Nintendo and Brexit: Uncertainty awaits NX’s 2017 launch in $3.8B U.K. market

Even Nintendo is concerned about the United Kingdom’s decision to leave the European Union.

During a question and answer session with shareholders on June 29, Nintendo president Tatsumi Kimishima was asked if the U.K. leaving the EU would affect the Japanese game company, which will have to launch the new code-named NX home gaming console next March. The U.K. is the sixth largest gaming market in the world at $3.83 billion, according to research firm Newzoo. The Brexit puts the U.K.’s future financial situation into question.

Here is what Kimishima said:

The “leave” vote has destabilized stock markets and financial markets. The decision to leave the EU and the ongoing preparations for doing so will gradually lead to a stabilization in financial markets and exchange rates, but it is clear that the yen is trending strong for now.

The book value of Nintendo’s assets denominated in foreign currencies will take a hit compared to last fiscal year-end due to foreign exchange losses if the strong yen continues, and this could have an impact on our earnings. We will need to keep a close eye on the way events unfold.

Another conceivable impact of the Brexit vote is that Nintendo has a base in the UK and sell goods from there. Tax systems, product safety standards and rules, information privacy, and all sorts of other agreements are established by the EU for all of Europe, and at this point in time nobody knows how those agreements would change if the U.K. were to leave. For now, what we need to do is closely watch developments and prepare appropriate measures.

Basically, the Brexit makes Nintendo’s future in Europe uncertain. Nintendo of Europe’s main headquarters is in Frankfurt, Germany, but the company does have an office in Windsor, Berkshire that’s responsible for U.K. sales, marketing, and distribution.

Nintendo plans to launch a new console, the NX, in March 2017. A weakened U.K. economy could hurt that console’s debut in the region. If the pound continues to fall, U.K. citizens might be less likely to spend money on a new gaming system. The NX will already have its own issues after the Wii U, Nintendo’s current console, failed to make an impact in any market.