Financial Sun Sinking on Nintendo?

Super Mario may be pretty tough when it comes to beating up assorted Koopa Troopa’s but it seems that he’s fairly redundant when it comes to defeating accountants.  The banes of the boardroom have done what a thousand different tiny animals couldn’t, and brought Mario – or rather Nintendo as a company – to its knees.  But despite severe losses, the executive management at the Kyoto-based corporation maintain that they will not be releasing their products on smartphones and tablets, effectively turning their backs of an estimated 1 billion extra devices and a huge slice of revenue.

The main problem with opening the familiar titles up to phones and tablets is that the company would also effectively have to relinquish at least some control on their creations, and allow everyone’s favourite Italian plumber to be played on rivals devices.  That seems like a stretch too far for the senior management and the general consensus is that things would have to get a whole lot worse than they currently are for radical change to occur.

Nintendo briefly lost a whopping fifth of their share value in an ongoing assault that threatens to seriously affect the company before rallying again and recouping some market confidence.  Their projected 100 billion yen (£582 million) profit has been reduced to a 35 billion (£204 million) loss, which is pretty eye-watering for almost any company to weather, and is seen as a consequence of refusing to bow to market forces.  As previously reported on UGP, the Wii U has struggled to attract new customers who are seen to want the functionality of a game device but with all the added extras that come as standard on even the cheapest tablets.  That misunderstanding of consumer needs has punted the company products to something akin to over the neighbour’s fence and it’s going to take some nerve to retrieve them.

The Wii U sold only three quarters of their projected sales and the 3DS has performed badly outside of Japan.   Rather than analyse the market around them, senior executives made mumbling commitments to secondary considerations such as in-game transactions and subscription based payment models rather than increasing accessibility to the games that people still love to play.

Nintendo has always prided itself on being an innovator rather than following the crowd in a “me too” kind of way, but unfortunately striking out on your own to try to create the next big thing – a situation that Nintendo ironically handled very well with the launch of the Wii – will only happen if your market research is spot on, and Nintendo currently seem to be way off what the market wants and are suffering for it.

Nintendo roughly translates from Japanese to English to mean “Leave Luck To Heaven”; with the way that their revenue is plummeting, maybe they should change the corporate name to “Jinsokuna nanika o suru”  – that’s “Do Something Quick” to you and me.