At the 74th annual general meeting of shareholders on July 3rd, 2014, the Nintendo Board of Trustees faced a wide range of difficult questions from from shareholders. Two questions in particular stand out, in light of a recent three month earnings report release on July 30th, 2014. The report showed that Nintendo recorded a -$96 million dollar net income (Nintendo lost $96 million dollars). Also, Nintendo’s net sales dropped by 8.4% in comparison to last year’s sales.
These two questions are the following:
These two investors were fairly upset over the dismal fiscal performance by the storied video game company. Tatsumi Kimishima, Managing Director of Nintendo, emphasized Nintendo’s strategy to turn the company around. It comes down to the following:
- Take advantage of the huge customer base for the 3DS and publish more software titles for the device.
- Communicate the value of the Wii-U GamePad, emphasizing the new gameplay style that the controller offers.
- Release more quality video games to encourage more sales of the Wii-U.
- Continue exploring ways to use IP to make a profit. (Source: Click here)
Nintendo expresses confidence in this strategy, projecting $5.74 billion in global sales and $390 million profit for 2015. There are a number of high-profile games coming soon, including Bayonetta, Hyrule Warriors, and Legend of Zelda which have the possibility of motivating more gamers to purchase the Wii-U. One thing is coming clearer. Unless Nintendo can turn their economic situation around, the stock investors may begin to demand Satoru Iwata to step down.