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Video game giant looks to mergers and acquisitions

Virginia businesses may be interested in the changes happening with one video game giant. They are altering their strategy in order to increase revenue due to a failure to meet projected profits.

Video game hardware and software maker Nintendo was recently forced to lower its forecasts for sales of its Wii U game console after nearly a year of disappointing results. Though the company saw revenue of nearly $5 billion, this represented 8.1 percent less than the same period in the previous year. This is a result of software and hardware shortfalls that failed to meet even revised estimates. Individual titles, they say, are performing well, but are not enough to raise revenue on the whole for their platforms.

In response to this disappointing news, Nintendo president Satoru Iwata outlined possible plans for the firm. These plans may include mergers and acquisitions in order to launch into emerging markets. The future of Nintendo requires abandonment of "old assumptions" about their business models, according to Iwata. Going forward, Nintendo plans to become a profitable company again through expanding the licensing of their intellectual properties and leveraging customer loyalty programs. They are also seeking to expand into the health product business as well as making better use of their existing gaming hardware. In order to accomplish this, the company is beginning to buy back shares from some of their stockholders.

Merging with and acquiring other profitable businesses can be a great way to achieve success in business through reducing competition and expanding into new markets. While the results may be successful, properly acquiring another business is complicated and requires careful planning and execution. The help of an experienced attorney may be useful in streamlining this process of mergers and acquisitions.

Source: Polygon, "Nintendo to consider mergers and acquisitions in business strategy", Tracey Lien , January 31, 2014

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