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Iwata takes 50% pay cut and takes "responsibility" for 3DS

Fri 29 Jul 2011 2:12pm GMT / 10:12am EDT / 7:12am PDT
PeoplePublishing

Nintendo president halves salary whilst other execs cut 20, 30%

Nintendo president Satoru Iwata has announced that he's to take a fifty per cent pay cut in order to help ameliorate the financial problems currently affecting the publisher.

Iwata announced the news in a press conference which took place in Tokyo this morning, reports Kotaku. Nintendo made the comments public almost immediately and have promised a full transcript of the Q&A.

Announcing the cut, Iwata said he took responsibility for the 3DS and its poor sales and was willing to make a fiscal sacrifice.

"For cuts in fixed salaries, I'm taking a fifty percent cut, other representative directors are taking a 30 percent cut, and other execs are taking a 20 percent cut," Iwata told attendees.

Attending the event was Tokyo-based Macquarie Securities analyst Dave Gibson. Reporting back to press afterwards, Gibson claimed that Nintendo had acknowledged a missed opportunity in its refusal to make an early price cut for the Gamecube, and wanted to avoid the same mistake, but admitted that the reduced price would mean that Nintendo no longer made money on 3DS sales.

That will undoubtedly change as the economies of scale make the 3DS easier and cheaper, but the decision to sell hardware at a loss is a significant move for Nintendo, which ordinarily ensures that profit is made on each individual unit sale.

17 Comments

Patrick Williams
Medicine and Research

93 61 0.7
I really don't understand what Nintendo is thinking. If they want to make money, they need to release games for their consoles. Their refusal to release games in the US and the dearth of games for the 3DS is a huge issue.

Posted:2 years ago

#1

Terence Gage
Freelance writer

1,288 120 0.1
I do agree with Patrick's comments; at the moment the main issue facing the 3DS is its lack of software. How about investing in some new franchises (new being the operative word here; not just the same old Pokemon, Mario Bros., Metroid, etc) and getting some good games out there to justify the 3DS tech and be great standalone software? I have heard that the 3DS's sales so far are more or less on a parity with the DS's first four months on sale, and that took a little while to pick up speed and really become an essential piece of hardware, so while their estimates may have been too high there is still room to grow and claw back their market share, but ultimately it's all about the software, and many people still need convincing as to the whole 3D movement.

Posted:2 years ago

#2

Kingman Cheng
Illustrator and Animator

945 161 0.2
The lack of software for the 3DS is just unimaginable for a company who has always done well on the handheld market. I'm glad he's done the honorable thing though with his own salary.

Posted:2 years ago

#3

Jake Clayton

54 0 0.0
Smart move by Iwata to cut his own salary after what's happened.

But they need to release more 3ds games in the uk and usa.

Posted:2 years ago

#4

PATRICK CHUDE
Studying MSc. Information Systems

13 0 0.0
Personally, i think they shouldn't have launched with such a high price. And it is because of that i didn't get it. I would rather spend my money on a Vita -- playing Uncharted on the London Jubilee Line (while trying to keep it from getting nicked..lol), yes please :D

Posted:2 years ago

#5

Greg Wilcox
Creator, Destroy All Fanboys!

2,131 1,038 0.5
Nintendo released the 3DS about a year or so too soon and it shows. Without a top franchise or third party title in the launch lineup (Street Fighter is popular, yes, but a handheld fighting game isn't great in terms of solid control) , no online store at launch, games that were glorified tech demos or not exactly great in 3D (which is a GIMMICK, no matter what anyone says at the end of the day) and so forth and so on, the system was doomed to under perform (except to the diehards who line up for ANYTHING Nintendo offers).

It would have been nice for Nintendo to maybe poke around BEFORE they did R + D on the thing and check history (and not just their own failure with the Virtual Boy). 3D was, is and will always be a fad that lasts about 3-5 years then goes away once people get sick of it. Period. No matter the tech advances, a gimmick is a gimmick, glasses or no glasses. Even Augmented Reality, which is very cool, can only go so far once it gets so much into the mainstream that it's no longer seen as exciting.

3D reached its peak with Avatar (a film I didn't like because of the plot - the visuals were stunning) and it's been going downhill since everyone decided they wanted to do the same thing, but on a shoestring or in a way that made it too damn pedestrian. Of course, any 3DTV/monitor or other device maker will argue otherwise. But after 47 years of life and 39 of that spent gaming, I think I've seen more than enough of this cycle of "Hey, Lookit!" come and go trendiness to know when something's going to die off.

Next up, the current casual bubble that some are thinking will kill off retail and/or expensive games. I got my stale popcorn and good seat for this one... it's taking longer than it should, but it'll happen. Not that I'm happy about any of this crap, mind you. I just wish some companies would pick the brains of guys like me before they spend all that money on something that's going to die on the vine...

Posted:2 years ago

#6

Wafik Salim
Studying Video Game Design (Art)

5 0 0.0
It was launched too close to the DSI and DSI XL, I agree it needed at least a year more. A lot of parents buying this for their children aren't going to buy it when they had just bought the other.

On top of that, most people think the 3DS is DSI with 3d support, they don't realise it's more of a comparison of NES and SNES. There is so much misinformation about this console out there , the fact it looks near identical to past DS's doesn't help.

Posted:2 years ago

#7

Stephen McCarthy
Studying Games Technology

205 0 0.0
at this point it may as well be a dsi with 3d support... I playing more DS games then 3d's games....

Posted:2 years ago

#8

Klaus Preisinger
Freelance Writing

1,031 910 0.9
The 3DS is a highly specialized gaming device with few games made by select developers paying for the privilege to release games and charging customers quite some money.

The iOS mobile platform (Android too) is a jack-of-all-trades computer platform where anybody can toss anything on the market and see if it sticks.

The consoles were able to suppress the early PC (home computer) dominance by being easier to set up and having subsidized hardware. Prices for games were roughly the same. Established manufacturers were always heavily attacked by new competitors having a more open 3rd party publishing policy. See a pattern emerge for handhelds yet?

The 3DS is neither easier to set up, nor cheaper than the Apple/Google competition, nor are the games cheaper, nor perceived to be better. And for every $40 game connoisseur, there are 100 Angry birds idiots; do the math. Nintendo needs to move out of Dinosaur country, open their platform wide, make sure there is a good online venue to sell software and let any game developer go buckwild crazy, from EA to Johnny's basement games. Who cares if there are $1 games, as long as they sell and Nintendo gets 30%. iOS does not mean people spend less, it just means people spread it around more. That is only bad news if you thought your games were the second coming of Christ in digital form, but 30% of anything is still 30% of everything. Ask Apple's $40 billion stash of money about it.

Imagine a proper handheld device, with real precision controls and the software library of iOS and Steam combined. Not just gaming software, but all the crazy stuff from the App store as well. That is where you want to be today. That is where Apple already is and they profit off games even though they do not give a rats ass about decent controls. That is the huge gamble Nintendo has to make right now. $40 Pokemon games will sell anyway, those players will still be there, but the mass audience is rapidly shifting away to the "iPhone" experience, which is eerily similar to people dropping quarters into an arcade machine in the 80ies with Apple operating the arcade. I guess everything is diminishing returns after all.

Posted:2 years ago

#9
Grab the Market share. Exclusivity is the remit of the past

Posted:2 years ago

#10

Dennis Wan
Game Designer

18 0 0.0
I thought Iwata would be committing salary-seppuku with the current financial results. A Japanese associate I know claims he worked for free till he managed to pull his company out of the red (referring to my friend, not Iwata). But then again, I wonder if Nintendo top brass earn mainly from their salary, or from company profit %. I know some of them draw a pittance in terms of salary, but get huge returns from the profits, as well as have their daily expenses on the company tab. So taking a 50% pay cut doesn't really hurt them much... ;)

Edited 1 times. Last edit by Dennis Wan on 1st August 2011 2:04am

Posted:2 years ago

#11

Alfonso Sexto
Lead Tester

765 574 0.8
Now if only our politicians where like this, Spain would be out of the economic crisis in weeks! ;)

Posted:2 years ago

#12

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
BP is part of the greatest oil spill disaster in history, they get an indirect bail out, executives get bonuses, company has record profits, thousands of employees get axed.

Nintendo has a quarterly loss because of unfavorable currency exchange rates and lower than expected hardware sales of the 3DS and all the top executives take pay and bonus cuts. No bail outs, no mass employee layoffs....never seen another company of this size show such humility in penance for arrogance. Much less reward themselves for it.

Posted:2 years ago

#13
People seem to massively under-estimate how hard it is to create AAA quality software: the 3DS is the first 3D dedicated console from Nintendo, whereas a lot of the early DS titles were much simpler 2D games.

IMO, Nintendo planned this to give 3rd parties a great launch window to launch their software, and make some money - but they would have never imagined the exact opposite to happen. All Nintendo had to do was launch with a single massive title (Mario Kart or Mario) - that would have set hardware sales going, which would have resulted in a lot more 3D part software arriving. But they didn't - and it now feels like a "soft" launch, that is only now starting to build some momentum (almost a year after launch!).

Posted:2 years ago

#14

Laura Greenfield
Studying Biomedical Science

12 0 0.0
Nintendo need to realise that they have to get it right the first time. Everything they release, console-wise, they know it isn't perfect.
Wii - then releasing the wii motion plus which you HAVE TO BUY to make it work
DS - too big and ugly, so they release the DSlite. Then the DSi and the bigger DS (my goodness)!
now 3DS, it clearly isn't perfect. I bet they have something which will have a longer battery life, or a more perect 3D screen, or it will be 5 times as big and make your coffee in the morning. I don't know.

This shows the beginning of the end. In 10 years, I'll be surpised if they are still an independent company.

Posted:2 years ago

#15

Terence Gage
Freelance writer

1,288 120 0.1
Laura - "This shows the beginning of the end."

A bit of an exaggeration, perhaps?! If Nintendo have shown one thing in the past 6 or 7 years it's that they're adaptable and can create and/or lead market trends. Just because this is probably the first significant bump in the road for them in at least 10 years does not mean the company is now a fading light by a long stretch.

Posted:2 years ago

#16

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
Laura, financially speaking, Nintendo makes more profit in one single fiscal year than in all the fiscal years of Sony's games division, MS's games division and Sega combined. $25 billion in billion in actual profit (not revenue, profit) in the past decade against your tiered product launch problem says they'll be just fine in 10 years.

Posted:2 years ago

#17

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