After a bleak financial report regarding the company’s last nine months, Nintendo president Satoru Iwata said he believes the company “should abandon old assumptions” about its businesses and is considering mergers and acquisitions as a possible solution, according to a report today from VG 24/7.
In a question and answer session with Japanese business news website The Nikkei, Iwata said Nintendo would be increasing its share buybacks as they consider mergers and acquisitions as an option to turn around the ailing video game company.
In the interview, Iwata suggested that Nintendo wouldn’t be as hurt by the poor performance in the last year, especially the flop of the Wii U console, as Nintendo has financially planned for the company’s lean times.
“We built up cash reserves when earnings were strong,” Iwata said. “Because the entertainment industry ebbs and flows in wild swings, (former president Hiroshi Yamauchi) insisted it is vital to have deep pockets. Without savings, we could not have recovered from a single failure in game systems. Even now, we can afford many options because of our robust financial standing.”
But Iwata did acknowledge that Nintendo has become complacent in terms of how they fit within the video game industry today.
“… We've been preoccupied with a fixed idea of what a game should be like,” Iwata said. “The game industry is at a turning point amid new developments like the rise of smartphones.”
Later in the interview, Iwata said quarter earnings reports don’t really fit with how Nintendo operates, as even when the company plans on attaining a goal with a product “sometimes things don’t go well,” and it ends up upsetting shareholders.
However, Iwata said where Nintendo is today is due to the stock market, and he doesn’t “want to turn to a management buyout” because they company is inconvenienced at the present.