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Nintendo: Improvements to hardware distribution needed

Iwata admits that shortages in Europe and the US had negative impact on business

Nintendo president Satoru Iwata has said that his company needs to improve hardware distribution in Europe and the US and put an end to retailer inventory shortages.

Speaking during a financial presentation following the release of Nintendo's latest financials, Iwata said: "In January this year, I explained to you that the sales of Wii hardware in December 2009 renewed the monthly historical sales record by a large margin, according to NPD.

"As a result, however, Wii console and Wii Fit Plus with Wii Balance Board, whose transportations from the manufacturing facilities to the retailers take longer, have suffered from serious inventory shortages.

"In the United States, since it takes a long time for us to deliver our products to the retailers, when an inventory shortage takes place, it significantly impacts the business momentum. This is one of the areas we need to make improvements."

Iwata added that Europe too had suffered stock shortages at the start of the year.

"Also in Europe, Black Wii hardware experienced an inventory shortage in January and February, except in the UK. Although we had some black Wii inventories for the UK market, due to the different power plug configurations, we were not able to flexibly reallocate the supply. This is another area in which we must make an improvement," he stated.

Nintendo's fiscal 2010 profits dropped by 18 per cent - a drop that the company attributed to the price reduction in Wii hardware, fewer strong Wii releases over the first half of the year and the appreciation of the yen.

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Kath Brice