Nintendo planning new system for the future, talks how cash will be used
While it’s not much of a surprise, Nintendo president Shuntaro Furukawa has confirmed that Nintendo will continue pursuing the idea of integrated hardware-software products. In other words, we’ll be seeing something in the future that follows the Switch.
Furukawa spoke about Nintendo’s future outlook during a financial results briefing, also stressing the importance of Nintendo Accounts and using them to “maintain a positive, lasting relationship with consumers”.
Furukawa said:
In support of our efforts to increase the number of people who experience Nintendo IP, Nintendo plans to continue to expand its business a round the core concept of creating unique integrated hardware-software products.
In addition, we will build on the Nintendo Account foundation to develop services that complement our business.
With Nintendo Switch, we introduced the ability to link to a Nintendo Account and created a foundation for maintaining relationships with consumers going forward. We want to maintain a positive, lasting relationship with consumers through these accounts.
We seek a virtuous cycle with our integrated hardware-software business and the provision of services and content based on Nintendo Accounts, in which touchpoints are created with ever more consumers and strengthened to establish long-term, mutually positive relationships.
Also towards the end of the presentation, Furukawa discussed some new interesting ways in which Nintendo will use its cash. He mentioned expanding the company’s game development frameworks, pursuing more video content, enhancing My Nintendo, research and development of technologies relating to the integrated hardware-software business, and more. Nintendo also isn’t ruling out the possibility of M&A activities.
According to Furukawa:
As a company that brings smiles through entertainment, Nintendo’s goal has always been to create original entertainment. In a business with extreme fluctuations like the entertainment business, the basic policy of our financial activities has been to secure cash and other liquid assets so we can continually offer products and services that constantly deliver new surprises.
While this basic policy will not change, the Nintendo Switch business has exceeded our expectations, putting us in a strong cash position in these last few years and presenting a good opportunity to reconsider how to most effectively utilize our cash in a variety of strategic and meaningful ways.
Let me describe the fields we plan to actively focus on from a mid- to long- term perspective, given the changes in our current business environment.
These efforts will be made in addition to our conventional research and development and capital expenditures.
The new fields where we will utilize our cash can be broadly classified under two themes: building software assets and building a foundation for maintaining and expanding relationships with consumers.
These software assets include games, and we aim to expand our game development frameworks inside the Nintendo group. We are not dismissing the possibility of M&A activities, but our first priority is to organically expand our own organization to continue Nintendo’s creative culture.
In addition, we will pursue opportunities in non-game entertainment businesses that have high affinity with the game business. To that end, we will work to build software assets in fields other than games. We will also work to develop new video content, following on from the Super Mario movie.
Our other theme, of building a foundation for maintaining and expanding relationships with consumers, will center on expanding the ways that Nintendo Accounts can serve as the foundation for providing consumers with better experiences and better services, and for creating new added value.
The aim is not to simply promote the shift to digital, but to build a uniquely Nintendo service infrastructure based on our integrated hardware-software business.
To maintain and expand relationships with consumers, we will work to enhance the My Nintendo service, discussed before, and the My Nintendo Store.
Our efforts will also include initiatives to increase the ways to deliver Nintendo software, following the new Nintendo eShops for Asia and South America that we opened after the launch of Nintendo Switch.
In addition, we will consider enhancing our direct touchpoints with consumers through efforts such as adding more physical stores, as represented by Nintendo TOKYO, both in Japan and overseas.
Along with our integrated hardware-software business, which is at the center of everything we do, we also consider utilizing our cash in the research and development of technologies for delivering our software assets, and in the formation of new partnerships that can help bring that about.
