This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
I’d like to hear about the future of your big hit titles released during October to December last year. The initial response was extremely strong, but will that be met with a drop in sales momentum? Or will the strength of that initial momentum on release help download sales and purchases based on word-of-mouth to grow, resulting in a net positive effect on future sales?
Satoru Shibata (Director, Senior Executive Officer): We feel very fortunate that the initial sales pace for Super Mario Party, Pokémon: Let’s Go, Pikachu!/Pokémon: Let’s Go, Eevee!, and Super Smash Bros. Ultimate has been so strong. However, that doesn’t exactly mean we’re satisfied. Before their release, we challenged ourselves to see how we could expand our consumer base with each of these titles. For Super Mario Party, the question was “How could we reach people other than children and parents?”
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
The “expanding” part of “expanding the number of people who have access to Nintendo IP” may be important, but looking at third-quarter software sales and the presence of two titles with sales of over 10 million units in a single quarter, it seems pursuing “depth” is also important. I think it is important to provide more software for consumers who have already purchased Nintendo Switch. I’d like to know your software lineup for next fiscal year and after, and if you’ve considered the possibility of increasing R&D spending to increase title count going forward.
Furukawa: As you’ve pointed out, “depth” is also important, and we’ve considered many factors with regards to our future lineup.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
What are you hoping for going forward from the collaboration with LINE Corporation, beyond Dr. Mario World? By collaborating with LINE, are you signaling a particular interest in developing games for younger segments of the population, such as teens?
Furukawa: I believe everyone is familiar with LINE, which is virtually synonymous with “messaging application” in Japan. We believe that the real-life social graph (connections between friends via the Internet) cultivated by LINE, as well as the technologies supporting it, will be a very strong platform for consumers to enjoy our game applications, which is why we have formed this collaboration. And Dr. Mario World is a puzzle game, so we hope many people will enjoy it, regardless of gender or age.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
On the other side of the globally expanding gaming population and the sudden rise of e-sports, video game addiction is currently under study by the Ministry of Health, Labour and Welfare in Japan and it seems to become a social issue. What is your acknowledgment of video game addiction, and what measures are you considering to combat it?
Furukawa: I think the problem of game addiction is more about becoming overly dependent on video games than is about any issues with the games themselves. One thing we have done as a company that creates games is to implement features that allow parents to limit the time that their children can play games. I think that further implementing features like this, and raising awareness among more people that these features exist is one way we can face this issue.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
You mentioned (in the presentation) that the Nintendo Switch Online subscriber base (excluding free trials) has exceeded 8 million accounts, which suggests the service has gotten off to a really good start. I assume the people who purchased Super Smash Bros. Ultimate subscribed to the service at once, but I am wondering how many signed up for 12-month memberships. Given the current content of the service and your pace of releasing a few major, first-party titles in a year, I imagine it might be hard to maintain a relationship with those members. The service is off to a great start, but what do you plan to offer to members going forward?
Furukawa: We do think Nintendo Switch Online has had a good start coming out of the holiday season, helped in large part by Super Smash Bros. Ultimate.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
Female gamers are growing in number year after year, but what is the proportion of female employees in your hardware and software development departments?
Takahashi: There are many female developers in the software development departments. Especially, there are many design works involved in developing software, and very high number of females among our designers. Many of them have children, and we have created an environment to work with comfort even for those who have children. I think that it is a very good workplace where women can participate actively and find satisfaction in their work.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
Even though youʼve stated your intention to maximize the value of Nintendo IP, itʼs still impressive to see that titles using existing IP can exceed sales of 10 million units. But your titles that have offered new kinds of play have not yet demonstrated explosive growth in sales nor have they taken the world by storm like some of your past offerings. Do you think the variety of consumer preferences is a factor in this? Considering the possible reasons and how the environment has changed compared to how it was before, Iʼm wondering if you feel the need to alter Nintendoʼs development concept in response. Also, have there been any changes with regards to the younger developers to whom Mr. Miyamoto is delegating responsibilities? I can imagine there are some aspects that should change and some that should not, and Iʼd like to hear your current take on the matter.
Takahashi: It is really gratifying to see so many consumers enjoying new games that make use of the Nintendo IP we have developed to this point. Some may say that those titles are just reusing our old IP, but I donʼt see us creating the same things over again, given that the actual content of these games is different.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
Unit sales of Nintendo 3DS have declined significantly. Iʼd like to hear your thought on sales plans, for instance, coexistence of Nintendo 3DS and Nintendo Switch, as well as any ideas for Nintendo Switch at a lower price point or smaller size as such.
Furukawa: While the Nintendo 3DS market has contracted faster than we anticipated, currently many of consumers who newly purchase Nintendo 3DS are consumers purchasing Nintendo 3DS as their first game system. Nintendo 3DS is appealing as a portable game system, that is easy to carry around since it is small and light, and at a very desirable price point. Demand still remains from parents looking to purchase a first game system for their children. That is why our basic policy is to proceed with both Nintendo Switch and Nintendo 3DS in our dedicated video game platform business.
Regarding future sales of Nintendo Switch, what we first need is to drive sales of one system per household, and we will work towards increasing demand to expand the installed base much further than now. On the other hand, in a survey of households asking how many family members use Nintendo Switch, we found that, while a certain number of households have multiple family members who play on a single console, some households have already purchased multiple consoles. Going forward, we aim to generate such demand among consumers as they feel like “I want to have my own Nintendo Switch console” through measures such as software offerings, not necessarily so that each person will have one, but so that each household will have multiple Nintendo Switch consoles.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
For the reason the Nintendo Switch hardware sales forecast for this fiscal year was revised down to 17 million units, I would think it is largely because Nintendo Switch hardware sales did not increase during the first half of this fiscal year and the releases of major titles were concentrated in October through December. I’d like to know what kind of process management is currently in place for software development, as well as your approach to Nintendo Switch hardware from the viewpoint of making software easier to develop?
Shinya Takahashi (Director, Senior Managing Executive Officer): Compared to the NES (Nintendo Entertainment System) era, there are a lot more developers, larger development teams. We conduct development in a variety of locations as the number of development centers also increased. Even so, development is being managed more systematically than before. So although it’s true that the volume of software is increasing, there are more people involved in developing it, there are more development processes in place to bring it all together, and development scale has expanded, I believe, regarding plans how to develop software, we are working better than before partly because development departments have been integrated. I have heard some people say we have a tendency towards slow development, but thatʼs certainly not true in every case. We have titles currently in development that we havenʼt announced yet, some of which weʼre preparing to release this year, and I donʼt anticipate the kind of delays they would be concerned about.
This information comes from the Q&A portion of Nintendo’s latest financial results briefing…
Regarding the downward revision of the Nintendo Switch hardware unit sales forecast for this fiscal year, what is different now compared to your expectations at the start of this fiscal year? Iʼd also like to know how many units you intend to sell in the coming fiscal year, and your sales strategy for doing so.
Shuntaro Furukawa (President and Representative Director): This holiday season, we were able to release three major titles (Super Mario Party, Pokémon: Let’s Go, Pikachu!/Pokémon: Let’s Go, Eevee!, and Super Smash Bros. Ultimate), and were able to grow our year-on-year hardware sales in every region.
Yet despite having been able to sell fairly large volume of hardware during the holiday season, it is true that we now do not anticipate reaching the forecasted 12-month sales volume set at the beginning of this fiscal year. As we look back so far (for this fiscal year), we now evaluate that our efforts to fully convey the appeal of Nintendo Switch hardware and software to the number of new consumers we originally hoped to reach were insufficient.
