Iwata discusses recent downturn in video game industry
The video game industry has been in the slump over the past couple of years, Satoru Iwata has acknowledged. Some say that the US has specifically seen a downturn. Why is this so?
Iwata did offer two possible reasons during Nintendo’s most-recent financial results briefing Q&A.
First, Iwata commented on consumers’ “higher psychological hurdle to paying a certain sum of money for software.”
One is that consumers have a higher psychological hurdle to paying a certain sum of money for software. Many people attribute this to smart devices, but I don’t think it is the only reason. We try to offer various kinds of software for a video game platform, and the games are improving steadily each year, but these improvements are becoming less noticeable. In short, what one platform can offer will eventually become saturated. Every consumer will inevitably become tired of and get less excitement from the same type of entertainment. It has become more difficult for a game which developers in this industry, including us, created with the same or greater amount of energy, to move or amaze consumers. Lowering software prices and a rise in the number of devices you can play games on without a dedicated gaming machine are gradually setting the bar higher for us to encourage our consumers to pay a certain sum of money for software.
Iwata additionally made note of the fact that “non-Nintendo home consoles are nearing the end of their product cycles”:
The other element is the lowered sales level of the entire video game market as the current non-Nintendo home consoles are nearing the end of their product cycles. These factors combined have caused the current situation. I believe the future of the video game industry depends on the number of games developers release that consumers consider to be fresh and worth paying for.
Iwata believes some of these hurdles can be tackled by offering high-quality software. Software that has been “delicately crafted” – like Animal Crossing: New Leaf and Tomodachi Collection – still manages to find an audience in Japan. Overseas, games such as Luigi’s Mansion and Fire Emblem have been a hit because consumers “still respect the value of games that have been carefully developed to take advantage of dedicated gaming machines.”
We have recently reaffirmed the fact that a delicately crafted game will never fail to appeal to consumers. A good example is “Animal Crossing: New Leaf” we released at the end of last year. “Tomodachi Collection” has also made a good start in its first week, probably because many people have felt that it contains new types of fun and excitement even if the basic structure of the game is similar to its prequel for Nintendo DS. In this way, what is happening cannot be accounted for by the idea that casual users playing games with smartphones will not buy games targeted at them for dedicated gaming systems. The reason why “Fire Emblem Awakening” and “Luigi’s Mansion: Dark Moon” have been well received by consumers in the U.S. and European markets is that they still respect the value of games that have been carefully developed to take advantage of dedicated gaming machines. It is true that the overseas video game market has been in a downturn for the last two years, but we believe that there is a way to buck the trend.
