Iwata: Fires warning shot to staff, intends to "revive momentum of overseas operations"

Nintendo boss Saturo Iwata appears to have issued a thinly veiled warning to the company’s international management teams.

He’s a man who clearly believes in his hardware. So why is it struggling? Simple, Iwata argues – Nintendo is not selling it right. And territories in which the console is underperforming are going to need to up their game.

Having told investors that sales of Wii U progressed favourably in the beginning” of the machine’s commercial life, he went on to admit that the company has since been unable to incite enough excitement in society” and failed to maintain its momentum after the turn of the year”.

Iwata also said that Nintendo’s age-old problem of limited software releases, admitting that development delays meant it was unable to continuously supply software at the beginning of this calendar year” – a fact that has further upset our scenario for market penetration, for which momentum is the key”.

Added Iwata: Unlike in the case of Wii, it was difficult to instantly understand the appeal of Wii U, those who purchased it, although there are issues to be addressed, have shown a certain degree of satisfaction with our product value, but since its value by nature is something that takes time to appreciate and hence cannot be spread amongst society instantly, we have yet to communicate its value to the wider public.

To put it another way, we delivered Wii U to those consumers who we thought would be the first to buy it, but information has not successfully been passed on to those consumers who we think will be the next people to buy it. This must be one big factor with which Wii U could not maintain its momentum.”

As reported this morning, Iwata has also ruled out a price cut to Wii U, despite the success it had with 3DS after slashing its sale price after just six months on the market.

With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown,” Iwata insisted.

If one message is clear, it’s that Nintendo expects more from its machine overseas. Although stopping short of directly criticising his international teams, Iwata wants more. And he hints at changes if they fail to deliver.

For the next fiscal year, with the premise of the current trend of currency exchange rates, the management aim to earn 100bn or more of operating profit by reviving the momentum of our overseas operations.

As we have launched two platforms, the Nintendo 3DS and the Wii U, and among them, we have already ceased selling the Nintendo 3DS hardware below cost and will be in the harvest time for it, it is our must-do for the next fiscal year to revive the momentum of our overseas business, expand the market by exploiting the potential of our products, and therefore retrieve ‘Nintendo-like’ profits.”