Nintendo considers merging with or acquiring other companies to improve business
President Satoru Iwata says "I will not deny the possibility" of completing mergers and acquisitions as a means to return to profitability.
Gaming juggernaut Nintendo has confirmed that it is open to the idea of completing mergers and acquisitions (M&As) as a means to help the company return to profitability. President Satoru Iwata made the announcement during a recent investor presentation, which was translated into English and made available through the company's website today.
"I will not deny the possibility of an M&A deal to implement this business," Iwata said. One example of a successful entertainment industry M&A deal was Disney's purchase of beloved animation studio Pixar in 2006.
His comments came in response to an investor question regarding the possibility of Nintendo establishing partnerships or acquiring other companies to boost its own bottom line. Nintendo typically blazes its own trail, so an M&A deal sounds somewhat out of place, Iwata admitted.
"If there is something that others are doing that we feel would leverage Nintendo’s strength, we will incorporate that into our business," Iwata said. "Of course, incorporating a business model in the same way as other companies is not Nintendo’s usual way, so it would depend on the situation."
Unfortunately, Iwata said he was not ready to share any details regarding its future plans for mergers and/or acquisitions. "At the moment, there is nothing that we can share with you regarding M&A deals," he said.
In addition, Iwata said Nintendo is prepared to consider "many options" with regards to licensing its stable of franchises, which includes big-name properties like Mario, Zelda, and Donkey Kong. The executive explained that these types of licensing deals do not negatively impact Nintendo's longstanding hardware-software business model and so the company has no problem moving forward with such arrangements.
"Licensing Mario in digital areas would mean that there is a possibility that Mario will appear in stamps or wallpapers for smartphones, and I will not rule out this kind of business," Iwata said. "This is because we believe that this would not be in direct competition with Nintendo’s business and would not threaten our video game platform business which integrates hardware and software."
The Nintendo investor who asked the question brought up the possibility of Nintendo opening a Nintendo-based theme park as a means to generate more revenue. Iwata didn't directly answer the question, but said, "We will flexibly consider options including those that Nintendo has not done in the past. What we will permit will depend on the matter, client, and conditions."
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