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Nintendo Considering "New Business Structure"

Wii U has continued to underperform, and it's causing internal reflection at the company.

It's been a rough day for Nintendo. We don't usually post financial news on Giant Bomb, but this is big.

Nintendo is forecasting a $250 million loss for the current fiscal year, ending March 31, and has slashed its sales forecasts for Wii U from nine million to 2.8 million.

This news was followed by a press conference with Nintendo president Satoru Iwata, which was attended by Bloomberg. At the event, Iwata provided a potentially revealing quote about Nintendo's future:

"We are thinking about a new business structure,” he said. “Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.”

Iwata is not expected to step down from his position as Nintendo's leader.

Nintendo could be a very different company a year from now. But how? We'll have to see.

Patrick Klepek on Google+
332 Comments
Edited by BabyChooChoo

Dayum.

Edited by Budwyzer

Nintendo should just go the way of Sega and just make games for other platforms.

Posted by GunstarRed

Considering.

Posted by HammondofTexas

I know this is cliche, but why doesn't Nintendo either A) Put all of their previous gen. games on the eShop, or B) Seriously put Pokemon on iOS.

Posted by ottoman673

Even if they have a massive war chest, holy fuck that's a huge hit to take. Only making 31% of your projected console sales in a fiscal year, with that big of a projected loss?

...as much as I have fallen out of love with what Nintendo's done lately, this really sucks to hear. You never truly want to see anyone fail, but hopefully this will serve as the necessary wake up call to get shit back in gear.

Posted by Seedofpower

Finally. You are doom to please no one by trying to please everyone.

Posted by aquacadet

The good news is Nintendo has developers know how to make great modern games for their IPs unlike Sega. Part of me would be happy to have Nintendo games come out on non-Nintendo consoles, but it would be the end of an era.

Edited by Pixeldemon

It's happening! Nintendo pinball tables!

Edited by patrickklepek

@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

Look how well that worked out for Sega!

Staff
Posted by huser

@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

People keep saying that, but relative to their 90's heyday, is Sega even particularly relevant? They bought Atlus so they have that going for it, though let's check back in a few years. I have more confidence that Nintendo could make that transition more successfully (simply having a better track record), but I have no problem if they still made handhelds.

Posted by AngriGhandi

Nintendo's hand inches ever-so-slightly closer to the "break glass in case of emergency" box with the Pokemon MMO inside.

Posted by ejiehi
Posted by Fobwashed

I think Nintendo really doesn't have a target audience anymore. Kids these days that are into video games know that they want the new XB1 or PS4 over a WiiU. I know that my 9yo nephew certainly asked for one of those over a WiiU by name. Also, parents and grandparents having grown up with gaming should also be somewhat more aware of what's what as well. I feel like Nintendo's console exists only via existing Nintendo fans and I don't see them really making many new ones. Rough.

I grew up with Nintendo and it'd be sad to see them bow out of console hardware but to be honest, I'm way more into their games than the peripherals. I love my 3DS tho. I read news that the new Mario game was outsold by Knack.... crazy.

Online
Posted by Maitimo

I suspect this will not be the massive sea change that many are expecting, so nobody should be patting themselves on the back over their Nintendo doom-saying yet. Wait and see what actually happens.

Something needs to be done about WiiU, sure, but it's not like the 3DS is in quite the same place.

Edited by GnaTSoL

Everyone seems ecstatic.....

I definitely don't wanna see Nintendo turn into a remnant of it's former self like Sega. Nintendo must evolve and adapt once again.

Posted by UltimAXE

Release Smash Bros and I'll buy your goddamn Wii U thing.

Posted by Mars

Good

Edited by LiquidPrince

I know this is cliche, but why doesn't Nintendo either A) Put all of their previous gen. games on the eShop, or B) Seriously put Pokemon on iOS.

Putting their franchises on other systems would greatly reduce the need to buy one of their systems. If I can play Pokemon on my smartphone, why would I want a 3DS?

Edited by SpecialKiz13

As a person who is currently facing the prospect of losing all of my eShop purchases because my DS has developed a fault, and Nintendo having such backwards anti-consumer policy regarding this kind of matter (all purchases locked to a system rather than a general account) it is very hard to have any sympathy for Nintendo.

The WiiU seemed like a bad idea right of the bat, having such a niche target audience. On balance it would probably be a shame if Nintendo pulled out of the console business (more choice for the consumer = better competition) but this has seemed inevitable at this point.

Edited by DannyHibiki
Online
Edited by JamesJeux007

As a proud WiiU And 3DS owner, this is a huge fucking bummer. Expected, but a bummer still. The WiiU is a great console with no games.

Posted by ottoman673

@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

Look how well that worked out for Sega!

To be fair, Patrick, the level of competency of developers at Nintendo is a bit higher than it is at Sega, and they've managed to grow with the times.

It's not a completely invalid argument, but there's no way that Nintendo would bow out behind the behemoth that is the 3DS. [although its projections were slightly cut, according to NPD it was the highest selling piece of hardware this year] At least not yet.

Posted by PJ

@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

Look how well that worked out for Sega!

They are still around. If they would have continued making hardware the company would be dead today. So yes, it did work out well.

Posted by TadThuggish

Yo, the developer side of Nintendo is amazing but the publisher side is full of fucking idiots. Don't know how that can be covered up by "it's different" or "they're Japanese" or anything.

Posted by WalrusBrigade

Yep. This pretty much sucks.

I hope they don't decide to go down the SEGA route. That hasn't been good for SEGA, and there isn't much cause to think it would be good for Nintendo either. Putting games on iOS is a race to the bottom for pricing (especially the games they make) and putting them on other consoles forces them to be a part of someone else's schedule.

Nintendo had a good software year last year, but didn't have the console base to utilize it. They need to find ways (like what they were trying with the 2DS) to get people their console cheap, to get indie games on their console and use that as a way to sell the games they are good at on their own schedule.

Posted by AHappyPanda

@ultimaxe said:

Release Smash Bros and I'll buy your goddamn Wii U thing.

Pretty much.

Posted by aquacadet

The WiiU is a great console with no games.

Doesn't that make it a not great console? I think Jeff's comment about picking up a wiimote rang too true. It made it feel super old.

Edited by Generic_username

@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

Look how well that worked out for Sega!

Truth.

Posted by DirtyAstronaut

I would love to be able to play Mario 3D world, but I'll likely never buy a WII U. On the other hand I really like my 3DS.

Posted by alanm26v5

I'll take a dedicated handheld system over playing on a smartphone any day, so I really hope they keep doing that. Also I hope they keep doing big console games, but I don't know if they do enough of them to justify a separate hardware purchase anymore.

Edited by NoelVeiga

Guys, I don't hear "we may put out our games on iPhones", I hear "the 3DS is doing great but we don't seem to know what to do on home consoles, what if we just make a phone?"

Also, don't go nuts. Nintendo has a ton of money in the bank (a ton more than 250 mill, anyway). They could take this hit for several years in a row while they restructure and roll something different out for the next generation, or cut the Wii U short in 2 or 3 years to go full mobile. This is Iwata firefighting, what they come up with doesn't need to be a Sega-like move to software. Sega was in a lot of pain and in debt. Nintendo still has money and they have the best selling hardware platform of the year, which they sell for profit.

The thing is, analysts seem obsessed with the whole "get out of hardware" thing to solve Nintendo's issues. They keep parroting the whole "causals and handheld users are moving to mobile", even though it's patently not impacting the 3DS. Nintendo may yet do what they say just from shareholder pressure, but... well, it would probably be a mistake.

Posted by Sergotron

This is super scary, but can be really exciting. I was surprised to see such a disconnect with what they were doing, and what consumers wanted.

Posted by PurplePartyRobot

I hope the WiiU finds better support. It seems to me right now that the WiiU is just a black hole for Nintendo that just sucks up more money than the 3DS can print out. Problem is they can't just drop support for that thing, and the software they are putting out, though pretty good, isn't enough to move millions of units. It puts them in a weird situation in terms of what to do about it. I guess looking into smart device development might help them feed that black hole some more.

Posted by Honkalot

I would buy the hell out of their consoles if it didn't mean missing out on most AAA titles.

Edited by alwaysbebombing

I'm happy to see they are going to consider a different business direction. After posting that 250 million loss, their stocks dropped around 22% for the week. Nintendo has been on a steady decline for the past two weeks in trading and I was wondering if the stock was going to be labeled "risky."

EDIT: I should also mention that big companies post losses all the time, but it's not really to big a deal, more often it's "we just didn't make as much money as we thought." But this, this is a real loss.

Posted by Slag

I feel like panic buying a WiiU to raid the virtual console while I'm sure it still exists.

Edited by BlackLagoon

@patrickklepek said:

Look how well that worked out for Sega!

I guess all you see is their reduced western presence, but in Japan Sega is actually doing quite well. Phantasy Star Online 2 has several million users and is very profitable, and they've got other successful franchises like Hatsune Miku and Yakuza. They're hardly some kind of failed and impoverished publisher if that's what you're imagining - they did have the cash make the winning bid on a debt laden Atlus after all.

Posted by joshwent

I give Nintendo all the props in the world for still not having a F2P Mario game on the App Store rife with disgusting micro transactions. They're a sometimes misguided company, but at the very least they haven't resorted to the gross shit that most IP holders in their position would.

Edited by Atwa

I think people are way to dramatic about Nintendo's current situation. Yeah, the results were not good but coming off Wii and DS of course their predictions would be high. The 3DS is doing really well all things considered, the current situation of the Wii U just overshadows that. Nintendo will not go third party, not for a long time, they have so much money in their vault that they could go through years of commercial decline without being in trouble. Look at the 3DS, it started out terribly and doom was spelled out for it as well. Why wouldn't the Wii U be able to do the same? Surely if Nintendo stays dedicated and keeps releasing good games eventually it will pick up? Smash Bros, Mario Kart and Zelda are all big enough to push systems. I am kinda excited about the situation, as a Wii U AND 3DS owner, it might force Nintendo to try something completely new which I am all for. Despite being very satisfied with both systems.

I would be more worried about Sony, yeah the PS4 had a fantastic start but where are the games? Most are so far off so I wouldn't be surprised if that console starts falling off in terms of sales dramatically.

Edited by chrissedoff

@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

Look how well that worked out for Sega!

It didn't work out for Sega because they don't make good games and they never really have, except perhaps for a brief moment on the Genesis. I stopped caring about Nintendo's games a long time ago, but most people are still happy with the software.

Posted by dizzuncan

@specialkiz13: I completely agree with you abought Nintendo's horrible digital ownership shenanigans, but as someone who just spoke with Nintendo very recently about this, while complaining to their customer service about that very problem, I learned that Nintendo actually has the records of the eShop purchases you made, saved in association with the device's serial number on their end. So if you replace your DS and call support, they can probably move the purchases to the new device. It's even easier if you send the device in for repair (which is probably cheaper than buying a new one). But yeah, it's so stupid that those are your options.

Posted by Duncecap

The 3DS has been my favourite gaming platform of the past year. Loved a bunch of games and put many hours into it while sitting infront of a number of regular consoles & PC. If nintendo were to restructure and put more emphasis on high quality 3DS titles I would be very happy.

The WiiU is a bust. Nobody sells them, the section in my local GAME store in the UK has more space dedicated to 10 year old PC games about barbies, horses and the sims than it does to WiiU. It has a terrible name, and costs way too much money to boot.

At this point the only thing that could sway me would be if they sorted out the "play your big screen games on the controller screen" by upgrading the wireless range and resolution.

Edited by alwaysbebombing

@atwa said:

I think people are way to dramatic about Nintendo's current situation. Yeah, the results were not good but coming off Wii and DS of course their predictions would be high. The 3DS is doing really well all things considered, the current situation of the Wii U just overshadows that. Nintendo will not go third party, not for a long time, they have so much money in their vault that they could go through years of commercial decline without being in trouble. Look at the 3DS, it started out terribly and doom was spelled out for it as well. Why wouldn't the Wii U be able to do the same? Surely if Nintendo stays dedicated and keeps releasing good games eventually it will pick up? Smash Bros, Mario Kart and Zelda are all big enough to push systems. I am kinda excited about the situation, as a Wii U AND 3DS owner, it might force Nintendo to try something completely new which I am all for. Despite being very satisfied with both systems.

I would be more worried about Sony, yeah the PS4 had a fantastic start but where are the games? Most are so far off so I wouldn't be surprised if that console starts falling off in terms of sales dramatically.

If Nintendo's War Chest had billions, then I would agree with you. But to a company that large, hundreds of millions isn't as much as it seems. You have to look at Net Cash on Hand, not just Assets. It's pretty easy to cook through a hundred million faster then most think. Especially posting losses like that. I'm not trying to be super doom and gloom, but with a steady stock sell-off, and a massive dip today, ready cash dries up faster as investors pull out.

Posted by Gyrfal

@blacklagoon: Going from an international hardware manufacturer and software developer to primarily a publisher for the smallest of the three major gaming markets is a pretty significant dip in the profile of a company.

Edited by BaconGames

Nintendo is and has been a weird company in a weird position since the N64 really, but especially so after the GameCube. The only way I can see them changing drastically would be either so much more success in a different approach or a dry coffer.

Now this isn't to say that Nintendo is doing great either. In fact, some have pointed out what I consider is their worst problem, their stangant audience. It seems that who they're selling to, and what their cultural cache means these days, is legacy and long time fans. This works for hard core strategy developers and niche publishers but for a company like Nintendo they can't afford to stay in one place with the "hardcore" which isn't even all that interested like they used to be. What I think this means is mobile is the future for Nintendo, and not just phones but possibly an even bigger focus in the portable game market as well.

I think the biggest change we'll see out of Nintendo in the near future is a potential shift away from developing a new console. Personally, with the direction that computing and content consumption is going, a new console doesn't sound like something any company would be investing in as a sure bet so it's more likely than ever that the Wii U is the last traditional game console out of Nintendo.

Posted by Pete0r

In hindsight, giving Luigi his own year was a mistake.

Posted by mrcraggle
@budwyzer said:

Nintendo should just go the way of Sega and just make games for other platforms.

But do we really want that? Sega are just another publishing house at this point, sitting on classic ips while cranking out crappy Sonic games every year instead of putting money into games people actually want.

Posted by megabite10164

@ejiehi: That's quite possibly one of the shittiest pins to ever exist, brought to you by the same people who made the abysmal Shaq Attack.