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Nintendo Conference Q & A Session - September 29, 2010
Q & A
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Q 4 I have the impression that the games your company makes are for young children or for families. When I heard about your intention to intensify the communication capabilities, I thought they were more for the core users who are different from your existing consumers, and it sounded as if it contradicts your objective to "expand the gaming population."
A 4


The impressions you expressed right now are not consistent with our thinking. Whenever I talk about "gaming population expansion," I make a point of adding, "regardless of age, gender and past game-play experiences." We hope as wide a range of people as possible, from the avid players who have plenty of game-play experience to even the people who have never thought of or been interested in video games at all, will be our consumers.

The fact that our games can be played by children and by the entire family is our great characteristic, and we are proud of how our products have been appreciated in that way. However, we have never designed our products solely for children or only for family use. We have been strongly hoping that our products can be enjoyed by any and all people. In other words, we have not changed our policy at all. We are intensifying the communication capabilities so that we can create an environment where those who until now had no interest in and had never cared about such wireless communications can have meaningful experiences through StreetPass or SpotPass. We are hopeful that they will feel, "It's actually fun," and make new discoveries.

About the users who have already been playing video games actively, a number of them have enjoyed the games with communication capabilities, but even such game players must have hardly experienced something just like what we are now proposing with StreetPass and SpotPass, with which a number of things can take place (through the communications) while Nintendo 3DS is in its sleep mode. We believe these users too can experience something unusual. Since the launch of "Dragon Quest IX" last year, its Tag Mode communications have become a social phenomenon, I believe. If we can make similar situations happen with a number of other games, if the communication capabilities can be used in a variety of different ways, and if an increasing number of people accept our offers, it could eventually lead to an increase in the number of people who are willing to enjoy games on Nintendo platforms.

Q 5 What are you expecting to achieve regarding the link between home consoles and Nintendo 3DS? In which future direction are you aiming to head in this regard?
A 5


Home game consoles and portable handheld game devices each have their own advantages, so we would like to make the best use of each platform. While one of the possibilities is that Nintendo 3DS could communicate with our home console through SpotPass, I have nothing concrete to confirm today as to what Nintendo 3DS can do when it is linked with the home console. On the other hand, because we would like to aggressively pursue the concept of "always carrying around the handheld game device itself becomes an interesting entertainment experience," it is very likely that we will consider a link with our home console.

Q 6 During the presentation today, you repeatedly emphasized that you are keen to intensify the network communications abilities of Nintendo 3DS. Is the company intending to create a number of Nintendo Zone services outside Japan as well? Has the Tag Mode communication of Nintendo DS ever become as popular in other countries as it is in Japan?
   I also have a question about the profits. In my understanding, your company has been trying to raise the Internet connection ratio of your hardware in order to raise the active usage ratio of your hardware and, then, you are thereby aiming to raise the profits from the packaged software as a result. Is the company now expecting a decent profit from the network activity itself?
A 6


Let me first explain about the Tag Mode communications in the overseas markets. As I said before (in my presentation), regarding Nintendo DS in Japan, a number of people were able to experience Tag Mode only when socially phenomenal software appeared. For frequent Tag Mode communications to take place, there needs to be socially phenomenal software with many users, and the users with that specific software need to have a reason to carry around their Nintendo DS. In addition, such players need to pass by each other within a certain distance at a relatively slow pace. When we compare the circumstances in Japan with that of, for example, the U.S., there are such issues as how much data can be communicated by the users who are in two separate cars driving on a road and, as a result, we are not aware that Tag Mode has ever become a social phenomenon in any overseas markets.

The "Dragon Quest IX" game was (already) launched in some overseas markets too. In Japan, we understand that the games in the "Dragon Quest" series sell massive volumes of the software in the launch weeks and that additional huge amounts sell within a short period of time afterward. For those who are accustomed to such Japanese sales trend, the overseas sales of "Dragon Quest IX" so far may not be highly appreciated. On the contrary, when I listen to the opinions from those who are in charge of the game's sales in the U.S. and in Europe, or more specifically people at NOA (Nintendo of America) and NOE (Nintendo of Europe), my impression is that this Dragon Quest game is gradually increasing its consumer base. For example, when they held a Tag Mode event in Paris, I heard that those who experienced Tag Mode communications enjoyed this unique experience very much. Some may wonder things like, "In this age of the Internet, when you can communicate wherever you are, can anything which requires having to pass by each other physically provide any meaningful fun at all? The fact is, when two people who happen to have common interests are in the same place by chance and if they communicate with a total stranger in an unexpected way, they appear to feel very surprised and enjoy such an encounter. Accordingly, I hear that, each time we hold such an event, the number of the participants gradually increases.

The company has been executing a variety of marketing activities in order to make "Dragon Quest IX" one of its evergreen titles, through which we are feeling the gradual spread of its popularity. When we attend events with certain objectives, Tag Mode communications can take place more easily. Gatherings of video games or animation fans are being held in overseas markets as well. I hear that Tag Mode communications take place more frequently at such events.

I happened to hear a story of a person who has experienced Tag Mode communications of "Pokémon Black and Pokémon White" with more than 100 people just today at Nintendo Conference 2010. So, when you bring your Nintendo DS to events and places where people with similar purpose gather, this sort of thing happens, and it is taking place in the overseas markets as well.

It is important for us to provide relevant pieces of information gradually one by one so that our consumers can comprehend and appreciate the value of our new proposals. I discussed SpotPass communications today. We recognize that more careful attention must be paid to how we propose it in the overseas markets than in Japan. We must be able to offer clear-cut reasons for the overseas users to be willing to carry around Nintendo 3DS when they go out. Although we have not come to a conclusion on whether we should explore the possibility of the likes of Nintendo Zone or, like our collaborations with NTT East and NTT West, should deal with the entities which are offering free Wi-Fi access points, we are eager to proactively expand the access points so that an increasing number of people in the U.S. and Europe too can feel that it is fun to carry around a portable gaming device wherever they go out. If we can make this happen, more and more, StreetPass will happen naturally. Because the possibility of such unexpected interactions on the road can more frequently take place with Nintendo 3DS, we want the culture of StreetPass to be established in the overseas markets.

As for the aspect of profit, we are expecting that profits through the network activities will grow in the long run. However, as I have often said on these types of the occasions, we human beings do not change our habits very quickly. If this world was full of the so-called "early adopters," who are highly sensitive to information and quickly respond to anything new, the world could change more quickly. The fact is, the majority of us are not in that category. Accordingly, for some time in the future as well, the packaged goods business will remain to be our mainstream business. On the other hand, network elements are very important in order to heighten the value of the packaged products or in order to offer unprecedented fun, which can be a topic in society. Our current thinking is that we would like to aggressively explore such usage.

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