After posting low sales of its Wii U console, Kyoto, Japan-based Nintendo Co is being pressured to think about exiting the video game machines business as player demand slows, Bloomberg reported. The report said Nintendo is set to drop in Tokyo today after it posted a 17% decline in its shares traded in the US. This is the company's sharpest fall in 12 years.
On January 17, the Japanese company reduced its forecast for yearly sales of the Wii U by over two-thirds after predicting an operating loss for the 12 months that ended in March. Wii U has only been in the market for about a year.
Los Angeles-based Wedbush Securities Analyst Michael Pachter told Bloomberg that Nintendo President Satoru Iwata should concede that he has lost his bet with Wii U and wind down production. Instead, he should make Nintendo's iconic software characters like Super Mario and Zelda available to mobile devices like tablets, smartphones and consoles that have ruined his approach. Pachter added that Nintendo should get out of hardware completely.
Pachter said Iwata needs answer for the Wii U flop. "He will be under pressure to make dramatic changes. If he can do so while remaining in charge, more power to him, but they need to make some changes," he said.
However, Iwata is not quitting his post and intends to guide the company as it makes its transition. So far, he has not offered Nintendo franchises to rival console systems or mobile devices. He also said that he is thinking of altering the company's business model but did not provide details, the report said.
In a press conference, Iwata 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."
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