Iwata:

  Usually, people watch TV programs only passively. In other words, except when we choose the channel, we are just watching the programs. On the other hand, video distribution is a proactive viewing activity where nothing starts unless the viewer takes the action to select the video.

  In case of "Wii no Ma," some people are annoyed or do not think it's a good idea when they are asked to vote after watching videos, and some people agree that this kind of proactive viewing is worthwhile. In fact, we can understand how many people in which age demographic have seen the entire program, and in case they stop watching them halfway, when they stopped. And the assessments are given to the program creators.

  From the video creators' viewpoint, in accordance with the degree at which they want to know the reaction from the viewers, the feedback from the viewers is stimulating, they say. In fact, I hear from those who are operating the "Wii no Ma" that some of the creators who could not receive the expected feedback are shedding bitter tears and some others who received good assessment are very happy. That reminds me of Club Nintendo. We have been able to receive direct opinions from our customers about the products they purchased. When the opinions are circulated among the development teams, they read through them very seriously. The creators always want to know how their works have been appreciated by the customers. Of course, since our job is to give pleasant surprises to the customers, we do not intend to incorporate any and all the opinions into our future products because such products cannot surprise the customers. On the other hand, we would like to know how our customers actually felt about our products. Because we are working to give some excitement to people, if our customers are not excited, we would like to know and face the truth. If you are excited, we would like to know which part of the product was able to reach that part of your mind. Doing so will increase the creative level, we believe. The video creators who share the same feeling with us are very positively reacting to this particular feature of "Wii no Ma." On the other hand, not all the video creators are very happy about the feature. I feel that the video creators are totally divided when it comes to their opinion to this feature.

  As for the advertisers, I heard they are feeling this is a unique and unusual media which is situated between Internet advertisements and TV ads. This is something we have been feeling since we conceived the original concept for "Wii no Ma" but it appears to have a very interesting characteristic as "a device to validate the hypothesis." More specifically, we can learn, very quickly one after another, what kinds of response are made with what kind of visual presentations. Some advertisers have realized that possibility and are now requesting that they would like to try this and that by commenting that this is very interesting because they can receive the more immediate and more direct responses than any other means they tried on the Internet.

  We have been trying not to blame the economical downturn when our business is not good, but as long as "Wii no Ma" is concerned, we regret having to say that the "Wii no Ma" service made the start right at the worst timing that we could possibly imagine. More specifically, "Wii no Ma" was started right when all the corporations had to cut down on advertisements and when even the companies which have been spending so much on ads had to declare that they would not try any new things for a while. In other economical situation, more number of companies would have tried "Wii no Ma" by now. Even though people in charge loved the potential, when they tried to persuade the company management, they were requested to prove the cost-benefit performance first. But they couldn't because the service itself was yet to start. They might be able to prove it as soon as they were able to start, but some companies are prohibiting to start any new project unless the cost-benefit performance can be proved. Due to this circumstance, it is true that we have not been able to create the flow in which new advertisers one after another are able to start their new trials with "Wii no Ma". Having said that, however, we already have some solid feeling about the possibility of the "device to validate the hypothesis" which no other existing media were able to provide so far. From now, when the environment changes a little bit and many corporations can start to feel that they should tackle with something like this more proactively or that they should challenge something new, "Wii no Ma" may be able to become a very unique and interesting means. This is my observation.

Iwata:

  Between the two, I have more interest to Kindle-style business than iPhone-style one because the former is proposing a new business model without asking the customers to shoulder the communication fees.

  I myself am one of the iPhone users, and I understand that iPhone keeps a certain market share in the cell-phone market and that iPhone is the most successful product in the smart-phone category. On the other hand, because the original iPod business itself was big, my view is that Apple was able to leverage a very good timing to expand its business to telephones just when the original iPod business was nearing its saturation point. In other words, in my opinion, iPhone did not grow itself to a huge business, but something already grown up was able to prevent its growth speed from slowing down. However, the customers are confined to rather affluent ones who can afford to pay several thousands yen every month. Realistically, Nintendo does not try to reach out only to those who can afford to pay several thousands yen monthly. We are making entertainment commodities. The business model which requires our customers to promise to pay several thousands yen every month for the next two years does not suit well for the entertainment commodities.

  On the other hand, I find the business model of Kindle rather interesting. Once you buy the hardware, the 3G communication functions are already inside, so you are able to do a sort of the cell phone's packet communications. However, the customers do not pay money (directly for the communications.) When the customers make the download purchase of a book, that packet fees are included in the charge of the book. On the other hand, I read somewhere that they are yet to make a profit. Nevertheless, in this business model, customers are not required to shoulder the cost. And the service is now being expanded beyond the U.S. to the world. I do not know if the Japanese companies, say, telephone carriers, are happy about the business model. Probably, they are unhappy. Still, I think they were able to come up with a business model which is not bad.

  We are not saying we hate 3G technology. We are not denying the possibility of being able to increase what our customers can enjoy by connecting our products with wireless communications but it is subject to the condition that we do not have to ask our customers to pay monthly fees. Realistically, doing so will increase the hardware cost. We have to set the price of portable game machines that are affordable to the customers. Today, some people are already starting to criticize by saying that Nintendo, whenever it launches new model, is increasing the suggested retail price. Including the need to assess such questions as, "can portable gaming devices be more expensive than home console gaming machine?," as one of the future possibilities, we would like to review the possibility of being able to be connected wirelessly and how the trend in the technologies evolve in order for us to come up with our own solutions that can smartly take advantage of new technologies but does not require monthly payments by the customers. Wireless communications and portable game devices go hand in hand very well. We would like to continuously think about that in this fashion and hope to have our answer.

  Whenever I received the question, "Won't Nintendo integrate cell-phone functions to its portable game devices?", I always answered, "It will be OK if our customers do not have to make monthly payments." Basically, I have not changed that answer.

Iwata:

  To share with you the concrete prospect for the next fiscal year, it has to wait until the time the end of the year sales season is over and, without knowing the situation of each market then, we are unable to share with you any concrete figures.

  Having said that, however, we do not side with the so-called market platform cycle theory that video game business is making a certain cycle within so-so years and that, because Nintendo has already peaked out in this theory, the business will simply go down. To put this in another way, we are not making our plan with the premise that our business next year will be down. Instead, we are making our plan by considering how we can achieve increased sales and profits next year. When it comes to the concrete forecast for the next fiscal year, once again, we need to review and analyze the actual year-end sales. Most probably, we will share the concrete numbers next spring, after we will be able to determine the annual financial results.

Iwata:

  There are a number of free games playable on cell phones today. If Nintendo DS can only provide the same fun and satisfaction that the players can experience on the cell phones, our business model is destined to break down. This is similar to the situation many years ago, when cell phones started to advertise its feature to be able to play with video games on them and when many forecasted our Game Boy Advance business would be swallowed by the cell phones.

  A number of features that past Nintendo games were offering to its players were incorporated into free cell phone games, and these companies rely on another business model to receive the fees. From a certain perspective, it may be called a new competition. However, the key here is not to consider how we should confront with these companies. Rather, we have to ask such questions to ourselves as, "How can we ask our customers to be willing to pay their money in order to play software on Nintendo platforms?" and "What are the attractive experience that can be only realized on our platform?" If all what we can offer to our customers are similar to what free cell phone games or a number of iPhone games can offer, Nintendo's future is not bright at all. If, on the other hand, we can continuously offer the unique fun and attractiveness that only Nintendo platform can realize, Nintendo DS and any future products will not be swallowed by SNS-type game business, just like Game Boy Advance and Nintendo DS had not been swallowed by cell phones.

  Having said all these things, however, it does not make a lot of sense to us if we see them as the only competitors. We are regarding any and all types of entertainments as our rivals. We are always looking at them to ask for ourselves, "Is what we are proposing more worth the customers' time and money?" In other words, we do not see any one particular service or product as being a particular threat or rival for Nintendo. In the end, what matters to us is never to stay in the same place. If we had stayed just where we were with Game Boy Advance, and if we had failed to create such innovations as with Nintendo DS, Nintendo could not have come to the place where it is today. The situation has not changed, and we have to evolve all the time.