Iwata:

  I know that a fair number of people here today expect that sales of DS will start to decline according to the previous life span of platforms, and in a sense, this is quite natural. In video game history through today, a platform sells some in the first year, increases sales in the second, meets its peak in the third, declines slightly in the fourth, and cuts price to make those who could not afford to buy in the fifth. Such a pattern has been repeated several times and it is quite natural that it would be the mainstream way of thinking.

  On the other hand, I am personally doubtful of this theory when I see that the definition of games and customers has been changing so drastically. That is why we prepared Nintendo DSi. By launching DSi, I believe that we can prolong the life expectancy of the DS platform much more than many had expected, and to first do it in Japan will have a positive effect in the larger markets of US and Europe later.

  Thus in that sense, with more than enough momentum of DS and Wii in foreign markets, our priority is to establish Nintendo DSi and get it rolling in Japan. This will largely affect the life expectancy of DS platform overseas after next year, so this is a crucial point for us.

  As for the rate of gaming consoles' online connectivity, while no one can expect it to grow very easily, we are looking for what will be the killer-application that will push the connectivity rate higher. We are developing a variety of products, including what I have not mentioned today; and some of what I have talked about today is connected, to online use. I am personally looking forward to seeing the changes in the connectivity rate in Japan after functionalities like Wii Speak in "Animal Crossing," which I did not talk about today, are adopted. In a sense it will be a turning point that will greatly affect the future once a number of players start to have their Wii or DS connected to the internet and begin to recognize the value.

  By the way, last year, we expected to allocate more of our resources to develop emerging markets this year. But this year, we have been in a fortunate situation where all the quantities of Nintendo DS and Wii that we could manufacture have been consumed by the leading industrialized nations, and every time I saw our local American or European subsidiaries, I was asked for more Wiis, more Wii Fit, or more DS. Under such circumstances, we could not unfortunately give enough resources to develop the Asian market. I think it may be our priority next year after we will have launched Nintendo DSi.

  You also mentioned some promotional campaigns. As for the case of Senator Obama, it was not something that could have happened had we approached him. It is like what previously happened during the Academy Awards ceremony where two hosts were playing Wii Sports and it was broadcast on TV by chance. We have a feeling that Wii has become such a social phenomenon that it is getting taken up where we did not expect it at all.

  As traditional methods of marketing would never attract those who do not proactively collect information about videogames, we tried to adopt some kinds of advertisement using celebrities this year, and that is the "I play for me" campaign that you mentioned.

  As to the question of whether the Japanese market is peculiar, my opinion is that it has unique characteristics but that it is not peculiar. Traditionally, life cycle of a product was much shorter in Japan and longer overseas, and a trend would end sooner as information spreads much faster here. Despite that, I think we have realized what could have never been expected by, for example, selling some of the software for a very long time period with new ways of marketing. So nowadays, it can't be said life cycles in Japan are always short unlike overseas. On the contrary, there are some products whose life cycle is shorter overseas, making impressive sales figures in the month of launch and falling off the charts three months later.

  One thing I may be very conscious of is how Japanese customers expect very high standards for a product, and criticisms or claims against a failure of product spreads more fiercely and faster than any other region in the world. Thus I believe that, what have been accepted in Japan has a good chance of being accepted elsewhere, and for that matter, believe that we should all feel that we are being trained by strict Japanese customers as we develop our products.

Iwata:

  To be honest, marketers in the U.S. now take "Rhythm Heaven" much more seriously after it sold very well in Japan. Years ago when I was still in HAL Laboratory before coming to Nintendo, I witnessed a similar process introducing Pokémon to foreign countries and felt that when people face what is not familiar to them, their initial reaction is that of doubt like "Can this really sell well in my country?".

  You know, it is quite natural. It is the same for us, as products created in Japan are much more familiar and acceptable to us than those created by foreign cultures. Even today I can recall an event that happened nearly 10 years ago; people in our overseas subsidiary took a look at Pokémon and sent us a beefy, scary Pikachu, saying "THIS is monster. A monster must be muscular and terrifying." We thought, "We can never show this to the designer of Pokémon." However, as you know, the Japanese creativity was welcomed overseas. We faced hardship before the unique Japanese style of creation was appreciated, but once it was recognized and welcomed, similar to what Shigeru Miyamoto mentioned, it built its own status because it is something brand new and there is nothing to be compared.

  In that sense, "Brain Age" followed that path recently. No matter how hard I tried to tell people outside Japan that it was creating an interesting phenomenon, they could not figure out its appeal immediately. That was expected. But in the end, Europe resulted in selling twice the amount of "Brain Age" than Japan did.

  This time for "Rhythm Heaven", there might have been differences among people who were willing to take it seriously until the results came out in Japan. Once we achieved positive results, we can repeat the pattern: "What was well achieved in Japan has a potential to build a uniquely competitive status overseas if handled smartly". In that sense, I am looking forward to seeing how "Rhythm Heaven" will be accepted overseas in the first half of 2009.

  One more thing is that, UGC (User-Generated Contents), which can hardly include "Rhythm Heaven," but which includes "Band Brothers", "Wii Music", "Moving Notepad", "Girls' Mode" and "Animal Crossing," is an entertainment which allows our customers to create and share it with other people.

  Talking of games using online functionality, in the early days of online games, it was thought to be a standard that a large number of players gather in a virtual world to lead another life by paying monthly fees, or compete to be number one, which attract many players, as it is almost instinctive. On the other hand, I was somewhat doubtful that, in those kinds of online games, players who usually enjoy competing among friends could really enjoy the game if they lost badly to the best players in the world. And Miyamoto and I often spoke that the joy of online gaming should be to share, not to compete.

  Recently the environment to support this has become widely popular and we are starting to see some good examples of this as I have mentioned. And we expect that the use of communities that excludes competition, where a player's creativity benefits all other players and in return the player himself will be encouraged by the commendation and support of other players, can prolong the life of the title and have more possibility of improvement which we the developers never imagined. Thus one of our themes in planning various products nowadays is to imagine what will be made adding UGC functionality.

  So we are doing our best to propose interesting ideas and there are some other projects that are under way in addition to those I have shown you today.

Iwata:

  The rights of many songs in Japan are controlled by a single corporation, JASRAC. It will be very hard if we try to incorporate every song made in another country. Thus we are currently researching what we can do in each region or country.

  We would like to start the service as soon as we find the answer; but as for "Band Brothers", we still have no clear vision to start what is available now in Japan in other regions. On the other hand, I have also considered the possibility to start the service by dealing with a specific music label although the range of choices would somewhat be limited.

Iwata:

  Firstly about capital policy, we have been studying it by not limiting the possibility of any policy at any time. However, there is nothing we can talk in detail today. I think we will also have to review something regarding the digitalization of stock certificates next year.

  And as for China, we have figured out that any announcement concerned to China should be made in China with our experiences. So please forgive us for we can not make any announcement here today.

Iwata:

  As Nintendo is free from debt with interest, the thing which concerns us will be how this interest cut will affect the foreign currency exchange rates.

  On the other hand, our industry has historically been relatively insulated against recessions and has been one of the most cost-efficient among entertainment industries. From our experience and based on our industry's characteristics, what will impact our industry most is whether we can develop a great, entertaining product that year. Of course if the economy worsens beyond a fundamental point and affects many to the points of life or death, any business will breakdown. To avoid such a catastrophe, we hope the policies created by the top authorities of each country will sure to improve the situation.

  As for the interest cut for us, so, we will keep eyes on the fluctuations of the exchange rates.