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Nintendo on acquisitions: 'We do not need to be hesitant'

According to Nintendo president Satoru Iwata, if there's a good long-term relationship with a company, well, why not? More partnerships for software, including first-party games, are in the works, too.

Christian Nutt, Contributor

November 10, 2014

3 Min Read

If Nintendo has a solid, ongoing relationship with a company, why not buy it? "When we have a good encounter with a prospective partner who owns promising technology, and if we will be able to establish a good and long-term relationship that is based on trust between the core individuals at the companies, we do not need to be hesitant. In this regard, the actual investments we make may increase in the future." Those are the words of Nintendo president Satoru Iwata, when asked at the company's latest investor Q&A if Nintendo would spend some of its huge cash reserves (which measure in the billions of dollars) to acquire businesses which could help it grow its revenues.

How acquisitions work at Nintendo

Nintendo acquired French company Mobiclip two years ago, which it re-christened NERD -- Nintendo European Research & Development. Mobiclip developed a codec to compress video widely used on Nintendo's DS system (and on other platforms) prior to becoming part of the Japanese company. "The company originally had a partnership with Nintendo, and we eventually agreed that Nintendo would purchase it so it could become a part of the global Nintendo group," Iwata remarked.

Partnerships are increasing, too

Acquisitions aren't the only thing on the table -- so are partnerships. This past January, Iwata promised to more actively exploit the company's IP to return Nintendo to regular profitability; one result of that was its Amiibo toys. But in the wake of Iwata's comments, companies began to approach Nintendo with partnership ideas. Now, Iwata has revealed a bit more about that: "During our discussions, we made progress even in fields that we have not deployed our IP in the past. However, we are negotiating these deals with other parties," he said. Game software head Shigeru Miyamoto also pointed out that the company has been more aggressive in working with external companies on games using its IP, though he did not name names. "We have been working with a number of outside companies," he said. "Looking at this year alone, we have started to work with second- and third-parties that we have not collaborated with before. Since we can collaborate with an increasing number of outside companies, we are now making progress to develop a number of games that will become key software for us."

Quality of life and partnerships

Finally, when the subject of Nintendo's new "quality of life" business came up -- the first form of which is a device that will track the user's sleep patterns -- Iwata said that "Nintendo will not implement this business alone." We already knew that Nintendo has been working with an external company on the device, but Iwata's comments in the shareholder Q&A hint that Nintendo might pursue a similar third-party strategy for QOL as its does with its consoles and handhelds. Iwata, however, didn't spell out the details of how that would work -- nor how the QOL business model will work generally, though he did allude to a subscription service rather than a one-time purchase.) "There might be cases in which we approach other companies. Conversely, there might also be cases where, following our announcement, companies come to us and propose something using their techniques or something that they would be able to achieve," Iwata said. "... we would like various partners to join us if they have some ideas to propose to our consumers." The full Q&A is a hefty but interesting read. Gamasutra has also broken out stories from on the company's plans for its Amiibo figure platform and its policies on region-locking games.

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