While Nintendo still has plenty of cash in the bank, it’s not going to wait until that’s depleted before it starts reducing its costs.
The company is cutting 130 jobs from its Grossostheim, Germany branch as it moves to consolidate its offices in Europe (as first reported by German news organization Primavera24). Nintendo will also close the Grossostheim office and continue operations from its Frankfurt location — although the company plans to lay off some employees in that office as well. These cost-cutting measures come as Nintendo struggles to sell its Wii U home console not just in Europe but worldwide as well.
The publisher also noted that it will close a warehouse in Germany as well.
Nintendo released the following statement regarding today’s layoffs:
“Nintendo of Europe has entered into a consultation process on a number of changes it is intending to make to its European business, which, in the long term, will better enable the European business to adapt to the rapidly changing business environment. The measures include the consolidation of the current European headquarters in Großostheim [Grossostheim in English] to Frankfurt, the closure of the warehouse and office in Großostheim, as well as outsourcing and reorganizing some functions. These intended measures have not been made lightly and have only been arrived at after thorough analysis and careful consideration. The intended measures will sadly have a direct effect on some of the employees based in the Großostheim and Frankfurt offices in Germany and would lead to the release of approximately 130 permanent employees. Nintendo of Europe is committed to a fair consultation process with the local Works Council in Germany with the objective of providing clarity and support for all affected employees as soon as possible.”
Since November 2012, the Japanese gaming corporation has only sold around 6.5 million Wii U systems, which is fewer than the 7 million PlayStation 4s Sony has sold since November 2013. In its most recent financial report, the company revealed it lost $229 million for its fiscal 2014. This is despite relatively strong sales for its 3DS handheld, which has surpassed 43 million unit sales.
The Wii U’s struggles seem to stem from consumer perception and lacking third-party support. Nintendo’s latest home console is underpowered compared to the Xbox One and PlayStation 4 systems, and that means third-party publishers are focusing their support on those systems and mostly skipping Nintendo’s box. The House of Mario is trying to combat that by releasing a number of its own major games — like Super Mario 3D World and Mario Kart 8 — but that hasn’t moved the company into profitability.
Nintendo will continue trying to get players excited about the Wii U. The latest entry in the Super Smash Bros. series will hit the device this upcoming winter — although it’ll come months after the game debuts on 3DS in the summer. The hardware manufacturer has also dropped the price of the Wii U from $350 to $300 and introduced a number of bundles. Currently, it is selling a Wii U with Mario Kart 8 for $330.