Nintendo comments on its rising R&D costs
When Nintendo held its financial call last week, one investor asked about the company’s rising costs when it comes to research and development. The Big N is expecting these expenses to be at nearly 100 billion yen for the fiscal year.
President Shuntaro Furukawa offered up some insight. He pointed to a few factors, such as development costs (which are higher compared to past platforms) to produce a steady stream of games for Switch, development of next generation hardware, plans to grow its integrated hardware-software entertainment business, and more.
Furukawa stated:
“Our software development costs, which include outsourcing, are increasing as we work to maintain a continuous stream of new titles for Nintendo Switch as it enters the middle of its lifecycle. Because per-title development costs are higher now than they were on past platforms, we anticipate that R&D expenses will continue to rise as we work to maintain a sizeable lineup of titles. We are also conducting a variety of studies, which include investigating ways to enhance our digital business, and future services that will help maintain long-term relationships with our consumers, as was touched on in the Corporate Management Policy Briefing last September. In addition, the development of the next generation of hardware needs to begin years before launch, so R&D expenses for that are gradually rising. We are aiming to grow by continuing our integrated hardware-software entertainment business, and that means conducting all sorts of research and development in various areas including both hardware and software.”
