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GameCube production halted
Nintendo clears console inventory, hints at new product
By Michiyo Nakamoto
FINANCIAL TIMES
TOKYO, Aug. 7 ? Nintendo is to press the pause button on production of
its Game Cube consoles while it clears inventory of unsold machines,
the company?s president said on Thursday. But Satoru Iwata promised
the struggling games company was developing a radical new product to
be announced next year ? however he gave few details save to say it
would be a departure from mainstream gaming consoles ?that will have a
big impact on the world?.
THE HALT IN PRODUCTION will last until autumn as Nintendo struggles
against competition from Sony?s PlayStation 2, the leading console in
the global market, and Microsoft?s XBox. PlayStation 2 has shipped
more than 51m units since its launch in 2000 compared with under 10m
for Nintendos competing Game Cube, which was launched in 2001.
Mr Iwata, who gave no figures on how much inventory was left to clear,
acknowledged that the group had stumbled with the Game Cube console
and conceded that it had made a strategic mistake by not ensuring that
it had a consistent flow of attractive software for the Game Cube.
But he cast doubt on the ability of Nintendo?s competitors to continue
attracting users with games that are becoming more and more
graphically sophisticated and difficult to play.
?Games that are sophisticated require a lot of time and energy,? he
said. As games became more complicated, players were given up playing
and this was leading to the gradual shrinkage of the market, he
warned.
?We are thinking of launching a completely different kind of game. We
are confident that we can develop a product that anyone can enjoy and
that will provide people with a new kind of excitement,? he said.
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Mr Iwata declined to provide any more details about what kind of new
product Nintendo is working on, saying only that the company would
make a further announcement with details next spring.
He did, however, suggest that the new console would aim to return the
games industry to its roots of providing fresh excitement through
games that can be enjoyed by anyone, including those who do not
normally play video games.
Investors are concerned that Nintendo has not risen to the challenge
provided by competitors, such as Sony and Microsoft, by targeting the
casual user, which is where most of the growth in games demand has
been coming from.
Earlier this year, Nintendo?s share price plunged on news that Sony
would launch a handheld game, challenging Nintendo in a market that it
has dominated. It was hit again when Sony announced a new
multi-function machine that would combine a DVD recorder with the
PlayStation.
Nintendo?s share price, which closed at Y9,690 on Thursday, is 19 per
cent below this year?s high of Y11,890.
Nintendo?s mission is to develop simple games that anyone can enjoy,
and by doing so bring back those people who have given up playing
games into the market. If Nintendo succeeds in doing that, it might
even achieve sales of Y1,000bn, Mr Iwata said. That compares with
sales last year of Y504bn.
GameCube production halted
Nintendo clears console inventory, hints at new product
By Michiyo Nakamoto
FINANCIAL TIMES
TOKYO, Aug. 7 ? Nintendo is to press the pause button on production of
its Game Cube consoles while it clears inventory of unsold machines,
the company?s president said on Thursday. But Satoru Iwata promised
the struggling games company was developing a radical new product to
be announced next year ? however he gave few details save to say it
would be a departure from mainstream gaming consoles ?that will have a
big impact on the world?.
THE HALT IN PRODUCTION will last until autumn as Nintendo struggles
against competition from Sony?s PlayStation 2, the leading console in
the global market, and Microsoft?s XBox. PlayStation 2 has shipped
more than 51m units since its launch in 2000 compared with under 10m
for Nintendos competing Game Cube, which was launched in 2001.
Mr Iwata, who gave no figures on how much inventory was left to clear,
acknowledged that the group had stumbled with the Game Cube console
and conceded that it had made a strategic mistake by not ensuring that
it had a consistent flow of attractive software for the Game Cube.
But he cast doubt on the ability of Nintendo?s competitors to continue
attracting users with games that are becoming more and more
graphically sophisticated and difficult to play.
?Games that are sophisticated require a lot of time and energy,? he
said. As games became more complicated, players were given up playing
and this was leading to the gradual shrinkage of the market, he
warned.
?We are thinking of launching a completely different kind of game. We
are confident that we can develop a product that anyone can enjoy and
that will provide people with a new kind of excitement,? he said.
Advertisement
Mr Iwata declined to provide any more details about what kind of new
product Nintendo is working on, saying only that the company would
make a further announcement with details next spring.
He did, however, suggest that the new console would aim to return the
games industry to its roots of providing fresh excitement through
games that can be enjoyed by anyone, including those who do not
normally play video games.
Investors are concerned that Nintendo has not risen to the challenge
provided by competitors, such as Sony and Microsoft, by targeting the
casual user, which is where most of the growth in games demand has
been coming from.
Earlier this year, Nintendo?s share price plunged on news that Sony
would launch a handheld game, challenging Nintendo in a market that it
has dominated. It was hit again when Sony announced a new
multi-function machine that would combine a DVD recorder with the
PlayStation.
Nintendo?s share price, which closed at Y9,690 on Thursday, is 19 per
cent below this year?s high of Y11,890.
Nintendo?s mission is to develop simple games that anyone can enjoy,
and by doing so bring back those people who have given up playing
games into the market. If Nintendo succeeds in doing that, it might
even achieve sales of Y1,000bn, Mr Iwata said. That compares with
sales last year of Y504bn.