Iwata says mergers and new game studio acquisitions are a possibility
Satoru Iwata has announced several new directions for Nintendo over the last few days, especially since the investor conference that led to Iwata taking direct responsibility for the failure of the Wii U to gain traction after a full year of being on the market. Now Iwata has announced several new directions, including non-wearable fitness equipment. In addition to new directions, it looks like Iwata may be looking to beef up Nintendo’s development studio catalogue, as in a recent interview with Nikkei, Iwata discussed the idea of acquisitions and mergers.
When asked about the history of his company, Iwata had this to say:
“…Mr. Yamauchi (former President Hiroshi Yamauchi) often said “Shitsui-taizen, Tokui-reizen,” meaning that we should act regally when things are bad, and be calm when things are going well.” Were he alive now, he would tell me to carry an air of confidence. We built up cash reserves when earnings were strong. Because the entertainment industry ebbs and flows in wild swings, Mr. Yamauchi insisted it is vital to have deep pockets. Without savings, we could not have recovered from a single failure in game systems. Even now, we can afford many options because of our robust financial standing.”
Iwata goes on further to say that Nintendo as a company will change the way they market products by listening to consumer feedback from the Internet, as well as offering discounts to loyal customers. He also says Nintendo has plans to offer products in emerging countries that will differ from pricing in advanced economies, which means we could see more products like the Nintendo 2DS shipping elsewhere in the world.
Iwata summed up the interview with this statement:
“We should abandon old assumptions about our businesses. We are considering M&As [mergers and acquisitions] as an option. For this reason, we’ll step up share buybacks.”
What do you think about Iwata’s statements?