Wednesday, July 16, 2014
Nintendo Considering Merging With Another Company

Nintendo Considering Merging With Another Company

Full acquisition by another firm is also an option.

In what is considered as shocking news, Nintendo president Satoru Iwata has said that the company will not rule out the option of being merged with another company or being completely bought out, either.

Speaking to respected Japanese outlet, The Nikkei, Iwata said: “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.”

It’s the very reason why Nintendo made a $1.2 billion stock buyback, a move that got a favorable reaction from the market, as Nintendo stock soared 8.2 percent per share.

Especially of importance and very disconcerting in tandem, was Iwata’s assertion that they couldn’t predict Nintendo’s financial results:  “Quarterly earnings reporting is not a good fit for Nintendo,” Iwata says. “We don’t know in advance how much of a hit a product can be,” he said.

Yet, even though Nintendo is in a world of trouble financially, investors shouldn’t expect the company to go private, Iwata insists, adding that it was the stock market that caused them to get wealth in the first place, so abandoning the public now is out of the question.

My take:

I knew Wii U was in trouble, but I didn’t know how badly the console’s failure has been hurting Nintendo’s profits. However with Iwata’s comments, it seems Nintendo is in more trouble than previously thought, and a merger or acquisition at this point wouldn’t surprise me.

Via Nikkei and Reuters.

About Ernice Gilbert

Ernice Gilbert here. Founder and Editor-In-Chief of Gamesthirst. Thanks for stopping by, make yourself at home!