Iwata on rising digital sales, digital models such as free-to-play, more
More and more consumers are purchasing digital content – even in Japan. A good chunk of Animal Crossing: New Leaf’s sales came from the eShop, and there are a fair amount of 3DS owners who have opted to purchase the downloadable version of Tomodachi Collection.
Nintendo president Satoru Iwata recently commented on the rise of digital sales during the Q&A session of the company’s latest financial results briefing. He confirmed to attendees that Animal Crossing’s digital sales in Japan stand at 10%, while Tomodachi Collection’s digital sales have come in at 10% thus far.
Regarding download sales, I cannot tell you the specifics, as we have not announced any concrete figures for this fiscal year or the next. On the other hand, a quarter of the sales of “Animal Crossing: New Leaf” in the last fiscal year came from its digital version, while the download sales ratio of “Tomodachi Collection,” which was released only very recently, stands at approximately 10 percent after its first week. Although this figure will vary depending on whether the software in question has qualities that can well be enjoyed digitally, it can be said that already 10 percent of Japanese consumers are willing to opt for our digital versions. In this sense, we are already seeing changes that would have been inconceivable, say, about a decade ago. In consideration of the fact shown in my presentation that, once people have chosen a download version, they tend to choose another download version the next time they purchase software, I still feel that the digital ratio will change dramatically in two or three years’ time, as I did when I initially made this remark.
Iwata went on to discuss other potential business models that are possible for the future along with packaged software. He specifically mentioned “more games that are similar to free-to-play games, games that cost much less or games that require a monthly subscription fee.”
Also, as you pointed out, we think that digital distribution of packaged software is only the first step in expanding our digital business. We will not simply change our existing packaged software distribution channel. Rather, we might have many other types of business models in addition to packaged software. For example, we might see more games that are similar to free-to-play games, games that cost much less or games that require a monthly subscription fee. Digitalization allows for greater flexibility, whereby having more ways to make payments, both software developers and consumers have more options. And Nintendo 3DS and Wii U have flexible systems to handle such trends, so it is now a question of putting these ideas into action. I can definitely say that Nintendo will make new offers that go well beyond simply replacing packaged software with digital software.
Finally, Iwata discussed Wii Street U (which is due for another update in the near future), the Suica program for Japan, and more.
Actually, “Wii Street U powered by Google,” which you referred to in your question, has been developed with open web technologies like HTML5 and JavaScript, which we announced as “Nintendo Web Framework” at GDC (Game Developers Conference) the other day. We already performed an update after releasing the software, and we are planning to release another update in the near future. It would have been impossible to offer to our consumers products that underwent updates at a pace like this in the traditional style of game development. But we are now in a position to, for example, realize various ideas conceived by people in the company who had tried “Wii Street U powered by Google.” This software is currently offered at no charge and those who downloaded it for free will be able to continue to use it for free, but we have already announced that we would make it paid content at some point in the future, and at that point, we will make new offers by combining various features. And I feel that the possibilities may go beyond simply charging our consumers a certain price at the time of download.
Also, I talked about JR East’s public transport e-money card “Suica” today, and I feel that the impediments to making small payments on Wii U will be reduced dramatically if one can make payments in this fashion. If this becomes a reality, it will be easier for consumers to pay for products and services such as, “Wii Street U powered by Google,” add-on content for games or pay-per-view options in VOD (Video on Demand) services, and I feel that there will be more ways for consumers to take advantage of these options.
I think that those who already own a Wii U system are starting to understand the advantages of having a game console that is connected to a TV as well as the Internet and, together with a device with touchscreen controls that you can hold in your hands, integrate to form one system. As a platform holder, Nintendo anticipates that as the system becomes increasingly convenient for consumers, the number of business opportunities taking advantage of these features will grow. We do not do business under the concept that “digital business” equals simply replacing packaged software with digital software, or, put another way, changing our distribution channels.
