather than another Wii.

DivideByZero  Jan. 29, 2014 at 12:45

Just been looking at the top 10 games for the Wii-U on Play.Com - while it's nice to not see all the usual fitness and dance junk, there is nothing particularly wow there. By now, there should be some games that make you want to buy the console.

Factor in the fact that this is well underpowered compared to the PS4 and XO so if you want to look at getting a game released on every console, this is probably not the best way to play it.

Last edited by DivideByZero, Jan. 29, 2014 at 12:47
Anarchist  Jan. 29, 2014 at 16:21

I personally feel that Nintendo needs to reposition the Wii U as a more niche proposition; a cult console for connoisseurs, perhaps, that could find itself a place with gamers sick and tired of the annualised multiplatform titles on other platforms


Instead of the same annualised releases of Super Mario X, Donkey Kong Y, Mario Kart Z or Zelda: W ?

At least the other games developers attempt to make new content, instead of just remaking the same four games over and over and over again.

DivideByZero  Jan. 29, 2014 at 17:05

True dat!

I guess you could add Pokemon X and Y to that list ;)

Anarchist  Jan. 29, 2014 at 22:19

True dat!

I guess you could add Pokemon X and Y to that list ;)


Could have done, forgot about those little buggers!

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