Is Iwata about to lose his job?

[trestres]

Aielyn said:

Fusioncode said:

In just a few short weeks Nintendo's investors will be voting on whether or not they want to keep Iwata around. With dysmal WiiU sales, major losses, and underperforming 3DS numbers is this Iwata's swan song?

Major losses? Underperforming 3DS numbers? Where is this coming from? Here's Nintendo's net income for the last 6 years (displaying the year at the end of the financial year):

2009: 257 billion yen
2010: 229 billion yen
2011: 78 billion yen
2012: -43 billion yen
2013: 7 billion yen
2014: -23 billion yen

As you can see, their net income (which is where you determine "profit") is a loss... but a rather small one, less than 10% of the profit made in 2009 and about 10% of the profit made in 2010. Indeed, the net loss over the last three years is less than the profit made in the lacklustre 2011.

And the 3DS numbers are only underperforming relative to Nintendo's highly optimistic predictions made at the start of the fiscal year; their total 3DS sales have remained almost steady from the previous year (they predicted 18 million, it was around 12 million, compared to 13-14 million in the previous two years).

What's more, that -23 billion yen number from 2014? It's entirely due to things like R&D and advertising expenditures in Q4 - indeed, their Q4 net income was -33 billion yen, meaning that they were up 10 billion yen prior to that expenditure.

So no, Iwata isn't about to lose his job. Indeed, the only legitimate gripe against Iwata is the "dismal" Wii U sales. And that's something that is likely to at least improve this year, given that two of the biggest franchises - Mario Kart and Smash Bros - are set for release, alongside a new Zelda title (Hyrule Warriors) and the retail version of Wii Sports Club.

That's not really how it is.

The way to judge if a business is going well is to look at the operating income, and not at the net income, which takes into account 1 time happenings like sales of buildings, exchange rate movements, etc.

If we go back and check the operating results, we get the following:

2008: 555bn yen

2009: 356bn yen

2010: 171bn yen

2011: -37bn yen

2012: -36bn yen

2013: -46 bn yen

Here the trend is one of total decline and sustained losses, 3 consecutive years of operating red numbers. I dont think Iwata will go, only because of the QoL promise, but he will have to resign if the QoL launch is a failure, since they will be consistently on the red with the VG department on years to come