Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek


Filed under: News | Technology News


Nintendo CEO on $1.2B Stock Buyback: 'Wii U Isn't In Good Shape

Jan 30 2014, 5:55am CST | by

1 Updates
Nintendo CEO on $1.2B Stock Buyback: 'Wii U Isn't In Good Shape

YouTube Videos Comments

Full Story

Nintendo CEO on $1.2B Stock Buyback: 'Wii U Isn't In Good Shape

After another disappointing holiday season and continuing struggles to market its Wii U home video game console, Nintendo plans to buy back approximately 10 million shares, or 7.8% of its outsanding stock, in a $1.2 billion buyback (125 billion yen.)

This accompanies news that CEO Satoru Iwata will take a 50% pay cut following poor financial results.

Iwata previously cut his salary by 50% in 2011 following disappointing 3DS sales which spurred a markdown in the price of the console from $250 to $170. The Wii U has seen its own $50 price-cut, and more price slashing may be necessary to revive or salvage the console.

The Japanese game maker slashed sales forecasts for its Wii U home console and 3DS handheld earlier this month, leading to a sharp drop in Nintendo shares. Net income for the company fell 77 percent in the third quarter to 9.6 billion yen.

The stock buyback is aimed at rewarding shareholders in the absence of profitability.

In the nine months ending on Dec. 31st, Nintendo sold just 2.4 million Wii U units compared to 4.2 million Sony PS4 units sold since its Nov. 15th debut.

In fact, since 2007 Nintendo has lost 80% of its value according to Bloomberg.

The disappointing sales figures may not force Iwata to step down anytime soon, as some have urged, but the CEO is hinting at the possibility of  real change for the future of the Japanese game maker.

“The Wii U isn’t in good shape,” Iwata said. “That’s the presumption we have as we consider reform.”

On the bright side, Nintendo remains in a good position for a buyback and has the resources to plan its next move, whatever that may be.

With $8.6 billion in cash and equivalents on hand and no debt, Nintendo has room to maneuver that even its rivals may not. Despite excellent PS4 sales, Sony remains bogged down by a lackluster electronics division, with Moody’s downgrading the company’s credit rating to junk status recently.

Nintendo may be facing a crisis now, and there may be no bright future for the Wii U, but Nintendo’s financial position is not as precarious as many of these numbers would have us believe.

Nintendo faces an uphill battle in 2014 as it continues to struggle both against Sony and Microsoft, as well as the growing mobile games market. Many analysts and critics are urging the Mario creator to bring their first-party IPs to mobile, claiming the company has been too slow to adapt to a changing industry.

Whether that move would save Nintendo is up for debate.

I would pin the likelihood of Nintendo abandoning its hardware business as very low for the time being, and certainly filled with risk. Without abandoning hardware, a serious move into mobile seems doubtful.

As dismal as all of this sounds for the game maker, one miss with the Wii U does not mean the company has no future in proprietary hardware and software. No matter the lure of mobile in the short-term.

Follow me on Twitter or FacebookRead my Forbes blog here.

Source: Forbes


You Might Also Like


Sponsored Update


More From the Web

Shopping Deals


<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




blog comments powered by Disqus

Latest stories

Jennifer Aniston tasted Jimmy Kimmel&#039;s Wife’s Breast Milk
Jennifer Aniston tasted Jimmy Kimmel's Wife’s Breast Milk
The Friends starlet, Jennifer Aniston shared some very personal matters with the press recently. They included tasting her male friend Jimmy Kimmel's wife’s breast milk! Jimmy Kimmel's
Gwyneth Paltrow facing Lawsuit
Gwyneth Paltrow facing Lawsuit
The famous actress and creator of a website named Goop, Gwyneth Paltrow, is facing a lawsuit by a man who claims she plagiarized his creative phrase. And she is also concerned about her ex-husband’s new relationships.
Ashlee Simpson celebrates Evan Ross Birthday Bash
Ashlee Simpson celebrates Evan Ross Birthday Bash
The pop starlet, Ashlee Simpson celebrated her fiance’s birthday bash and also wore a special hat later on in the style of Mary Poppins.
iPhone 6 from Apple: Where to Next?
iPhone 6 from Apple: Where to Next?
With the arrival of the iPhone 6, the question for the execs at Apple Incorporated is: where to next?

About the Geek Mind

The “geek mind” is concerned with more than just the latest iPhone rumors, or which company will win the gaming console wars. I4U is concerned with more than just the latest photo shoot or other celebrity gossip.

The “geek mind” is concerned with life, in all its different forms and facets. The geek mind wants to know about societal and financial issues, both abroad and at home. If a Fortune 500 decides to raise their minimum wage, or any high priority news, the geek mind wants to know. The geek mind wants to know the top teams in the National Football League, or who’s likely to win the NBA Finals this coming year. The geek mind wants to know who the hottest new models are, or whether the newest blockbuster movie is worth seeing. The geek mind wants to know. The geek mind wants—needs—knowledge.

Read more about The Geek Mind.