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2011 E3 Expo Analyst Q & A Session - June 8, 2011
Q & A
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Q 10   I think you made great strides in bringing console gaming to the mainstream audience. You definitely expanded the audience and it looks like Wii U will also do the same thing, but one thing I see as a missed opportunity is getting that mainstream consumer, who has other choices and is more likely to take free choices, etc., than say the hardcore gamer, to purchase a considerable amount of software. How will you get those consumers to buy more software? They may be less comfortable with making purchases online, which might be better value and easy to up-sell, so how will you increase the purchasing of your expanded audience?
A 10


  Among those people that we generally refer to as the "expanded audience," there are a large number of people who don't actively seek out information about video games.

  In other words, those people don't read gaming magazines to find out about what games are coming out, and they may not go directly to Nintendo's website to look at what new offerings we may have.

  So, with those people, what becomes incredibly important is how we reach them with our key messaging about which software they should purchase to truly be satisfied and have a good gaming experience.

  It becomes very important for us to match the consumers' expected levels of satisfaction to the largest extent possible because, if they spend their money on a product that they are not satisfied with or they don't enjoy playing, then that gives them an opportunity to drift away from playing video games.

  So then, it becomes a question of how well we understand the different tastes that those consumers have and how to meet the expectations that they have, and how we deliver our messaging to those consumers, who do not proactively gather gaming information, in a way that will help them understand that we have products that will satisfy them.

  Partially, the concepts that we had with both the Wii system and the Nintendo 3DS system were attempts to address this. With Wii, we wanted it to be a system that people would turn on and interact with every day, and with Nintendo 3DS, it's a device that we want people to carry around with them every day. So, in terms of how we can leverage an online system to try to address this issue, we're looking at ways that will convey to this audience which games are fun and, ideally, in a way that will enable people who are playing those games with others, to share that information socially. So, once we're in a position to share more concrete information about how we're going to do this, we will certainly do that, but I do think it's an important issue that we need to address and one where we hope to introduce some kind of big innovation.

Q 11   Given the sharp deceleration on a year-on-year basis of the Wii and the Nintendo DS, what gives you the confidence that we're not going to see a cash-burn situation before the Wii U is released, and if you're not concerned about that, why not?
A 11


  First, I'd like to reflect on what I shared earlier, which is: the more that our business shifts towards the late adopter and the late majority, the more that our sales tend to migrate to the holiday season.

  So, I think that looking at strictly the current sales situation and its year-on-year change for this particular season of business, and trying to project what that might mean for the full-year sales, is something that may be slightly difficult to do because of the nature of the holidays sales season.

  Also, I think that the scenario could change depending on what degree we are able to rebuild momentum for the Nintendo 3DS system.

  On the other hand, the primary reason that Nintendo's current cash position is so unique, in that we retain the current cash position in conducting our business, is due to the nature of the entertainment industry. The demand for entertainment products can be difficult to forecast and there is no minimum guarantee number of sales and, in the period after the release of a product, there are often waves of demand that perhaps are not consistent.

  Despite the short-term fluctuations, it's our responsibility to meet the mid-term and long-term expectations of our company. We're going to work our best to meet those expectations so you don't have to worry about that.

Q 12   How will you address the continuing threat posed by ever-improving games provided for mobile games and mobile devices – how do you see that threat evolving over the next several years? And, more specifically, how will you compete with the cheap or well-priced games?
A 12


  I gave a speech this year at the Game Developers Conference (GDC), and in that speech I delivered a message to the creators of video games that we were coming to an era where it was important to consider how to protect the sense of value that we have in video games.

  Unfortunately, after I gave that speech, I think there may have been some misunderstanding that the message that I was trying to deliver was that quality was more important than quantity, or that perhaps I was criticizing social platforms and mobile platforms, and the games that they had to offer, which wasn't my intention. My intention was to deliver a message to the creators of games that the question of the value that a consumer places on a video game is something that we, as developers, should be very sensitive to because, if we are not, it will become difficult to sustain the industry.

  Personally, I don't feel that there is competition or threat from mobile games for our video game business from the sense that, even before mobile games appeared, it's always been the nature of our job to continue to offer new experiences that players can't have on other devices, and that, as long as we can continue to do that, the consumer will want to play our games, but what we are sensitive to is the notion of the sense of value and what consumers are willing to pay for games.

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