Iwata on Nintendo’s QOL plans and health focus

Nintendo closed out its investor briefing today by teasing its quality of life (QOL) plans for the future. The company’s first big step, president Satoru Iwata revealed, is a focus on health.

Head past the break for Iwata’s lengthy excerpts concerning QOL.

I would like to tell you about something different from our traditional business. We will definitely maintain dedicated video game platforms as our core business, but

We will also take on the challenge of expanding into a new business area.

I have run Nintendo with the belief that the raison d’etre of entertainment is to put smiles on people’s faces around the world through products and services.

In addition, as the business environment around us has shifted with the times, I am willing to redefine the meaning of entertainment. As the extension of the definition of video games gave new potential to video games, I think now is the time we need to extend the definition of entertainment.

This time, we decided to redefine our notion of entertainment as something that improves people’s quality of life in enjoyable ways, and take a step forward in expanding our business areas. Being an entertainment company, making “enjoyable improvements” is something that Nintendo excels at, and this definition provides us with a clear distinction from simply “improving QOL.”

Ever since Nintendo was founded 125 years ago as a manufacturer of Hanafuda, Nintendo has continued to transform itself into offering various propositions to consumers from toys, electronic toys, and then video games, improving, in my view, people’s QOL in enjoyable ways.

What Nintendo will try to achieve in the next 10 years is a platform business that improves people’s QOL in enjoyable ways.

This definition includes, of course, dedicated video game platforms. While we will continue to devote our energy to dedicated video game platforms, what I see as our first step into a new business area in our endeavor to improve QOL is,

The theme of “health.” Of course, defining a new entertainment business that seeks to improve QOL creates various possibilities for the future such as “learning” and “lifestyle,” but it is our intention to take “health” as our first step.

Please note, however, that rather than simply setting health as our theme, Nintendo will also try to expand it in a new blue ocean.

It has been a long time since people started to say that the console era has now shifted to a new mobile era, with wearable technology in the spotlight at CES this month.
However, as I said at the beginning of the presentation today, Nintendo is a company that sees the true value of entertainment lies in its individuality. Following others into the exceedingly crowded market of mobile applications or the market of wearable technology that is expected to become increasingly competitive and fighting with brute force is not our way of doing business. Yet again, it is our intention to go into a new blue ocean.

With that said, we wish to achieve an integrated hardware-software platform business that, instead of providing mobile or wearable features, will be characterized by a new area of what we like to call “non-wearable” technology. When we use “health” as the keyword, some may inevitably think about “Wii Fit.” However, we are considering themes that we have not incorporated to games for our existing platforms. Including the hardware that will enable such an idea, we will aim to establish a blue ocean.

As we attempt to challenge ourselves with the area of health from a new perspective, we are considering unique approaches by leveraging our strengths. First, I feel that there is strong public awareness for health around the globe.

As those who are already suffering from illness can seek medical care, our new business domain would be providing preventive measures which would require us to enable people to monitor their health and offer them appropriate propositions.

However, what is generally good for health requires some kind of effort to be made by the individual, and, as I am sure that many of you have experienced this, it is sometimes difficult to stay focused and engaged, and it is not uncommon to give up after a few days. This is where our strength as an entertainment company to keep our consumers engaged and entertained comes into play, assisted by the non-wearable feature, which is the biggest differentiator of this new business field, as well as user experiences that integrate into people’s daily lives, all of which help us overcome this difficulty. If we do indeed succeed in doing so, we will be able to provide feedback to our consumers on a continual basis, and our approach will be to redefine the notion of health-consciousness, and eventually increase the fit population.

I feel that not only can this QOL-improving platform utilize our know-how and experience about video game platforms but also we can expect it to interact with games and create a synergistic effect.
Nintendo has released a series of games entitled “Touch Generations” that seek to expand the definition of games by releasing games in various fields including health-themed titles such as “Brain Age” and “Wii Fit,” or educational titles such as “English Training” and “Art Academy,” or lifestyle software such as “Cooking Navigator” (translation of Japanese title, only available in Japan). The know-how and experience we have acquired about entertainment through these games, or to put it differently, the ability to keep consumers engaged and entertained on a continual basis and the hospitality we can offer is something that we can take advantage of now in order to increase the value of our QOL-improving platform.

On the other hand, while we feel that this is going to take two to three years after its launch, we expect the QOL-improving platform to provide us with new themes which we can then turn into games that operate on our future video game platforms, too. Once we have established such a cycle, we will see continuous positive interactions between the two platforms that enable us to make unique propositions.

Through our new endeavors with the QOL-improving platform, we strive to promote our existing strategy of expanding our user base even further.

As all dedicated video game platforms ever since Famicom (Nintendo Entertainment System) in 1983 have continued to expand the gaming population as well as Nintendo’s user base, our QOL-improving platform will attempt to create an environment in which we can expand the population of those who are conscious about their health and use that expansion to expand Nintendo’s user base.

Today I would like to limit my presentation to the general direction of our new business, but I plan to announce more details within 2014. I then plan to talk about its specific features and a clearer vision of what we really mean by the term “non-wearable.”

This new business will be launched during the fiscal year ending March 2016, which begins in April 2015. As this is a completely new field of business, our plan is to make it contribute to our overall business and position it for growth from following fiscal year.

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