Will an as yet unrevealed mystery device be the key to Nintendo turning around its sinking fortunes?
After saying in January that it would report its third consecutive annual operating loss, the company surprised analysts and investors by disclosing that it plans to focus on nonwearable health monitors as part of a new 10-year strategy.
Scott Eelis | Bloomberg | Getty Images
Nintendo's global president, Satoru Iwata, has discussed his interest in the fitness market and in taking the company in unexpected directions, both in public and in regular meetings with CNBC.com over the years. But the announcement, on Jan. 30, still left many investors confused.
What, exactly, does Nintendo have planned? Iwata isn't saying much—though he promised to reveal more details later this year. The company has said it plans to launch the product in the fiscal year ending in March 2016 (suggesting a possible holiday 2015 debut). Also, the venture is independent from its core games business.
Nintendo did imply there will be some tie-ins between the two units, though, as plans are underway to build a "flagship title" to show off the new platform. And it will revolve around increasing quality of life through entertainment.
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Nintendo is "considering themes that we have not incorporated to games for our existing platforms," Iwata said. "Our new business domain would be providing preventive measures which would require us to enable people to monitor their health and offer them appropriate propositions."
Analysts' reactions were mixed. Some say it could help in turning around the company's finances, but no one thinks it's a miracle cure-all.
"It seems pretty interesting to me if they can turn this into a 'next generation Wii Fit,' " says Colin Sebastian of Robert W. Baird. "They're still in a difficult spot, though. I appreciate the fact they're looking at areas that may not be as explored by Sony and Microsoft, but I think the company itself still seems to be stuck in a position of not determining who it wants to be long term."
Others aren't so diplomatic.
"I don't think it will ever see the light of day," says Michael Pachter of Wedbush Securities. "It's not going to have any impact."
Neither would speculate on what the product might be.
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