Business

Nintendo makes a CEO switch after impressive console sales

Nintendo’s current president, Tatsumi Kimishima, announced that he would hand over his role in June to a younger executive. The consumer electronics company is based in Kyoto, Japan.

Kimishima was a former banker and took the position of CEO in 2015 after the death of then-CEO Satoru Iwata. Due to Kimishima’s age, flying frequently was taxing
on his body.

In a statement, he said, “the better-than-expected sales momentum of the Switch console made him decide it was time to pass
the baton.”

Shuntaro Furukawa, a 46-year-old executive in charge of corporate planning, will replace 68-year-old Kimishima. Furukawa joined the company in 1994 and has experience in finance.

According to Nikkei, a Japanese newspaper, he is also a graduate of Waseda University and worked in Germany for approximately
10 years.

The Wall Street Journal published an article in which Kimishima gave his reasons for
stepping down.

He proposed that it was perfect time to do so “after the Switch game machine introduced last year turned into a hit.”

Nintendo Switch — released in 2017 — is a home video game console that can easily transform into a handheld console. The Switch has been a catalyst for Nintendo’s success, causing the company’s revenue to more than double.

At a news conference in Osaka, Japan, Furukawa stated, “We will develop the company to its fullest.” Regarding Nintendo’s corporate mission and philosophy, he also said, “I will balance Nintendo’s traditions: originality and flexibility.”

Kimishima praised his successor at a news conference, describing Furukawa as someone who works well with others and has been a future CEO in the making for many years.

Furukawa made it clear that Nintendo Co. Ltd. has limitations and that it “should focus on things that only we can provide.”

Kimishima will not be leaving the company completely, taking over a position as an adviser and assistant alongside game designer and producer Shigeru Miyamoto.

Nintendo’s goal for the Switch console is to sell 20 million units, only needing 4.9 million units to reach this goal. The company also plans to sell 100 million games for the platform. According to some analysts, the company could sell even more.

Furukawa eventually wants to bring the 2-in-1 console to a wider audience and plans to do so with the Nintendo Labo.

The Labo is a do it yourself kit — made out of cardboard — that is compatible with the Switch.

In addition, Furukawa wants to incorporate smartphone games designed by the company. He believes that it will be a “revenue pillar.” However, analysts are unsure about the Labo’s future success.

Serkan Toto, CEO and founder of Tokyo-based Kantan Games Inc., praised Switch’s current success saying, “No other console in recent history offered such an array of blockbusters in the first 12 months after launch.”

On the contrary, he suggested that Nintendo needs to invest more into the console, “But the Switch absolutely needs more mega hit games in 2018.”

In an article published by Fortune, Nintendo disclosed its key figures. Switch’s software titles exceeded the company’s forecast by 53 million. It totaled 63.5 million in 2017.

The company expects to sell 100 million in 2018, which is an increase of 37.5 million titles. As of the end of March, Switch owners purchased 3.9 titles per console on average. Nintendo expects this number to rise to 4.5 by 2019, which is an increase of 0.6 of a title.

Annual revenue from smartphone games increased to a little over $359 million; this was an increase of 62 percent. Lastly, income mainly attributed to Pokémon Go — a free-to-play reality game developed by Niantic Inc. for iOS and Android smartphones — decreased to $94 million from $185 million in 2017.

Nintendo has certainly seen its fair share of popularity in the years it has been out. The Nintendo Wii alone sold 3.26 million consoles worldwide, which made it Nintendo’s most popular product.

Hopefully with Furukawa taking over as CEO, he can sustain or even surpass Kimishima’s performance and uphold Nintendo’s reputation as one of the top companies in
the world.

May 7, 2018

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Brandon Tingle


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