At Nintendo’s financial results briefing last week, one investor mentioned how it seems as though the company isn’t “conservative” as it used to be. That’s in large part due to the quick succession of announcements regarding Nintendo’s partnerships with DeNA and Universal Parks & Resorts.
The investor wondered whether the passing of Hiroshi Yamauchi has something to do with Nintendo’s change, or if president Satoru Iwata’s poor health last year was a factor. Iwata shrugged those suggestions off, but clarified: “our specific plans to change started when I talked about our new efforts to maximize the value of Nintendo IP and to make use of smart devices in January last year.”
If you’re interested in taking a look at Iwata’s full comments about Nintendo’s partnerships, head past the break.
First of all, having announced our partnership with Universal Parks & Resorts only one and a half months after announcing our partnership with DeNA, for people looking at Nintendo from outside, it may seem like Nintendo has greatly changed this year. However, as I mentioned earlier, as for both DeNA and Universal Parks & Resorts, we had been discussing these partnerships for a few years before the actual announcements. From the start, we were considering these partnerships as possible options, and in the end, we reached a consensus on our visions, so we finally fulfilled the conditions to announce these partnerships to the world.
So, of course I can understand that it may seem like Nintendo has greatly changed this year, but in reality, our specific plans to change started when I talked about our new efforts to maximize the value of Nintendo IP and to make use of smart devices in January last year. And recently, these plans settled to a level where we could announce them to the public.
Also, I do not think that Mr. Yamauchi’s passing or my illness has had a direct effect, but I do think that the way Nintendo itself proceeded had slightly changed when it became obvious to us during the fiscal year ended March 31, 2014, that Nintendo would not reach its originally announced financial forecasts, which were based upon the existing structure of Nintendo’s video game business, and so we reanalyzed what could be left as is and what should not be left as it is and instead changed.
One more thing, regarding partnerships, opportunities depend greatly on the partner. In terms of the partnership with DeNA, for example, it probably would not have come together if DeNA insisted on bringing its own name to the forefront or if the company was in a time when it wanted to stick to its “Mobage” brand name. As I mentioned in the Business and Capital Alliance Announcement we made on March 17, Mr. Moriyasu, CEO of DeNA, even said that they did not mind remaining in the background and that he felt there was significance in collaborating with Nintendo. In terms of the partnership with Universal Parks & Resorts, they proposed a very detailed plan to me from the first time I met with them.
Or, regarding DeNA, we had been receiving proposals on using Nintendo IP for Mobage from a long time ago. Our partnership did not come together then, but after that, DeNA repeatedly approached us. In this sense, since partnerships depend greatly on the partner, we were able to build a partnership because certain conditions were satisfied; our partner also had passion for a partnership with Nintendo, we had a complementary relationship to cover each other’s weaknesses with our strengths and based on our corporate cultures, we were confident that we could work together. Therefore, it is not that Nintendo changed its policy in January 2014 and will now partner with anyone, but rather that Nintendo has decided to do what Nintendo has not done before. By doing so, we have found opportunities with a few companies, and among those opportunities, there are some that we can now announce to the public, and thus it may seem like they were announced one after the other. I would like you to think of the chronology as such.
By the way, regarding your question about a “more aggressive stance,” my answer varies based on how you interpret the word “aggressive.” For example, if “aggressive” means, doing whatever possible to attract attention and, for instance, doing something that may temporarily have a positive impact on the stock price even if the corporate cultures or our complementary relationships do not match, then that is not how Nintendo thinks. What I believe to be the most important aspect of partnerships is if the partnership can improve corporate value in the mid-to-long term, and if it will lead to a positive result. If we do not have conviction that we will produce positive results, I think that there is no meaning to the partnership, and it would lead to losses for both Nintendo and the partner.
On the other hand, in terms of “aggressively searching for such partner” or “aggressively pursuing such opportunities,” in this dynamically changing market environment, it is better for Nintendo to continue to partner with other parties instead of attempting something alone (if such options exist), and as to the type of partnership, I believe that we should not rule out the various options such as a partnership, an alliance, or even further, a capital alliance or an M&A. In that sense, we do have a more aggressive approach. I think we can say in a sense that Nintendo’s organization, as a whole, is moving towards such direction and is aggressive. Thus, if the word “aggressive” does not walk alone to include misleading meanings, my answer to your question is “yes.”
