IR Information

Semi-Annual Financial Results Briefing
for Fiscal Year Ending March 2012
Oct. 28, 2011
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This graph shows the global life-to-date sales of several Nintendo DS titles. The darker blue indicates the software’s shipment figure in the launch year, and the lighter blue indicates the shipments after the first year.
As you can easily understand, the large portions of the entire shipments were made in the second and the subsequent years after the launch, which have largely expanded the final shipment numbers.


In percentages, it looks like this. What is especially notable is the low sales percentage in the launch year of “Mario Kart DS.” We launched “New Super Mario Bros.” two fiscal years after the original launch of the Nintendo DS hardware so that, at the software’s launch, a significant number of the hardware had been purchased. Yet, the launch-year sales constitute a rather small portion of its entire sales. I’d like you to understand that the Nintendo 3DS titles I just mentioned as examples that have the potential to make steady and continuous sales in the next fiscal year and beyond, will be able to provide support for the momentum of Nintendo 3DS as well as to contribute to the sales and profits.


We are also aiming to accelerate our digital business, the importance of which is expected to become even higher in the future. The Internet-connection ratio of Nintendo 3DS is higher in comparison to our other portable game systems so far thanks to, for example, the existence of Nintendo Zone, where Nintendo 3DS systems can carry out “SpotPass” communications without the need for the hardware owners to go through any network connection setting procedures. When they execute the Nintendo 3DS system update that we are scheduling at the end of November this year, …


Several new functions will be added to the Nintendo eShop.
For one thing, after a software title is launched, content can be added to it via the Nintendo eShop. This is a feature a number of software creators have been looking forward to. With the Nintendo 3DS system update this time, we can create that desired circumstance, so we should see an increase in the number of applicable software titles that will be launched from now on.

Another addition is the ability for the software publishers to provide the owners of Nintendo 3DS systems with demo versions of their software, for which they can put a limit on the number of trials. As you may know by now, the player reviews available at the Nintendo eShop have high credibility since only those who have played the subject software for one hour or more are eligible to cast a vote. More than one million reviews have been contributed to date worldwide. By combining this existing review mechanism with the demo versions, we would like to continue our endeavors to expand the number of opportunities for consumers to be able to notice the potential and appeal of new software titles.

In terms of its usability, we know that there still are several issues with the Nintendo eShop. We have made several improvements for this time. For example, software downloads can be done when Nintendo 3DS is in sleep mode, which will lessen the need for the users to patiently wait by while downloading several software titles at once or while downloading software with a large memory capacity.

Although this next feature is not going to be available with the next system update, we are now preparing for the Nintendo eShop to be available on the Web so that you can access it via PCs or smartphones too. As of now, the information available on our Nintendo eShop, including the reviews that I mentioned just now, is only available at the Nintendo eShop on Nintendo 3DS and it does not have a great affinity with the social media which are currently being used as a means to spread information. In other words, even if a software title receives an incredible review, majority of people will not know about it unless they access the Nintendo eShop with their Nintendo 3DS system.

We would like to solve this issue by making the Nintendo eShop accessible via PCs and smartphones as well. At the beginning, you will not be able to directly purchase software from your PC or smartphone. Instead, you will need to take a photo of a QR code at the Nintendo eShop by using the camera of your Nintendo 3DS. The Nintendo 3DS will then open that specific page of the Nintendo eShop. That function is already included in the upcoming system update for the Nintendo 3DS. In the future, we will make it so that you will be able to purchase software by using your PC or smartphone,


As for the overseas markets, in the U.S. and in Canada, Netflix is already operating its video distribution business on the Wii and on the Nintendo 3DS. 

Netflix has already shown a solid result with the Wii. In the case of the Nintendo 3DS, although the Nintendo 3DS is yet to have a substantial installed base in these countries, Netflix applications have already been downloaded onto more than 400,000 Nintendo 3DS hardware units there. As the hardware-installed base expands, we can expect more people to enjoy the service.

Also in the U.S., Hulu Plus, which is a paid video distribution service operated by Hulu that was established primarily by a major TV network, is going to start on both the Wii and the Nintendo 3DS in the near future.

Also, DreamWorks is already distributing a short 3D movie on Nintendo Video, which is a free 3D video download service Nintendo is providing for the owners of Nintendo 3DS, and those who like the free short video can purchase the full video at Nintendo eShop.

As you can see from these examples, the company is accelerating its digital business outside Japan too.


In terms of our marketing efforts, the Nintendo 3DS faces the challenge of effectively communicating its attractive features by using traditional means of advertising, TV and print ads. You know that I have discussed with you several times about the challenge to communicate the appeal of 3D viewing on the Nintendo 3DS as well as about its StreetPass and SpotPass communications features. On the other hand, once a certain number of units of the hardware is sold, an appropriate level of awareness can be created by word of mouth. In other words, once the hardware has reached a certain sales point, its power to invite surrounding others to join the circle increases. This means that the entertainment that that particular hardware provides will entail an increased social aspect. Nintendo’s past platforms were able to make significant penetration into society after entering this good cycle. After the upcoming year-end sales season is over, the Nintendo 3DS is anticipated to reach the expected installed base that is necessary to create a favorable word-of-mouth cycle. We can expect the Nintendo 3DS to enter into the phase where relevant information shall be communicated even to people who usually do not proactively seek video game information.


We are also planning to launch the Wii U, which is the successor to the Wii, during the next fiscal year. We would like to show the final format of the Wii U at the E3 show next year. As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.


With all of these efforts and plans I have mentioned so far, we are trying to get back to our previous profit level.


Thank you for listening.


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