Nintendo is stuck between the past and the future of gaming

Nintendo, which posted a 30 percent drop in profits, is undeniably in a tough spot right now.

How tough, exactly? According to the Associated Press, company president Satoru Iwata has said he’ll take a 50 percent pay cut as a way of taking responsibility for falling sales of Nintendo products, including the Wii U console and hand-held Nintendo 3DS.

Legendary game creator Shigeru Miyamoto and another high-ranking director will also take a pay cut — 30 percent — and seven board members will cut their paychecks by one-fifth, the report said.

The actions of the board members and executives may be surprising, but the losses themselves are not. Nintendo had already indicated it was disappointed with its sales earlier this month when it drastically slashed its sales outlook for the Wii U, Wii and 3DS. The company, which has put a heavy emphasis on promoting family-friendly games, has not only had to compete with console makers Sony and Microsoft but also smartphone and tablet makers such as Apple and Samsung, which have taken over much of the gaming market. Or, put another way, Nintendo is stuck between the gaming past and the gaming future.

There are more gamers than ever today — according to the Entertainment Software Association: The number of regular gamers in the world broke the 1 billion mark for the first time in 2013. It just happens that a lot of those gamers are picking up smartphones and tablets to play games instead of controllers.


The Nintendo Co. logo is displayed outside the company's offices in Tokyo, Japan, on Tuesday, Jan. 28, 2014. (Tomohiro Ohsumi/Bloomberg)

Sony and Microsoft have figured out a way to keep the really hard-core gamers on consoles: Both companies sold more units of their new consoles in two weeks than Nintendo did all quarter. But, despite plunging profits, Iwata has eschewed moving Nintendo games onto the next big platform — going as far as to say that the firm isn’t interested in putting its games on smartphones at all.

In a statement to Engadget, the company said that there are “no plans” to Nintendo software on smartphones, although it is open to looking for ways to better promote its games on mobile gadgets.

In a way, it’s easy to understand where Nintendo stands.

Hardware is an integral part of the company — look no further than the GameBoy. And while the Wii U, launched in 2012, has certainly failed to gain the foothold the firm needs, it’s the only real console flop that Nintendo’s ever had. The Wii, in fact, broke records at its launch as the fastest-selling console in history. Even previous consoles, such as the GameCube, may not have beaten Sony and Microsoft in the market, they did make money.

What may actually be most troubling out of Nintendo’s earnings, then, is that sales of it’s market-leading 3DS, which has helped Nintendo weather Wii U losses, are also softening. Without that cushion, Nintendo will likely have to move fast to either come up with another hit like the Wii or take a hard look at what its future should be.

Related stories:

Nintendo’s painful quarter spells real trouble for company

At CES, upstarts in gaming industry show off some promising gadgetry

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Hayley Tsukayama covers consumer technology for The Washington Post.
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