Nintendo to enter health business, still focused on hardware

Nintendo CEO Satoru Iwata has presented the new strategy for the ailing game company, which includes a move into health-related products, pegged for a 2015 launch.

Details on the health venture were practically non-existent. Whatever the project is, it will not be a wearable device, it will be used “beyond the living room”, and  it won’t be in the vein of the familiar sport and fitness games on Wii and Wii U.

“I’m sure you’re thinking of Wii Fit, but this is not like anything we have made before. Looking after your health requires effort and many people quit quite soon after starting something. But we, as an entertainment company, can help people get over the difficulty of continuing their efforts in a fun way,” said Iwata.

Nintendo remains focused on their strategy of manufacturing console hardware and developing its unique range of games for the hardware. No mention of a new set of hardware was made.

The company also said their portable- and home-console architecture will be merged, suggesting that all games will be playable on either form of console in future.

Nintendo ignored calls to enter the mobile gaming market with its catalogue of gaming classics. Iwata said that mobile platforms will be used to market their products. “I’m not pessimistic about video games. We are not going to change our essential business of offering integrated hardware and software platforms,” said Iwata.

Satoru Iwata

Satoru Iwata

According to Reuters, investors were unimpressed with the strategy briefing. US$1.2 billion was wiped from the value of Nintendo’s Tokyo-traded shares in 30 minutes as the CEO made his pitch. The stock closed down 4.3% at the end of trading.

For the financial year ending March 2014, Nintendo cut its sales forecast of the Wii U console by 70% – from 9 million to 2.8 million units. Wii U Game sale projections are down to 19 million from 38 million units.

The Kyoto-based company said it earned 10.20 billion yen ($98.8 million) in the nine months to December as revenue fell 8.1 percent to 499.12 billion yen.

Iwata said Wednesday he would slash his salary in half while other members of the board will take a pay cut of between 20 and 30 percent, after announcing a 30 percent dive in nine-month profit on weak demand for its new Wii U console as gamers are enticed by cheap, downloadable games for mobiles.

Nintendo is sitting on a cash pile of $8.3 billion (±R91 billion), and it has budgeted $684 million (±R7.5 billion) for research and development in 2014. This is a record amount for the company – could it mark plans to deliver a new powerful gaming console to compete with the likes of PS4 and Xbox One? The rumours have already begun circulating: Nintendo next-gen Fusion hardware specs: rumour

Source: Reuters

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Nintendo to enter health business, still focused on hardware

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