IR Information

Corporate Management Policy Briefing/Semi-Annual Financial Results Briefing for the 68th Fiscal Term Ended March 2008
Q & A
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Q 21   You mentioned that there is no guarantee that current good business can be continued in the future. In operating, what kind of business risks are you assuming, both inside and outside the company?
A 21


  This is rather difficult to explain with a few words, but if I can say so, Nintendo has been very fortunate for quite sometime now. We were enjoying following winds too. If the current trends go on, and if we can achieve our forecasts, our business result for this one fiscal year will be almost equal to three times the amount two years ago. But, we are afraid that our feeling may be paralyzed in many different respects. People inside our organization may be bloated and conceited with our results. How we can prevent that? How we can keep the same motivation that we used to have two or three years ago? How to maintain that kind of mindset is most important. Of course, there are many external risks. In general, we have to brush up on our ability to sense and identify changes in the winds or tides, and swiftly cope with them. There is not a single formula that can be applied to any and all contingencies. Even what worked only yesterday may not work at all tomorrow. We have to be aware of the fact that such a drastic change can actually take place more often in this industry than any others. To make our people thoroughly understand these dangers must be one of my priority jobs.

Q 22   While the total sales are just stunning, when we just look at American market, DS is showing a slower start than the other territories. I understand that you are intensifying the marketing power by expanding the offices and inviting a new EVP. How will you cope with the U.S. market from now?
A 22


  Somewhere in my mind, I am sorry for people at Nintendo of America because nobody commended them even when they were renewing their sales record for two consecutive years. It is true that the changes with DS have taken place in the Americas later than any other territories. However, it is partly due to the fact that the US has traditionally been the market to more slowly embrace new hardware. Even when DS started its explosive sales in Japan, a huge number of Game Boy Advance was still sold in the U.S. Since the Game Boy sales were contributing to the general sales of Nintendo, we feel that Nintendo in America was a bit late in seriously thinking that there will be no future for Nintendo if we cannot sell DS. However, Wii is most quickly selling in the U.S. I do not think it fair to criticize marketing people at Nintendo of America who are selling the biggest number of Wii. Apart from that kind of perspective, we have been questioning ourselves if Seattle can be appropriate for the headquarters for all the marketing and PR activities of Nintendo, when we are trying to expand the ordinary concept of the game business. We concluded that establishing our office in Silicon Valley where we can observe the rapid changes in the technologies must make sense for us and we have hired new executives at that office. One of my immediate jobs is to communicate with them so they thoroughly understand Nintendo’s culture and philosophy. As a result, we are hopeful that you will say a year from today that Nintendo’s ability to market its products in Americas have notably been intensified. We’d like to work to make that happen.

Q 23   Before, you did not change the foreign currency exchange rates as a basis for financial forecasts. But for this annual fiscal term, you’ve already altered the rates twice. Have you changed your policy?
A 23


  If we didn’t have to, we would not be willing to change the rates. However, the foreign currency exchange rates change very rapidly. It has become very difficult for anyone to predict how they will change in the future at any given time. Under this circumstance, we thought that trying to adjust the expected rates closer to the actual rates in the market would be more understandable for many, and that we should consider announcing the change in the expected foreign currency exchange rates when we are required to make financial forecast modifications. For example, when we revise our financial forecasts, if the revised forecasts are based upon foreign currency exchange rates which are very different form the ones in the actual market, we also need to explain what kind of results would be expected if the most recent exchange rates would continue. That can be very hard to understand especially by ordinary shareholders. I heard that financial analysts prefer the unchanged currency exchange rates as you can analyze our performance with constant criteria, but please understand that we are opting to take this way for the convenience of our investors.

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