Iwata: 3DS Sales Take Priority Over Profitability

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Nintendo is in a whole mess of trouble for its current fiscal year, and understandably, this has Nintendo’s investors a little bit nervous. In a recent Q&A session, one investor asked Nintendo president Satoru Iwata where his priorities lie during the current fiscal year and the fiscal year ending March 2013: does Iwata give precedence to Nintendo’s bottom line, or 3DS expansion?

This is usually the point during a conversation with investors where we would expect a struggling president of a struggling company to deliver a canned response full of buzz words, but Iwata made a bold decision in this particular instance – he told the inquiring investor flat out they Nintendo‘s main goal was 3DS sales in the coming year-and-a-half:

First of all, as far as the current term, ending in March 2012, is concerned, we have decided that driving the sales of Nintendo 3DS hardware is our main priority, and in a sense, we can say that by doing this, we have sacrificed our profitability for this fiscal year. We came to the conclusion that we needed to make that bold investment, instead of focusing just on this term’s profitability, so that we would be able to make the Nintendo 3DS an important foundation for Nintendo for years to come.

Iwata says that, come the fiscal year ending March 2013, Nintendo expects the profitability of the 3DS to have improved greatly, allowing it to shift focus back to its bottom line. It’s a bold and risky move, but it’s one that I agree Nintendo needs to make. It needs to make the 3DS profitable as soon as possible, even if that means it reports its first annual loss in 30 years. Not only would this mean an extra source of income for the company, but also that it’ll have something to fall back on if Nintendo experiences the same issues with the Wii U.

Hopefully Nintendo can turn the 3DS into something profitable soon and come back with an annual profit for the fiscal year ending March 2013. I love Nintendo and I don’t want to see it go the way of Sega, especially because it has said in the past that it probably wouldn’t continue making software if it left the hardware business. That means no more Mario, no more Metroid, and no more Zelda. Frankly, that isn’t a world I want to live in.