IR Information

Corporate Management Policy Briefing/Semi-Annual Financial Results Briefing for Fiscal Year Ended March 2010
Q & A - Oct. 30, 2009
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Q 1   I would like Mr. Miyamoto to explain New Super Mario Bros. Wii. Also, please let me know what kind of genres or platform you are focusing on most at this moment. Also, where and how do you get your inspirations? I heard previously that you were gardening when the idea for Pikmin came to your mind. And when will you likely be releasing them?
A 1

Satoru Iwata (President):

  Actually I often tell Miyamoto not to talk about his hobbies in public, in order to prevent (Nintendo's) future (software) lineup from leaking... Let us ask him to talk as much as he can disclose at this moment, firstly about New Super Mario Bros. Wii.

Shigeru Miyamoto (General Manager, Entertainment Analysis & Development Division) :

  Well, thank you for your question. Now I would like to start my PR activity for the New Mario title. First, I want to ask if you already have any information on the title, New Super Mario Bros. Wii. If you have, please raise your hand! Well, how many of you...? (Looking around the raised hands of the audience) Thank you. So let me explain with the premise that there are people who do now know much about the title.

  You may want to consider New Super Mario Bros. Wii, as New Super Mario Bros. DS, designed for Wii, as it is a 2D platformer Mario game, which every kind of player can easily enjoy and get excited.

  And the key feature is the multiplayer mode up to four players. New Super Mario Bros. DS, a 2D Mario game that simply uses the D-Pad and A and B Buttons, is actually so easy for everyone to understand and enjoy. Everyone could feel the fun of reaching to the goal. I believe that's why it became so popular that about 5 million copies in Japan and approximately 20 million copies around the world have sold so far. Now that people can play such a game on Wii in a living room, we wanted everyone to not only see other people playing but play together.

  On transporting such game play into a living room, I would like to cite "Mario Brothers", not Super Mario one, as an example. Mario Brothers was an arcade action game before the NES days where twin brothers named Mario and Luigi fought around turtles. Players can, of course, cooperate with each other. Or, the game can get overheated and the players can end up beating each other flipping the turtle from underneath to interrupt the other player. It was unfortunate when the game ended quickly because it was an arcade game, but players had a hard time walking away. I think it was a pioneer of arcade games like "Street Fighter 2" or "Virtua Fighter", which players needed to keep inserting coins again and again to keep playing and which made arcades wealthy. This Mario Brothers was also transported to NES. After that, we developed Super Mario Bros. upon the original, into a 2D platformer. But the Super one was only single player!

  After that, on every Mario project we have discussed the possibility of having two players play together simultaneously. On the latest title, Super Mario Galaxy a second player can help the main player who is controlling Mario by shooting a Star Piece. It was a system where dads can help kids or kids can help moms. But this time, those two are at last able to play equally, and everyone surrounding them can enjoy watching.

  It was all thanks to the graphical capacity of Wii console. If two players or more are simultaneously controlling Mario and Luigi in the same screen on a platformer game, the slower player will be left behind by the faster player, beyond the game screen. This time the screen zooms in and out accordingly, thanks to the capacity of the Wii console. The camera can zoom out as far as three times wider where you can see a very small Mario running around, and zoom in to show huge Mario and Luigi. The camera will work automatically and simultaneously, according to the position of four players. That's how we realized a Mario game which can be played by up to four players at the same time.

  Another challenge was a gap among players. Nintendo DS has brought many brand new players to the world of video game. Along with them, there are also veteran players who have never stopped playing video games. We have developed New Super Mario Bros. Wii for both kinds of players... but it was challenging to balance between the difficulty levels that would be challenging enough for veterans and entertaining enough for novice players. So our idea was to develop a game that everyone can enjoy equally, not what everyone with various skills can equally clear as that is impossible.

  The multiplayer I believe is a good solution. If there is one veteran player among four players, he or she can lead the other three and they don't have to do much. People can enjoy a kind of play like peeking inside Bowser's castle to see how scary it is. Another thing is the "Otehon System" (Super Guide mode), which is similar to a strategy book, where Luigi will show players an example for a solution after the players fail so many times. I believe this system has made challenging-for-veterans courses enjoyable even for novice players. Now I anticipate New Super Mario Bros. Wii to be enjoyed in a large number of households at the end of the year!

  Well, now a short answer after a long one... I strictly refrain from commenting on our future development. As for Nintendo DSi LL we have announced yesterday, we have found that a fair amount of DS owners are playing IN their home. Thus one of our ideas is an "in-house DS game play". Another idea is what I have been calling as a public space application. Currently we are focusing on DS as a game console that can be used outside of the home. Actually because Dragon Quest IX made Passing-By Connection much more popular, there has been an increase in people carrying around their DS, and we are trying to develop something unique around that factor. And, recently I have cats. That's all!


  He left significant hints...

Q 2   Please explain the impacts of such devices as Magic-Coms or R4 had made on DS software market. Personally I have heard that considerable impact has been taking place in Europe. I would like you to explain how large its penetration and impact are, and how you are going to deal with them.
A 2


  I recognize there is more software piracy, playing downloaded software data without purchase, than some years ago, on many of the current platforms including Nintendo DS. You have noted one of Magic-Coms (dedicated to DS), but I think I can declare that software piracy impacts ALL video game platforms today. As for the piracy itself, it is said to be hard to precisely figure out the total impact as it is done underground.

  Actually piracy has become more widespread in Europe than in U.S., especially in specific European nations where piracy regulation is restricted by the law. Thus we should assume that Europe is seeing a larger impact than U.S.

  Of course we are developing video games very hard for the sake of customers' enjoyment and so are other software companies. Thus it is our important role as a hardware manufacturer to establish the environment for healthy video game business.

  As for specific measures, we have two ways; technological and legal measures. They tend to become a cat-and-mouse chase; as the piracy itself is underground, someone somewhere finds out the solution to evade our measures. When we shut one hole of the mice, they have dug a new one somewhere else. We have acknowledged that this is an endless battle, and we believe the best measure is to keep fighting it technologically and legally. As for the details of specific measures, I'll refrain from disclosing them here, as this conversation will be public online and the pirates will be able to find. I will however promise to keep acting legally and technologically, with patience.

Q 3   Please give us an explanation of Wii and DS's Internet connection ratio including WiiWare, DSiWare and Wii no Ma.
A 3


  As for Internet connection ratio, there are slight gaps between regions and periods - from right after the launch of the console when eager users are the majority to when the console starts to get popular. If Nintendo takes no action at all, the ratio will gradually decrease. As the console spreads, many people will buy, including those who are not really interested in the Internet, and the ratio will decline.

  And so far we have taken various measures. When we announce that the Internet Connection gives you a variety of entertainment options or release a title which becomes more enjoyable with the Internet connection, the ratio actually rises. On a rough analysis basis, the connection ratio of Wii is around 35%, in the Japanese market. And that of DS is probably, 20% or so. It had increased with the measures like Nintendo Zone with McDonald's to lower the hurdle for connection, but has not reached the 30% mark.

  And regarding your question about the download sales including WiiWare and DSiWare, so-called digital distribution in English, there is actually a variety of views about how much it will replace retailers and package software. Most radical people even dare to say that retailers will be replaced by digital distribution in no time. But personally, I think it will still require a significant amount of time. In other words, it will require many years and months for the majority of video game purchase to become digital. In short, in 20 years or so I might say it will have probably changed. But in 5 years or so, I do not totally agree with opinions that no one will purchase titles at retailers by then. Habits of life do not change such radically and quickly. Especially for the expanded audience of various people, to whom we are and will be trying to appeal, I believe their habits will change more slowly.

  Personally, what I believe is the most important factor for Internet connection is expanding titles' lifespan rather than replacing the packaged software to digital distribution. With the Internet connection, players can purchase additional features or receive extra services. As a result they will play a single software for a longer time without feeling bored and will not sell it to the used-game shops, which will then contribute to more software sales. I believe such a utilization of the Internet connection is one of the major directions we should aim for and we will continue to try and raise the connection ratio.

  As for the future plan of our approaches such as the one with McDonald's, hopefully we can further broaden Nintendo Zone. I believe it is very important to establish an environment where Nintendo DS owners can easily connect to the Internet without having to set anything up. Actually when we ask customers to set up something in your home, many of them refuse, saying that it's too difficult for them. But when we ask them to just bring their Nintendo DS to a specified location as we actually do, they actually bring them if there are meaningful contents. Thus by broadening such an environment, we can have many Nintendo DS owners feel the value of being connected. Afterwards, we can expect more of them to want to do it at home since they now understand the value of being connected. So this is the process that I imagine (for spreading Internet connection on our platforms.)

  And as for WiiWare and DSiWare, they have not established a notably large market yet. The current situation on Wii Shopping Channel or Nintendo DSi Shop is like a purchase with specific intent, where customers who already know the name and information of the game they want directly seek out what they want and bring it to the register to purchase. Internally we have been discussing that we have to engage customers with less information to purchase. And as an experiment, we will be offering demo versions of specific titles next month on a trial basis to see if it can widen the customers. But I don't think that the demo version is the final solution. I believe that until customers have a reason to visit Wii Shopping Channel or Nintendo DSi Shop without purpose, digital distribution will not become popular.

  Our basic ideas are to add value to the hardware in order to add value to the software, rather than replacing packaged software to digital distribution.

  Finally as for Wii no Ma; after its launch in May, 930 thousand households or 2.48 million people have experienced it as of October 26th. I think it is a decent first step because these numbers reflect the number of views by users in front of whom we have set fairly high hurdles, from downloading the channel to watching and voting on the video. Of course this service is still in its early stages and we are still figuring out what we should have done at first. We are planning to update the Wii no Ma Channel within the year for pay contents, and thinking about some new measures for increasing the penetration rate. Wii no Ma is one of the approaches to give a wider audience an opportunity to play with the Wii console. If more customers are not playing games on the Wii but actually using the Wii console, it will contribute to the spread of video games in the future, and we will continue to work on this initiative.

Q 4   Mr. Miyamoto, what can be enjoyed with the Wii Vitality Sensor, which Nintendo announced at E3? Please give me at least a hint.
I think you are developing a new The Legend of Zelda for Wii. Please provide some clues about the development process and some of the new things you are trying out.
A 4


  I was hoping you'd ask about the most recent Zelda for DS. On December 23rd in Japan we are going to release The Legend of Zelda: Spirit Tracks, a sequel of Phantom Hourglass. It's really fun and challenging. On the other hand it might be a bit difficult for many new Japanese Zelda players who experienced their first adventure on Phantom Hourglass. I believe Spirit Tracks have achieved a unique style and I think you can anticipate the core value of Zelda!

  And the new Zelda for Wii is beyond that. On developing the recent Zelda for DS, I found out that one of Zelda's core appeals is its uniqueness. Of course we are preparing gorgeous graphics for the sake of users' anticipation for a grand role-playing adventure. But what I believe is very important is the realistic, actual feeling players have experienced themselves; the feeling to have really been on an adventure, to have explored the unknown terrains, to have solved the puzzle through trial and errors, to have themselves grown through various experiences! In that sense, a personal sense of creativity is becoming important among us. We have assembled one of the most creative team for the recent Zelda for DS, and we want to be as creative as possible for upcoming Wii Zelda.

  And on a more tangible note, we are utilizing Wii MotionPlus. What has been disclosed so far is that we are finding the most efficient way to utilize Wii MotionPlus to realize the realistic and actual feeling of fighting with the sword. As for targeting, we are utilizing the pointing system of Wii Remote on the previous title. This time we are planning a more convenient and comfortable pointing system.

  And as for Wii Vitality Sensor, I think Iwata will explain later since he is hard at work on it. Based on my experiences, to measure something invisible and have it turn into something tangible like a number like weighing myself on Wii Fit, or to give a numeric value to something invisible in our daily life will be materials of new plays which will feel familiar to us or can improve our lifestyles. We are currently developing an efficient utilization around that factor.

  That is all that I can say for today.


  Please let me add some notes. If Wii Vitality Sensor is simply a pulsimeter, we did not need such a grandiose announcement. It is a tool to analyze various biological signals by scanning the pulse, in order to make something invisible visible. The point with that is you can figure out your current conditions. I believe many of you have figured out with "Wii Fit", by weighing yourself every day you could figure out how the weight would change according to what you had done. Personally I have figured out how dining-out exactly affects my weights. And there are still more invisible factors, which Wii Vitality Sensor can make into something visible, by putting your finger on that every day.

  I have to refrain from disclosing too much to keep the surprises of announcement; but please note that Wii Vitality Sensor is not a simple pulsimeter. I have a strong feeling something fun will appear around this gadget, and am planning to put it as one of the next year's main topics.

Q 5   Under the current condition, investors require more than 2 million and some hundred thousand yen to purchase a minimum unit of Nintendo's stocks. It highly exceeds the level recommended by the Tokyo Stock Exchange. There are not a small number of individual investors or fans of your companies who want to buy the stocks but can't afford 2 million-and-some yen. Even among institutional investors, smaller funds can't deal with the weight. Actually the current unit of exchange is too large to buy or sell. Do you have anything to update on lowering the unit of exchange?
A 5


  Actually I recognize we are receiving such opinions as for revising the unit of exchange. Along with that we are researching how the lowering will affect the stock price, according to past examples. I think I should put it on as best of a condition as possible if we will do so. Including timing, it is our subject of consideration. Please understand our idea is not that we will never lower that under any circumstances.

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