Is Nintendo finally going to spend some of its money?

Nintendo might finally get around to spending its huge cash reserves, as it hints it may buy some of its rivals or even merge with them.

Speaking to Japanese newspaper Nikkei, Nintendo boss Satoru Iwata admitted that the company was now considering M&As, i.e. mergers and acquisitions.

Analysts have often criticised Nintendo for not making use of its billions in cash reserves, but Iwata’s comments appear to confirm theories that the company has been hoarding its money in order to prevent a hostile takeover.

‘We built up cash reserves when earnings were strong,’ said Iwata. ‘Without savings, we could not have recovered from a single failure in game systems. Even now, we can afford many options because of our robust financial standing.’




Despite that safety net though Nintendo’s recent financial results has forced change upon the company, with Iwata hinting that, as well as new non-gaming health products, emerging markets will also be a focus.

‘We’ll cultivate emerging markets and launch new businesses in health and other areas. In an emerging country, you can expand the user base only after you offer a product line different from advanced economies in pricing,’ said Iwata.

It’s likely he’s referring specifically to China when he talks about making cheaper games for emerging markets, as the country has recently lifted its ban on consoles and has long been a target for Nintendo.

The big question of course though is who Nintendo would consider for an acquisition, and given how inscrutable the company is that’s probably impossible to guess at.

With their money they could afford to buy any third party publisher they wanted, from Western giants like Activision and EA to Japanese companies such as Square Enix and Namco Bandai. It’s still hard to imagine Nintendo spending quite that much money at once though, so the reality would likely be a lot more modest.

As to who they’d consider merging with, it’s equally hard to say as to avoid being the junior partner they’d probably look for someone of similar size and who wasn’t a direct competitor. Perhaps some Japanese media company not well known in the West, or maybe even someone in the fitness or education market – given Nintendo’s recent plans for expansion.

The chances of guessing correctly are minute though, especially as there’s still a good chance that Iwata is again simply telling investors what they want to hear – without any real intention of following through.

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