Nintendo makes big promises about profits for its mysterious NX and smartphone business

The Wii U and 3DS are limping to the end of their console lives, and publisher Nintendo knows it.

President Tatsumi Kimishima minimized the importance of both of these aging systems when an investor asked him how his gaming company would return to “Nintendo-like profits.” Instead, the executive pointed to two businesses that have generated zero dollars in revenue for the publisher to date: the upcoming dedicated gaming platform codenamed NX and the iOS and Android apps still in development. Earlier this month, Nintendo released slightly disappointing results for its fiscal third quarter with its $1.83 billion in revenues. But investors in the company want a return to form for Nintendo that looks like its 2012 holiday quarter when it generated $3.8 billion in revenues. To do that, the publisher is looking to the $30 billion mobile-gaming business and making big promises when it comes to the mysterious NX.

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Kimishima essentially confirmed, during the question-and-answer sessions with investors, that Nintendo is well past trying to save the Wii U and likely beyond trying to resuscitate the 3DS with another hardware revision.

His expectations are with the future.

“One area [where we would generate Nintendo-like profits first] is our NX business, and another is our business for smart devices,” said Kimishima. “I believe that keeping these two endeavors on track will be key to achieving Nintendo-like profits. I don’t have any further details to share about the next fiscal year at this time, but we will explain about our plan and when we will aim to achieve Nintendo-like profits at a future date.”

Kimishima elaborated by pointing out that Nintendo is in a transitional period.

“The previous and current fiscal years have been a period of preparation to launch a number of new endeavors, such as NX development, development for smart devices, and business using our character IP, in addition to driving our Wii U and Nintendo 3DS businesses,” he said.

In relation to this transition, Nintendo is taking this opportunity to reorganize how it makes products. He pointed to the decision to unify the portable and home-console development teams as one example of this.

“As I have described before, where development was split between handheld and home-console divisions in the past, we have unified these activities for both hardware and software development,” he explained. “And the exciting new ideas coming from development are evidence of the progress being made as a result of that unification.”

But Nintendo’s restructuring goes beyond bringing together its software studios. Kimishima revealed that he is having the company’s planning department revise how communication works within Nintendo.

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“Gaps in communication that may arise from reorganization could hinder plans that require timely execution,” he said. “This is why our corporate planning department is also implementing organizational reform that allows for precise understanding of progress across the whole company.”

Finally, the Nintendo boss tied all of this back into “Nintendo-like profits” by pointing out that getting the company working together more efficiently should help it produce strong software for the NX and smartphones in a “timely manner.” If the company can deliver that, it has a better chance of seeing strong launches for its apps and its new gaming system.