Nintendo stocks fall 13%, prompts exec pay cut
by Andrew Yoon, shacknews.com, Jul 29, 2011 8:45AM PDT
Looking at Nintendo's stock, it appears the tremendous success of the Wii and DS have essentially evaporated overnight. Shares for Nintendo closed down 13%, and were down as high as 20%, after Nintendo released its disastrous financial report, largely blaming sluggish 3DS sales. The company immediately dropped the price on the 3DS, and is now expecting an 82% drop in profit for the year.
Shares for the Japanese video game company haven't been this low since 2006--before Nintendo launched the Wii, and spurned a massive turnaround for the gaming giant.
"The reality is that people may be tired of the whole DS concept. It has been around for almost seven years," CheapAssGamer's David Abrams told the BBC. "Maybe its not that exciting to people anymore."
The dire situation Nintendo finds itself in will affect all of its shareholders, but one person in particular has been impacted the most. Former Nintendo President Hiroshi Yamauchi, who stepped down in 2002, currently owns 10% of the company. According to a report by Bloomberg, Yamauchi has lost 24.2 billion yen ($312 million) of wealth overnight.
Others affected by the poor performance include Yamauchi's successor, Satoru Iwata. Iwata advised investors that he is taking responsibility for the poor sales of the 3DS, and has announced a 50% pay cut, according to a report by Kotaku. Famed Mario and Zelda designer Shigeru Miyamoto is also taking a hefty pay cut of at least 20%.
Nintendo shareholders have been clamoring for the company to enter the growing mobile market, an area which Nintendo has admitted exploring. "Please understand that we are still researching these areas," Iwata last commented about the possibility.