Nintendo president Satoru Iwata has already said he won’t be stepping down amid the company’s recent poor market performance, but that doesn’t mean he and other Nintendo executives aren’t feeling the company’s pain. Nintendo has announced (as reported by the AP) that starting in February, Iwata will take a 50 percent pay cut for five months. Two high-level directors, including a legendary one Mario creator Shigeru Miyamoto, will receive a 30 percent pay cut, while seven members of Nintendo’s board will see their wages cut by 20 percent.
The move comes as Nintendo confirms what the company warned about with its heavily cut sales forecasts earlier this month. In 2013, only 2.8 million units of the Wii U were sold worldwide. That’s down from the 3.06 million units it sold to early adopters in less than three months when it launched in 2012, demonstrating a worrying lack of momentum for a system facing new competition from the likes of the PS4 and Xbox One.
On the portable side, the 3DS fares significantly better than its home console counterpart. Nintendo sold 12.7 million units of the system in the last nine months of 2013, with more than 5 million in Japan alone. However, that number sounds less impressive when you compare it to the 24.5 million Nintendo DS sold over a similar nine-month period in its third full year on the market.
This speaks more to the original DS’s record-breaking market performance than anything lacking in the 3DS sales in particular. But if we look at it as a trend from generation to generation, the downward trajectory is not encouraging.
To contrast the current dichotomy between console and Nintendo handheld, consider that a game sold to every existing Wii U owner until 2013 would still have barely half of 3DS megahit sales Pokemon X/Y, which has racked up 11.6 million sales to date. Even a mid-range 3DS game like Animal Crossing: New Leafwith 3.52 million sales worldwide, outsold Wii U in 2013.
Despite all this, Nintendo still managed to post a modest profit of ¥10.2 billion ($99 million) for the last nine months of 2013. However, that’s less than ¥14.55 billion ($141 .7 million) during the same period in 2012, and Nintendo expects it won’t be enough to make the entire fiscal year, which ends in March, profitable. That would be the third consecutive fiscal year loss for a company that made consistent profits decades before this recent lull. It will take some time for such losses to be absorbed by the company’s massive cash reserves, but given the Wii U’s poor start, it seems unlikely that Nintendo’s current trajectory will change any time soon.