Nintendo’s Predatory Strategy Outlined by Iwata

Following last week’s rumours suggesting that Nintendo was considering the acquisition of Kyoto-based developer Bandai, Nintendo president Satoru Iwata has stated in an interview with Les Echos newspaper that the company’s priority is to establish stronger relationships with external developers, rather than buying them out completely. However, Iwata did admit that Nintendo would have the resources to do so if it wished, with a stash of over $6 billion in its cash reserves.

The Japanese press had reported earlier in the year that Nintendo was setting up an account specifically to handle acquisitions. It would now seem that these funds are meant for boosting the company’s stake in other development teams. A larger slice of Bandai is definitely on the cards, and an increased share of n-Space and Kuju Entertainment has already been achieved. Talk of outright acquisitions, however, has been conspicuously understated.

With the DS and the Nintendo Revolution still in the pipeline, Nintendo is unlikely to risk too significant a proportion of its reserves in major buy-outs. Instead, by consolidating and reinforcing relationships with external developers, it can guarantee a certain level of support for its forthcoming systems, thereby helping to safeguard the success of the company’s future.