Nintendo is open to mergers or acquisitions, says Iwata

Report suggests that recent disappointments may see Nintendo change tack

Nintendo president Satoru Iwata has suggested in an interview that the company may be open to mergers and acquisitions.

Speaking to Japanese publication Nikkei, Iwata listed a couple of strategies the company may execute in order to make good on recent failures, which has seen the company dramatically slash its annual sales forecast for the year ending March 2014.


These include loyalty schemes for dedicated Nintendo customers, different pricing structures for 'emerging countries', and a new openness to mergers and acquisitions.

"We'll change the way we sell products, by managing customer information via the Internet," Iwata said.

"We'll offer discounts to steady, regular customers. We'll cultivate emerging markets and launch new businesses in health and other areas. In an emerging country, you can expand the user base only after you offer a product line different from advanced economies in pricing.

"We should abandon old assumptions about our businesses. We are considering M&As as an option. For this reason, we'll step up share buybacks."

While Nintendo slashed its sales expectations for the Wii U from 9 million to 2.5 million last month, the company has more than $5 billion in cash reserves and owns some of the most iconic video game IP in the world.

As a result, Iwata says, the company's future prospects aren't as grim as some have feared.

"Because the entertainment industry ebbs and flows in wild swings, Mr. Yamauchi (former Nintendo president) insisted it is vital to have deep pockets," Iwata said.

"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."

Due to the company's worth, acquiring or merging with Nintendo is out of reach to any but the biggest tech corporations, including Microsoft and Apple.

This factor, coupled with Nintendo's staunch independence, means it's likely the company will purchase other companies rather than merge its business, should it choose to pursue M&A at all.


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