A very interesting interview with Mr. Iwata. Make sure you check it out at the link below.

Earlier this year Nintendo recorded an operating loss for the first time in its history, what would you say the key reasons were for that and what have you been doing to react?



First of all it’s very unfortunate that we had to record a loss and I feel personally responsible for that. My goal is that this will be the only time we record a loss. I have to say, there are three factors that led to us recording this loss.  First we were, in terms of the console lifecycle, in a console transition phase, so the fact that sales shrank during this period is actually quite normal.

The next factor is that when we launched the Nintendo 3DS last year it lost momentum after launch, so we had to take measures and cut the price in order to avoid a failure toward the end of the year, which meant we were selling Nintendo 3DS units at a loss; these two problems we will solve this year.

The third factor, which is actually outside of our range of influence, is that the global economy situation is unstable and the exchange rate is very disadvantageous for us with the Yen being so strong. Obviously we have no influence over this, so we need to find a set-up at our end that will still allow us to make profit under these circumstances.

Do you feel that extra competition from the likes of Apple, with the iPad and iPhone, have also taken away from the handheld market that Nintendo, and perhaps Sony, have controlled for so long?



I don’t think this is a central factor, I think it’s much more about our lack of ability to release software in a timely matter that will motivate people to go out and buy our gaming hardware.   But obviously smartphones and tablets have changed the environment that we operate in and we can no longer offer some kinds of games experiences that couldn’t also easily be offered on a smartphone, so we need to differentiate and offer something exclusive.

We’ve seen this in the past, as personal computers became cheaper people were saying ‘we don’t need more home consoles then do we?’ Then, with the advance of mobile phones, people were questioning the need for dedicated gaming machines and now with smartphones again. Under the conditions I mentioned earlier, I think if we can offer exclusive entertainment that cannot be replicated on other devices then we’ll have the chance to survive.

 

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