Nintendo president Satoru Iwata has admitted that, after three years of operating loss, the company must return to profit within the next fiscal year.
That will see Nintendo “prioritise restoration of the balance of revenue and expenses,” having suffered from the strong yen, and pouring resources behind launching Wii U and 3DS.
“Please let me comment on the operating losses for three consecutive years,” Iwata began in his discussion with investors. “Two and three fiscal years ago, the extremely strong yen and transition between our video game platforms mainly put our revenue and expenses off balance. For the last fiscal year, under the improved foreign currency exchange situation, we made various efforts to retrieve ‘Nintendo-like’ profits.
“We, however, could not achieve these results as the sales of our main hardware and software products ended up being well below our forecasts, and we incurred temporary one-off expenses from the purchase of technology that we did not expect at the beginning of the fiscal year. I feel deeply responsible for this and I need to fulfill my responsibility by recovering the momentum of our business.
“We would like to retrieve ‘Nintendo-like’ profits as soon as possible. However, the success of a video game platform business depends greatly on its momentum, and it inevitably takes time to rebuild the business once the platform has lost its momentum.
“Posting an operating loss for the fourth fiscal year running is something unacceptable. We see this fiscal year as a time to prioritise restoration of the balance of revenue and expenses.”
In looking toward recovery, Iwata shared that Nintendo hope to significantly “harvest” the 43 million-strong 3DS installed base throughout the next fiscal year. Software sales for the handheld have seen considerable growth, and they hope to continue to ride that momentum with Super Smash Bros., Pokémon Omega Ruby, Pokémon Alpha Sapphire, and Tomodachi Life, as well as third-party software such as Monster Hunter 4 Ultimate, Yokai Watch 2, Persona Q: Shadow of the Labyrinth and Taiko no tatsujin Don to Katsu no jikuu daibouken.