Nintendo posting a loss four years running is “unacceptable,” says Iwata

Posting an operating loss for a fourth fiscal year running would be absolutely “unacceptable,” Nintendo president Satoru Iwata has said.

Nintendo reported a 46.4 billion yen operating loss ($456 million) for the year ended March 31, 2014.

“Please let me comment on the operating losses for three consecutive years,” said Iwata. “Two and three fiscal years ago, the extremely strong yen and transition between our video game platforms mainly put our revenue and expenses off balance.

“For the last fiscal year, under the improved foreign currency exchange situation, we made various efforts to retrieve ‘Nintendo-like’ profits. We, however, could not achieve these results as the sales of our main hardware and software products ended up being well below our forecasts, and we incurred temporary one-off expenses from the purchase of technology that we did not expect at the beginning of the fiscal year. I feel deeply responsible for this and I need to fulfil my responsibility by recovering the momentum of our business.”

However, returning to the days when money was filling corporate bank accounts won’t be straightforward, says Iwata.

“We would like to retrieve ‘Nintendo-like’ profits as soon as possible. However, the success of a video game platform business depends greatly on its momentum, and it inevitably takes time to rebuild the business once the platform has lost its momentum.”

He concluded: “Posting an operating loss for the fourth fiscal year running is something unacceptable. We see this fiscal year as a time to prioritize restoration of the balance of revenue and expenses.”

Iwata’s comments indicate that he may resign – either voluntarily or be pushed – should Nintendo fail to post an operating profit for the current fiscal year which ends March 31, 2015.

Source: Nintendo investor relations