IR Information

Nintendo E3 Analyst Briefing
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As Reggie explained at the beginning, I am using this presentation to speak about things that I feel investors and analysts would like to know, so let me turn to a couple of common questions.

First, what do we think about the future of dedicated gaming systems in this era of smart devices?
Every time NPD announces its monthly sales data for the U.S., many people seem to conclude that overall year-on-year declines in total industry sales are a consequence of the advent of smart devices.
I think that there are certainly many people who think that handheld systems are especially affected.

This chart is based on NPD data and gives year-on-year U.S. sales comparisons for March and April by platform.
The industry as a whole saw its total sales decrease by 10 percent in March, and by 25 percent in April on a year-on-year basis. While most platforms experienced decreasing sales as a result of the ongoing generational shift, Nintendo 3DS was clearly showing a different trend.
If one were to take a pessimistic view of the future of dedicated gaming systems due to the rise of smart devices, then one would expect that for structural reasons handheld devices would be hit hardest. But the data shows that this is not necessarily the case.

At the Business Partner Presentation we held at the Nokia Theatre yesterday, Kevan Wilson of Nintendo of America used this slide to explain that sales for handheld devices have in fact grown from what they were before smart devices were introduced. And in fact, Nintendo is even showing a stronger presence here.
I believe that repeating the full explanation again would be rather dull, so I would like to talk about the Japanese market where Nintendo 3DS has gained popularity earlier than other regions.
Speaking as someone who travels frequently between Japan and the U.S., I feel that smart devices became popular in the U.S. before they did in Japan. In Japan, however, smart devices penetrated the market in 2012 at such an incredible speed that it was no exaggeration to describe them as a social phenomenon.

*There was incorrect information in the original explanation that sales of the Nintendo DS hardware in 2008 surpassed five million units. We have revised the presentation text and slide on this matter. We apologize for any convenience.

This chart shows record one-year hardware unit sales figures in Japan. As you can see, Nintendo 3DS sold more than 5.5 million units in 2012 amid the social phenomenon of smart devices. In fact, this platform was the only one to break the five million mark except for Nintendo DS* in 2006 and 2007. Considering the sales pace so far and the upcoming software lineup that includes Monster Hunter and Pokémon, Nintendo 3DS is progressing at a fast enough sales pace to aim to sell five million units in Japan yet again.
For the sake of comparison, we can also look at the best-selling platforms in history. I would like to mention that GameBoy Advance experienced its peak sales of approximately four million units in 2001, PlayStation 2 experienced its peak of just under four million units in 2000, Wii experienced its peak of approximately the same figure in 2007, and PSP, thanks to the massive popularity of Monster Hunter at the time, experienced its peak of approximately 3.5 million in 2008. As you can see, five million units of hardware in Japan in one year is indeed an extremely high number even by historical standards.
The data reveals that the notion that smart devices will replace dedicated gaming systems is very different from the current reality in Japan. We are determined to achieve good results with Nintendo 3DS in the U.S. and Europe too, and show the potential that dedicated gaming systems possess for the future.

Next, we announced that we would propose a generational change in management to our Annual General Meeting of Shareholders to be held late this month. When the change becomes effective, the average age of the board of directors will become almost seven years younger than today.
Mr. Mori, Senior Managing Director of the company and General Manager of the Corporate Analysis & Administration Division, has been the contact for investors and analysts. He is retiring. After the change, Mr. Kimishima, the current CEO of Nintendo of America, will replace him, and Mr. Kimishima and I will share IR responsibilities.

Finally, we also announced that I will double as the CEO of Nintendo of America. I believe this will be the best structure to achieve closer cooperation between the headquarters in Japan and Nintendo of America. It will enable faster business decisions in order to achieve the same momentum for Nintendo 3DS as we experienced in Japan. It can also revitalize Wii U and expand our digital business. Under this new management structure, we will make our utmost efforts to meet this fiscal year’s financial forecast.

Thank you for listening.

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