Iwata on licensing Nintendo’s characters
Nintendo announced a new approach to character licensing at its financial briefing last week. Whereas the company previously guarded its characters closely, Satoru Iwata confirmed plans to make IP more widely available and “actively expand” its character licensing business.
Iwata later clarified to investors that Nintendo won’t likely approve each request. Rather, Nintendo “will judge, based on our own criteria, if that licensed product really leads to consumers’ smiles in the medium- to long-term, and if it is in direct competition with our core business.
Although I mentioned that we would work flexibly without considering past exceptions when it comes to our character IP licensing business, I am not saying that we will approve every single request. For example, we will judge, based on our own criteria, if that licensed product really leads to consumers’ smiles in the medium- to long-term, and if it is in direct competition with our core business. It is true that any company in the entertainment industry is, in a sense, competing for consumers’ attention, but I was not referring to that type of competition. What I meant was the kind of competition that directly threatens, for example, our integrated hardware-software business, and we will of course not license any products that, as a result of using Nintendo game characters, damage their public image. I believe companies around the world that own a variety of character IP have ideas of their own about their licensing businesses, and I think our licensing business would not be greatly different from them. In that sense, within a year, we will probably embark on various types of businesses that we didn’t conduct in the past, and actually there are projects we have already started working on with our clients, so please look forward to them.
Revenues from the licensing business, in a sense, depend on client companies, and hence I am afraid that if we first set a clear revenue target, we will be driven into licensing products that we should not license in order to achieve that objective. That’s why I will not set a numerical goal for this business. On the other hand, I believe, given the total value of Nintendo’s character IP that everyone recognizes, the day will come in the not so distant future when this character IP business contributes to Nintendo’s annual operating income to a certain degree.
