In recent years, video game giant Nintendo has attempted to make its name in the newest "console wars" with the WiiU system. It was an ambitious attempt to continue the trend of testing the boundaries of what these home systems can do, but it appears the product hasn't performed as well as it could have.
How should the company's CEO respond?
CEO experience might suggest the proper way to react in this situation. Satoru Iwata, the man currently serving as Nintendo's president, is docking his own salary in response to the poor sales.
And it isn't just Iwata who will feel the pain. According to AFP, the entire board of the company is reducing its pay by as much as 30 percent, while the president's own adjusted salary will continue for at least five months and perhaps longer depending on his assessment. It seems like more than just a token gesture on the part of Nintendo's leaders.
While the company had originally expected to sell 9 million Wii U's starting last March, the slow results have led it to recalculate its sales estimates in favor of a much lower number. At the same time, the company is also apparently considering other directions, including a more focused push toward mobile and even the healthcare sector.
When these kinds of pay cuts are announced, they should be done in the context of the company's specific performance and not obscure the real solutions that will be needed to achieve greater amounts of productivity. No company wants to have to do this, but it's an inevitable thing in such a volatile market.
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