Nintendo planning massive share buyback as Wii U flops

By on January 29, 2014, 2:30 PM
nintendo, wii u, stock, shares, buyback

Nintendo is planning to spend up to 125 billion yen ($1.2 billion) to buy back as many as 10 million shares. The decision comes after a lackluster holiday season that saw casual gamers shun the Wii U in favor of smartphone and tablet games while serious gamers opted for faster systems from Microsoft and Sony.

Such a move might be detrimental to lesser companies, but not Nintendo. The company has managed to pile up about $8.6 billion in cash and equivalents and even more impressive, they have zero debt. As such, they could technically afford a couple more years of losses, but it’s clear that a new strategy is in order after the failure of the Wii U.

That new strategy is expected to be revealed on Thursday during a press conference held by Nintendo president Satoru Iwata. The executive is expected to discuss a new strategy for using smart devices to help launch a turnaround. The company previously ruled out the possibility of licensing franchise characters like Mario and Link for online games and smartphone applications but all we know for sure is that the Wii U is in bad shape.

Sumito Takeda, a Tokyo-based analyst for UBS AG, said it is apparent that the Wii U will never gain traction as a successful platform. Instead, it’d be better to use resources for the next major product instead of trying to further push the failed console.




User Comments: 24

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treeski treeski said:

For consumers, it would be best if Nintendo sold its franchises or changed to a game developer, with no hardware. Mario, Zelda, Donkey Kong etc. should all be cross platform, with new single player and multiplayer online games.

1 person liked this | ikesmasher said:

If nintendo just made a normal console for a super competitive price (it doesnt need the hardware that XB1/PS4 have), I would be all over it. So would millions of other people.

JC713 JC713 said:

I hope Nintendo brings ROMs to iOS and Android. Now that is where the money is at.

cmbjive said:

For consumers, it would be best if Nintendo sold its franchises or changed to a game developer, with no hardware. Mario, Zelda, Donkey Kong etc. should all be cross platform, with new single player and multiplayer online games.

I don't know about selling their franchises (that'd be suicide), but I would love to see Nintendo give up hardware and go multiplatform.

2 people like this | TrueBooleanFals TrueBooleanFals said:

I hope Nintendo brings ROMs to iOS and Android. Now that is where the money is at.

...No...

Have you used an emulator on a smartphone, yet..? Drains battery way too fast, controls on touch screen are just pure suck, even if you set them to a physical keyboard like I did on my MotoDroid1. I could barely play *GBA* games, but could do NES/GB/GBC games because that only required six buttons.

You just cannot get any decent games on these things... even tablets.

*EDIT* changed 'NDS' to 'GBA'

1 person liked this | Sniped_Ash said:

For consumers, it would be best if Nintendo sold its franchises or changed to a game developer, with no hardware. Mario, Zelda, Donkey Kong etc. should all be cross platform, with new single player and multiplayer online games.

I don't know about selling their franchises (that'd be suicide), but I would love to see Nintendo give up hardware and go multiplatform.

Yeah, this. Those franchises are absolutely gold and the biggest reason to buy Nintendo hardware in the first place. There's no way they're going to give that up.

It's kind of sad watching the Wii U debacle unfold because it was we could see it coming a mile away. When the gaming press came back from that first E3 and couldn't actually explain to gamers what the Wii U actually is and why they should buy one, it was clear that Nintendo was making a horrible mistake.

treeski treeski said:

Yeah, this. Those franchises are absolutely gold and the biggest reason to buy Nintendo hardware in the first place. There's no way they're going to give that up.

That's why I say I want Nintendo to dump their hardware. Either sell off the company completely (either in a lump sum or individual franchises) or simple transition to a software/services only company.

Guest said:

@ treeski

Nintendo have always been rather successful with their hardware. It was only the Wii U where they had issues so I still don't see why they should do what you want them to do (sell off the company completely (either in a lump sum or individual franchises) or simple transition to a software/services only company).

They also don't really have any debt as this point so what they're currently doing by reanalyzing the situation and what should be done next to fix the problems is a better way to do. What you want to do should be done as a last resort if they really fail after fail. But they're not.

treeski treeski said:

@ treeski

Nintendo have always been rather successful with their hardware. It was only the Wii U where they had issues so I still don't see why they should do what you want them to do (sell off the company completely (either in a lump sum or individual franchises) or simple transition to a software/services only company).

They also don't really have any debt as this point so what they're currently doing by reanalyzing the situation and what should be done next to fix the problems is a better way to do. What you want to do should be done as a last resort if they really fail after fail. But they're not.

Well, like I said in my first post, I think it's what would be best for consumers... not necessarily the company :p

1 person liked this | Guest said:

Does that mean no more games coming out for Wii U? what about all the people who brought one? surely u cant just forget about them.

1 person liked this | TomSEA TomSEA, TechSpot Chancellor, said:

@ treeski

Nintendo have always been rather successful with their hardware. It was only the Wii U where they had issues so I still don't see why they should do what you want them to do (sell off the company completely (either in a lump sum or individual franchises) or simple transition to a software/services only company).

They also don't really have any debt as this point so what they're currently doing by reanalyzing the situation and what should be done next to fix the problems is a better way to do. What you want to do should be done as a last resort if they really fail after fail. But they're not.

I'm not sure that the Wii U has "issues," it's just the same thing as a Wii but with marginally better graphics and a goofy controller. People didn't want to pay twice for the same machine. Also, the novelty of the Wii Remote controller has worn off as well as all the family games that attracted non-gamers to the original Wii. They're all playing Farmville or Candy Crush now. Nintendo just wasn't very innovative with the Wii U in either its hardware or software for what was considered a next gen release.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

If the Wii U is a flop, why buy back the shares? Are the share holders legally protected?

Adhmuz Adhmuz, TechSpot Paladin, said:

Does that mean no more games coming out for Wii U? what about all the people who brought one? surely u cant just forget about them.

Who are all these people you are refering to? I know almost everyone has the original Wii, mostly collecting dust or used for playing SSB. The Wii U? Don't know anyone who bought one, even friends with young children stayed away from it. If Nintendo is going to have any chance in the next console wars they need to think of something fast, a new console with similar hardware specs released just in time for Christmas with a lineup including all their big tittles would give Sony and Microsoft a run for their money. I wouldn't buy it, however I'm not a fan of anything Nintendo other than the original Gameboy, but again, I know a lot of die hard Nintendo fans that would without hesitation.

ikesmasher said:

What would be best for consumers would be if nintendo offered a really good console for half the price of the PS4 and xb1. The primary price causer of the Wii U was the tablet controller...and nobody really buys a wii u for that, they buy it for the franchises. The 3ds is successful because its affordable, non-gimicky (for the most part), reliable, and has a fantastic game library. The wiiu, if you think about it, has a couple of great exclusives but thats it.

Guest said:

You know what killed the WiiU? Not releasing the games that people want!!! I know personally at least 3 people who would have bought one if they had come out with a new Super Smash like they were supposed to. People buy consoles for the games that are on them and WiiU's selection is rather weaksauce.

St1ckM4n St1ckM4n said:

Just ditch the freaking gamepad and slash he cost of your console by $100-150! Do this as well as release Mario Kart + Smash Bros + Donkey Kong, with Zelda not far off. Only then will people take WiiU seriously. [By the way, I own one.]

JC713 JC713 said:

...No...

Have you used an emulator on a smartphone, yet..? Drains battery way too fast, controls on touch screen are just pure suck, even if you set them to a physical keyboard like I did on my MotoDroid1. I could barely play *GBA* games, but could do NES/GB/GBC games because that only required six buttons.

You just cannot get any decent games on these things... even tablets.

*EDIT* changed 'NDS' to 'GBA'

I have not buy my friend plays some sort of Pokemon game and he says its ok. You may be right.

JC713 JC713 said:

Just ditch the freaking gamepad and slash he cost of your console by $100-150! Do this as well as release Mario Kart + Smash Bros + Donkey Kong, with Zelda not far off. Only then will people take WiiU seriously. [By the way, I own one.]

Dude the gamepad is beast. You can play games off-screen.

2 people like this | ikesmasher said:

Dude the gamepad is beast. You can play games off-screen.

it may be beast, but it should be an optional accessory. The cost it adds to the console makes it not even considerable to me as much as id want one.

BlueDrake said:

Does that mean no more games coming out for Wii U? what about all the people who brought one? surely u cant just forget about them.

That's what has Nintendo between a rock and a hard place. They have dedicated Wii U users along with casual users, so if they up and drop the console? It would look bad on them for dropping it after a few years, not to mention any devs who 'might' be working on something. Way to burn both your customers and third parties, so it's looking to be a wait and see period.

Find any means of pushing the console, but in the background work on a possible replacement. They have been living in a closed loop bubble, pretty much since the start and it worked wonders for the most part. Also been the innovation company for the most part, what has Sony or Microsoft offered that's sparked a new way of gaming?

They have to come out of their bubble world, and actually take to heart what would work. That doesn't mean throw down hardware, that's pretty much all about power. It hasn't been how Nintendo focused on anything, nor is it the way of winning a console war. Least my general feeling of things, you're basically trying to brute force control the market with power.

Obviously it's split between Sony and Microsoft because of course, both have their own exclusives among other things. 'Hardcore' gamers and I use the term loosely, just want the next best thing and it's really silly. "Hooray that consoles are closing in on PC hardware, except not really as PCs will continue to march forward kind of deal."

Nintendo is looking at things as a means of solution, don't count them out because of a stumble like this. They also have to play out the console, until they have a means of not burning consumers. People still pick up the console so what would you do, if you bought the console on the last day of support? Just out of the blue were told: "We're sorry but we decided to shift our focus from the Wii U, and onto a new console we have planned to hopefully be what people want."

Hopefully people take that a bit to heart, before recommending they give up everything. It's not in anyone's best interest to do it, least of all customers because it won't work out. I'm sorry but mobile market + Nintendo games? Never will happen outside the dedicated handheld market, until there's some logical means of playing it. Phones and tablets are not logical for these games, and I don't want to see them dumbed down for casuals.

tipstir tipstir, TS Ambassador, said:

Wii Black WiFi features are not longer working. Tells me thanks. Gone is the Weather and World news. Does this feature work on Wii U Black. I still won't buy the Wii U. If it was $99 maybe. Mini Wii Red seems to be selling good local Walmarts here sold out at a price at $89 bucks sure goes quicker than $299.

Guest said:

Just ditch the freaking gamepad and slash he cost of your console by $100-150! Do this as well as release Mario Kart + Smash Bros + Donkey Kong, with Zelda not far off. Only then will people take WiiU seriously. [By the way, I own one.]

I'd buy one in a heartbeat if that happened.

Guest said:

Mini Wii Red seems to be selling good local Walmarts here sold out at a price at $89 bucks sure goes quicker than $299.

I only bought one of these because it included Mario Kart as well as a wii remote and nunchuck which are still worth a good penny. (I have one of the original wii's that you can play gamecube games on) The console itself is very basic and I didn't even realize it had no internet capabilities until too late.

John Pombrio John Pombrio said:

Stock buybacks are sheer manipulation of the share price in order to benefit only large stockholders and company officials. It does NOTHING for the company except spend money that could be used better elsewhere. ALWAYS a bad sign when a company does this.

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