Despite the fact that the UK is yet to officially hash out the terms of its exit from the European Union, various different market sectors have already come forward to warn that the split may affect how they operate, and the video game industry, it seems, is no exception.
As part of the company’s annual meeting of shareholders (via VideoGamer), Nintendo president Tatsumi Kimishima warned that the United Kingdom’s decision to leave has the potential to impact how it operates in the territory, due to the fact that “nobody knows” how various tax and privacy laws “would change if the UK were to leave.”
In regards to the immediate impact the vote has had however, Kimishima admits that it has “destabilized” stock and financial markets and, with the Japanese Yen currently in a strong position, any more “foreign exchange losses…could have an impact” on the company’s earnings.
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 UK were to leave. For now, what we need to do is closely watch developments and prepare appropriate measures.
One can only assume that a worst case scenario for Nintendo would be them deciding to close their headquarters in the UK entirely, deciding instead to ship their products over to the country from mainland Europe to avoid unnecessary spending, but that seems unlikely.
We, just like the Big N, will have to wait and see what the final outcome of the severed relationship means for all corners of the industry.