As a result of its poor financial report this quarter - itself largely a result of slow sales of its flagship 3DS hand-held games console - Nintendo has announced some cost-cutting measures that are going to have top executives tightening their belts until the company is back on a sound financial footing.
The company announced a massive price drop of between 30 and 40 percent for its 3DS hand-held console, which has seen slow sales and a surprisingly high return rate as buyers struggle to adapt to the autostereoscopic 3D display and lack of 3D-ready software for the device.
That price drop - which comes with 20 free NES and Game Boy Advance games for those who have already bought a 3DS at the original price - was announced shortly before the company admitted that its sales forecast needed to be revised by around 82 per cent, resulting in a sudden sale of stock and a drop in market cap of a whopping $312 million.
To get investors back on side, Nintendo has announced that its employees will see their salaries reduced until the balance sheet starts to look healthy again. These cuts are expected to take place across the board, with company president Satora Iwata taking the biggest hit with a 50 per cent cut in salary while other executives take a 20-30 per cent reduction.
That massive drop in salary will save Nintendo a small fortune, but it won't leave Iwata destitute: having previously received a bumper £1.2 million salary, the reduction will still see him taking home an impressive £600,000 a year.
The sudden turnaround in Nintendo's fortune, which had previously looked rosy on the back of stellar sales for its Wii motion controlled console, are being blamed by many on the 3DS. Interestingly, it's not the first time a revolutionary 3D console has caused the company heartache: back in 1995 the company launched its Virtual Boy, a portable games console that used a headset-style design to create a 3D, single-colour image.
Sales of the device were slow in the extreme, and repeated price drops did little to interest customers with a mere 800,000 units shipping world-wide during the year it was on sale. With sales of the 3DS proving slow and prompting price drops, investors are likely wondering whether Nintendo is repeating history.