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.