Michael Pachter, the Wedbush Securities analyst who has frequently questioned Nintendo CEO Satoru Iwata’s policies has chimed in over the weak financial report Nintendo issued today. To put it bluntly, he has once again called for Nintendo to go Third-Party and to acknowledge they have a problem.
The entire conversation can be found on Twitter, but put together looks like this:
“Nintendo cut their forecast sharply today. Missed their profit forecast by over $1 billion, cut Wii U units to 2.8 million from 9 million,” Pachter tweeted. “The Wii U has clearly not resonated with consumers. 3DS selling “fine”, but down around 50% from average DS levels last decade. Nintendo software is still great, will continue to be. However, if SW (Software) remains proprietary, sales are limited when they sell fewer HW (Hardware) units. The first step to recovery is to acknowledge the problem. I have not seen anything from Mr. Iwata that acknowledges that there is a problem.”
Nintendo exiting the console race has long been suggested by analysts, who are not paid to make predictions. They are paid to look at market data and then advise shareholders what to do based on the data they have.
Non-surprisingly, transitioning to Third-Party is something that Nintendo CEO Satoru Iwata, who has refused to step down as CEO, covered during the conference.
“We are thinking about a new business structure,” Iwata explained to the investors. “Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.
“We cannot continue a business without winning. We must take a skeptical approach whether we can still simply make game players, offer them in the same way as in the past for ¥20,000 or ¥30,000, and sell titles for a couple of thousand yen each.”