Nintendo CEO Taking Huge Pay Reduction Due to the Wii U

[Spaceman Spiff]

Wow, those Nintendo execs are pretty cool. They're taking a hit instead of laying employees off/cutting employee wages. It's nice to see some decent people running a big business.

 

[VG_Addict]

More of this "Nintendo could make more money going third party" shit? Nintendo makes money off of their hardware. Could someone please tell me exactly how Nintendo could make more money going third party than they can on first party?

Now I don't think Nintendo is doomed. They could very likely stick around for a few more console generations wasting away as they bring up the rear. Hell, Nintendo has pretty much been in this exact position since they put out the N64. This position of having a successful handheld system and a stagnant home console devoid of third party support is old familiar territory dating back to 1996. Sure, they hit it big with the Wii but that was lightning in a bottle and it won't likely be happening again.

Nintendo still made a profit on the N64.

Also, to people who say Nintendo should put their games on mobile, that would cannibalize their handheld sales.

It's like nobody on the internet knows anything about business.

 

[Gizen]

And this is one of the reasons I so desperately wish that Nintendo would do well and succeed. Because this kind of behaviour, the attitude of putting the rest of the company and all your lower-ranked employees ahead of yourself, of acknowledging that your pay is probably pretty high and can be cut to save some money while not making your employees with lower wages suffer... This is behaviour that is good and just and should be rewarded. And it's not even the first time he's done this before.

 

[spartandude]

Well good on them for taking the pay cuts to guys at the top rather than making it harder for those at the bottom. Too often we see the opposite happen.

My advice to Nintendo at the moment is to massively expand their E-shop. Start putting GBA games on 3ds and Gamecube on the Wii U. Not only does that increase revenue over both consoles but it also helps to justify getting the Wii U if we know that there are more games on there even if they are old games.

 

[VG_Addict]

Apparently, Nintendo still posted a net profit.

 

[9thRequiem]

"How would you think CEOs in U.S. companies would react if they had to take a pay cut whenever their companies underperformed?"

Game developers would actually be forced to make higher quality products, treat their fans better, take responsibility for their own actions, not fire or close down talented studios because the annualized game they were forced to make in record time with non-stop crunch and overtime underperformed, add value to their games instead of nickle-and-diming them, and probably earn the goodwill of their players rather than disgruntled disdain, loathing, and constant criticism.

But I guess winning "Worst Company in America" for EA could've told you that as well.

It's a sad state of affairs, but most of what you mentioned wouldn't cause under performance. Some of the worst offenders when it comes to annualized games that nickle-and-dime their players for DLC on top of $60 price tags end up being those that make the most money, and therefore result in a bonus for the CEOs. Unfortunately, people are very quick to forget negative opinions when the next one comes around and they end up buying it anyway.
If anything, it would make things worse - there's already a reluctance towards risky or niche games and new IP, and a trend towards game breaking micro-transactions and overpriced DLC. If the CEOs thought it would reduce how fancy a yacht they could buy that year, there's no way we'd get some of the better offerings from the AAA market.

EA may have won worst company in America, but for a company that's so widely hated, it's doing pretty well in sales ...

 

[Vivi22]

Is Iwata the one to blame for the Wii U's failings? How would you think CEOs in U.S. companies would react if they had to take a pay cut whenever their companies underperformed?

Shitty... but this is fair. They tend to get bonuses for high performance.

Captcha is spying again: like a boss

The world would start to be a much better place if western CEO's would actually be held responsible for their failures. At least a few companies that were bailed out when the recession hit used bailout money to pay themselves bonuses right after. When the government has to keep your business from going under, you should be fired, not paid a bonus.

I'll always have respect for the execs at Nintendo right now for having the balls to step up and take responsibility. They did it when the 3DS had a rough start and they're doing it again now. And these guys aren't being paid tens of millions to begin with. They should be held up as an example of how to be a good company executive.

 

[VG_Addict]

"How would you think CEOs in U.S. companies would react if they had to take a pay cut whenever their companies underperformed?"

Game developers would actually be forced to make higher quality products, treat their fans better, take responsibility for their own actions, not fire or close down talented studios because the annualized game they were forced to make in record time with non-stop crunch and overtime underperformed, add value to their games instead of nickle-and-diming them, and probably earn the goodwill of their players rather than disgruntled disdain, loathing, and constant criticism.

But I guess winning "Worst Company in America" for EA could've told you that as well.

It's a sad state of affairs, but most of what you mentioned wouldn't cause under performance. Some of the worst offenders when it comes to annualized games that nickle-and-dime their players for DLC on top of $60 price tags end up being those that make the most money, and therefore result in a bonus for the CEOs. Unfortunately, people are very quick to forget negative opinions when the next one comes around and they end up buying it anyway.
If anything, it would make things worse - there's already a reluctance towards risky or niche games and new IP, and a trend towards game breaking micro-transactions and overpriced DLC. If the CEOs thought it would reduce how fancy a yacht they could buy that year, there's no way we'd get some of the better offerings from the AAA market.

EA may have won worst company in America, but for a company that's so widely hated, it's doing pretty well in sales ...

EA posted a $308 million loss, actually.

http://www.computerandvideogames.com/447157/ea-fyq3-financials-report-308-million-loss/

 

[O maestre]

I don't like Nintendo, but I applaud their CEOs decision to not punish their workers for their mistakes. As others have written I wish other corporate leaders in other industries would have so much integrity.

That being said they should be crticized for their rigid thinking, and refusal to adapt or attempt to anticipate the market by diversifying their customer base.

As it is I can't think of who I wouldn't recommend the WiiU to anyone but a Nintendo fan. I have no doubt that they will survive but at what size and capacity is uncertain. Many gamers, including myself even discount it as a counter product to the Xbone and PS4, and that is a stigma that is hard to escape.

They need to stop targeting their fans with piles of legacy games, Nintendo fans are going to give them money regardless of what they do. No need to retire Mario, but maybe it is time to stop beating him as if he was a dead horse.

 

[Aiddon_v1legacy]

Well, this isn't exactly something new. Nintendo does this, which helps them keep their work force, and people STILL demand they fold? I support Nintendo because they personify something that has been lost in the current gaming industry: professionalism. They act like adults and don't blame others for their mistakes. Unlike a TON of other companies in gaming.

 

[O maestre]

Nobody can truly argue with a straight-face that the tech inside the Wii-U is comparable to Sony and Microsoft's offerings. I think dated technology in the machine is the true failing, since one of the main reasons the Wii-U isn't selling is because it has too few games. The reason for that, is because developers have stated that they don't want to develop for a console that is behind the times and making their latest games work on all 3 systems is almost impossible.

Sure you can blame Nintendo's marketing campaign and confusion over exactly what the console is, but without games, it'll never pick up sales. I know I'll probably be slammed for even suggesting this, but I really do think it's time for Nintendo to move away from the console market. Imagine Nintendo PC games and tell me how that would really be such a bad thing.

I can't help but feel that if they rush out another console to try and save face (and profits) and it misses the mark again, it could be the last nail in the coffin. Nobody wants to see that.

If Japan actually joined the club of PC gaming, Nintendo would just switch to that no problem. The PC gaming market would just explode with games, and pretty much gain such prominence that consoles might actually be in trouble.

2/3 of the big 3 are Japanese. If Japan goes PC gaming, so does every japanese company because Japan is all they really care about. Microsoft won't have the xbox and its entire product strategy would be deemed worthless. Nintendo and SOny would take their fanbase to the PC, and destroy the xbox at every turn. Xbox can't compete with both Sony and Nintendo exclusives on a single platform.

xbox is a trojan horse to peddle the rest of Microsoft's steaming turd pies hand made by Steve Ballmer. In fact, they wanted to use the xbox to push the under performing WIndows 8 on people. If xbox can't gain a foothold to peddle the other stuff, then Microsoft's long term investment over the last 20 years would be meaningless. Microsoft would be the laughing stock of the corporate world.

You seem to forget that Microsoft is the main factor in PC gaming, so they win OEM or not. Their lucrative hardware partnerships, like the 20+ years "alliance" with Intel, only recently has Intel been "allowed" to drop some of the exclusive support to Microsoft, which honestly seems more like long term strategy. Then there are the driver royalties that basically every hardware manufacturer is bound to.

point is M$ is an evil that is not going anywhere any time soon

 

[rees263]

I almost feel sorry for Masahiro Sakurai and his team: Nintendo NEEDS Super Smash Bros. to come out asap to boost sales. They must almost literally be breathing down his neck at this point.

Is Super Smash Bros. really going to push sales though? See, I'd imagine all the hardcore Smash fans have already bought a Wii-U for the inevitable Smash entry. They're likely the same people who bought a Wii-U at launch for the next Mario and Zelda. This might be the reason why Super Mario 3D Land didn't push console sales; The people who wanted it (the life long fans) had already bought one in anticipation.

I bought a Wii partly because of Smash Bros Brawl (they sure kept me waiting though) and I really enjoyed it, but I honestly can't remember the last time I used the Wii. I'm not rushing out for a WiiU.

There's also the issue of cost, and I know I'm not the only person who can't afford a new console right now. The last time I coughed up for new hardware was late 2010 when I bought my PC. The last time I bought a game brand new at full price was Arkham City.
Gaming is my main past time and I've had a passion for it for over 20 years but I just cannot afford to spend money on it so freely.

I would have every console if I could but I'd get a PS4 way before a WiiU and I think a lot of people are making the same choice.

 

[ObsidianJones_v1legacy]

I ducked over to Wii U Daily [http://wiiudaily.com/wii-u-games-list/] to check how many games they have since their release in November 18, 2012 [http://en.wikipedia.org/wiki/Wii_U]. To whit, they have 34 entries. Xbox 360 released plus or minus 120 games [http://marketplace.xbox.com/en-US/Games/Xbox360Games?page=2&pagesize=30&sortby=ReleaseDate] (count them yourself).

But I don't even see the library to be the problem any more. People jumped in without hesitation with the Xbox one and the PS4. For the promise of games to come. Mostly, we see developers saying "we'll never touch the Wii U" in articles. Yeah, sure, they make nice afterwards, say that they respect the system and the like, but they never ever take back their reservations about developing for the system.

I have to believe with the current Nintendo staff, they can only develop maybe around 18 IPs a year, and I'm being kind. Games like Bayonetta are not being developed by them, but that's a really rare occasion for Nintendo to have a company do that for them, it seems.

So, with thinking about all of this, I can't really say it's just the tech. The 3DS continues to trounce Vita almost everywhere in the world. I can't say it's the gimmick, because EVERYONE from PS4 to Xbox, to Vita are now trying to include touch and tablet mechanics.

I have to put the blame squarely at the feet of the developers. In short, their myopic view that they only really need to focus on Japan and Japanese sensibilities do not allow them to adopt a world view. They do not feel the need to change their tactics. The Japanese might be thrilled with just new gimmicks, but other cultures are not. The virtual isolationism that Nintendo willing puts themselves at and bets on tradition has no place in the global market place. None. This is not a world where you can be happy with just your nation's sales. You need global sales and to be able to compete with others in your market place or you'll fail.

In December of 2013, Japan had a population of 126,981,371 [http://worldpopulationreview.com/countries/japan-population/]. In contrast, the world's population in December of 2013 was 7,175,186,584 [http://worldpopulationreview.com/continents/world-population/]. So, basically, Nintendo looked at around 1.8 percent of the world's population and decided that's the only voices they really need to pay attention to.

And they are wondering why they are struggling? It is the leaders' fault that the Wii U is failing. Even to the dumb name, they made the decisions that kept them from competing. And I don't think they will listen unless new management steps in.

 

[OldNewNewOld]

Could someone please tell me exactly how Nintendo could make more money going third party than they can on first party?

The reasoning is that Nintendo makes great games but sadly you have to buy a whole new console just to play them. There are a lot of people out there who grew up playing Nintendo games on their SNES or NES or whatever who would love to be playing these new Nintendo titles but they aren't because the games don't justify buying an entire new console to play. If Nintendo made their games available on the PS4 and Xbox One then they would likely sell far and away more copies of their games. Likely enough to make up for whatever is being lost by no longer having money coming in from hardware sales.

But I don't see those games selling well enough to compensate for the lost income.

Currently Nintendo earns money on more than just the games.
1 - they earn on sold consoles.
2 - they earn more per sold game in retail stores (small part to retail, rest to Nintendo while if they sold on a 3rd party console it would be small part to retail, small part to Sony/MS and the rest to Nintendo)
3 - they earn on 3rd party licences
4 - they earn the full price from the e-shop (a part of the price + licencing fees would otherwise go to Sony/MS)
5 - they earn on 3rd party sales on the e-shop

They would also be forced to do what Sony and MS want them to do since there isn't any other option.

Nintendo could only lose after going 3rd party.

 

[RJ Dalton]

CEOs taking paycuts when the company is losing money. Only in Japan.

 

[prpshrt]

The pay cut isn't a big deal to these fellow's who have already made a shit ton of money in the past. Their lifestyles are not going to change a bit :\

 

[Weaver]

Didn't the same thing happen a few years ago?

The pay cut isn't a big deal to these fellow's who have already made a shit ton of money in the past. Their lifestyles are not going to change a bit :\

Which is exactly why it makes perfect sense to cut their pay. In America they would lay off 300 people and give the CEO a bonus.