Nintendo E3 Analyst Briefing

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(These Q&As were conducted in English. An interpreter translated Satoru Iwata’s answers into English.)

1	You briefly mentioned the release schedule for third-party software developers in your presentation, but I got the impression that you focused on Nintendo titles when I attended the Business Partner Presentation yesterday. I want to know how you are planning to draw more third-party software developers to Nintendo platforms amid intense competition.
1	Satoru Iwata (President): We will release a succession of Nintendo titles from the latter half of this year to enable the Wii U platform to regain sales momentum. This momentum will create business opportunities for software developers, so I think that the support from them will change in due course. Another important point, as I explained earlier, is that there are third-party software developers actively working on software for Wii U right now. I think that it is very important that we see some favorable results from among these titles. If software developers decide not to support a platform when, in fact, it has momentum and other software developers have experienced good results, people will definitely question their decision.

You briefly mentioned the release schedule for third-party software developers in your presentation, but I got the impression that you focused on Nintendo titles when I attended the Business Partner Presentation yesterday. I want to know how you are planning to draw more third-party software developers to Nintendo platforms amid intense competition.

Satoru Iwata (President):

We will release a succession of Nintendo titles from the latter half of this year to enable the Wii U platform to regain sales momentum. This momentum will create business opportunities for software developers, so I think that the support from them will change in due course.

Another important point, as I explained earlier, is that there are third-party software developers actively working on software for Wii U right now. I think that it is very important that we see some favorable results from among these titles.

If software developers decide not to support a platform when, in fact, it has momentum and other software developers have experienced good results, people will definitely question their decision.

2	One of the key differentiating features of Wii U is “asymmetric gameplay,” but consumers have not yet understood it. How will you communicate the value of asymmetric gameplay to consumers to encourage them to purchase a Wii U system during the year-end sales season when it has to compete with Xbox One and PlayStation 4?
2	Iwata: “Asymmetric gameplay” is one of the important elements which differentiate Wii U from other products. Thus, we have released “Nintendo Land” as the software to make consumers understand the value of asymmetric gameplay. In the United States, we bundled it with the Wii U “Deluxe Set” which is a higher-end model equipped with 32GB of memory. We have received a lot of comments from consumers that the gameplay in “Nintendo Land” is interesting. However, we presume that they have not yet come up with the best words to easily explain how interesting it is to other people. I would say that “Nintendo Land” has not fulfilled the same role as “Wii Sports” did when we bundled it with Wii. Of course, we won’t remain silent and do nothing. We are going to release a variety of Wii U software, and with each title, we would like to show how convenient and delightful it is to have the Wii U GamePad controller, and how it changes the gaming experience. In addition, we have also learned that the name “asymmetric gameplay” does not fully explain the GamePad’s value to consumers. As for the software going to be released from now on, we would like to describe the experience that the GamePad provides with a different expression in order to adequately convey its necessity to consumers and increase the number of consumers that think, “Indeed it is good to have a GamePad.” In this sense, starting with “Pikmin 3,” we aim to include functions that make good use of the GamePad that consumers can appreciate.

One of the key differentiating features of Wii U is “asymmetric gameplay,” but consumers have not yet understood it. How will you communicate the value of asymmetric gameplay to consumers to encourage them to purchase a Wii U system during the year-end sales season when it has to compete with Xbox One and PlayStation 4?

Iwata:

“Asymmetric gameplay” is one of the important elements which differentiate Wii U from other products. Thus, we have released “Nintendo Land” as the software to make consumers understand the value of asymmetric gameplay. In the United States, we bundled it with the Wii U “Deluxe Set” which is a higher-end model equipped with 32GB of memory. We have received a lot of comments from consumers that the gameplay in “Nintendo Land” is interesting. However, we presume that they have not yet come up with the best words to easily explain how interesting it is to other people.

I would say that “Nintendo Land” has not fulfilled the same role as “Wii Sports” did when we bundled it with Wii.

Of course, we won’t remain silent and do nothing. We are going to release a variety of Wii U software, and with each title, we would like to show how convenient and delightful it is to have the Wii U GamePad controller, and how it changes the gaming experience.

In addition, we have also learned that the name “asymmetric gameplay” does not fully explain the GamePad’s value to consumers. As for the software going to be released from now on, we would like to describe the experience that the GamePad provides with a different expression in order to adequately convey its necessity to consumers and increase the number of consumers that think, “Indeed it is good to have a GamePad.” In this sense, starting with “Pikmin 3,” we aim to include functions that make good use of the GamePad that consumers can appreciate.

3	It is very interesting to find out that Nintendo plans to accelerate its digital business and in particular offer free-to-play games (games that can be played at no cost and offer in-game purchases) for the first time. Could you please elaborate a little more on how Nintendo will go about doing this? Are you going to release a brand-new IP as opposed to an existing IP? And how will that affect the company’s packaged software business?
3	Iwata: The ability to offer software in a digital format has given us greater flexibility in terms of how we offer our products to consumers and how to monetize them. However, we are not planning to offer, for example, Mario or Pokémon games in a free-to-play format. With games like Mario and Pokémon, we already have a sufficient degree of trust with our consumers who are willing to pay a certain sum of money to purchase our products as packaged software. On the other hand, what are we to do when we want to offer a completely new product whose value consumers are yet to understand? Consumers are not sure if it is worth outlaying a certain sum of money for such a product. In such circumstances, our current platforms (Nintendo 3DS and Wii U), which give us various monetization options that would not have been possible on past Nintendo platforms, enable us to make propositions in a free-to-play format. Nintendo has so far focused on our packaged software business, but we are planning to take on the challenge of releasing free-to-play games too. I believe we will be able to make concrete propositions within this fiscal year. On the other hand, free-to-play games, if unbalanced, could result in some consumers paying extremely large amounts of money, and we can certainly not expect to build a good relationship with our consumers in this fashion. In order to have a favorable long-term relationship, we would like to offer free-to-play games that are balanced and reasonable.

It is very interesting to find out that Nintendo plans to accelerate its digital business and in particular offer free-to-play games (games that can be played at no cost and offer in-game purchases) for the first time. Could you please elaborate a little more on how Nintendo will go about doing this? Are you going to release a brand-new IP as opposed to an existing IP? And how will that affect the company’s packaged software business?

Iwata:

The ability to offer software in a digital format has given us greater flexibility in terms of how we offer our products to consumers and how to monetize them.

However, we are not planning to offer, for example, Mario or Pokémon games in a free-to-play format. With games like Mario and Pokémon, we already have a sufficient degree of trust with our consumers who are willing to pay a certain sum of money to purchase our products as packaged software. On the other hand, what are we to do when we want to offer a completely new product whose value consumers are yet to understand? Consumers are not sure if it is worth outlaying a certain sum of money for such a product. In such circumstances, our current platforms (Nintendo 3DS and Wii U), which give us various monetization options that would not have been possible on past Nintendo platforms, enable us to make propositions in a free-to-play format.

Nintendo has so far focused on our packaged software business, but we are planning to take on the challenge of releasing free-to-play games too. I believe we will be able to make concrete propositions within this fiscal year.

On the other hand, free-to-play games, if unbalanced, could result in some consumers paying extremely large amounts of money, and we can certainly not expect to build a good relationship with our consumers in this fashion. In order to have a favorable long-term relationship, we would like to offer free-to-play games that are balanced and reasonable.

Presentation | Q & A