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Nintendo Investors Meeting - Iwata on year-end sales, social networking, piracy, Miis, human interaction and more
On year-end sales…
About the most recent year-end sales situations around the world, at our Corporate Management Policy Briefing at the end of last October, I said that the 2010 year-end sales of our industry were anticipated to be affected by even stronger seasonality than before. However, until around that point in 2010, the sales of both Wii and Nintendo DS had been weaker than those in the corresponding period a year before, and most people in this industry appeared to have found it difficult to anticipate that the year-end sales would actually go in accordance with Nintendo’s scenario. Because Nintendo would not mark down the hardware, because it did not have titles as strong as “New Super Mario Bros. Wii” which had been able to change the total picture in the market only with one software title in 2009, and because it had already announced the launch of the new portable Nintendo 3DS in early 2011, they must have thought that it would be difficult for Nintendo to alter the situation only during the year-end sales season of 2010. From now, I’d like to share with you the actual year-end sales results.
On Japan’s 2009 year-end software releases vs. year-end 2010…
“New Super Mario Bros. Wii” was sold explosively and PS3 had “Final Fantasy” in the corresponding period in 2009 for home consoles, and, as I will discuss later, Capcom launched its new “Monster Hunter” title for the handheld hardware, PSP, at the end of 2010. Overall, the home console market in Japan in 2010 could not create the excitement that the industry had experienced in the 2009 year-end sales season.
On Wii’s performance in Japan for 2010…
Please note that 2009 included 52 weeks while 2010 was a 53-week year due to the different breakpoints in the data gathering. Even so, a significant year-on-year drop, or over 20% to be more specific, was found in 2010. This is probably contrary to your expectations, however, when we focus upon the market share within the Japanese home console market, Wii, in fact, increased its share by 1% over the previous year. In other words, the entire home console market in Japan shrunk last year.
On paying attention to the entire market…
When it comes to the question of whether we should focus only upon Nintendo’s own year-on-year comparisons or think also in terms of Nintendo’s presence in the entire market, I think the latter is a more well-balanced approach, and I am hopeful that you will take that stance.
On piracy issues and software tie ratio for DS in Europe…
The European handheld software market had once rapidly grown to a level which could be compared with that in the U.S. However, while the home console software market has been able to maintain a similar market size over the past two years, the handheld software failed to do the same in Europe.
It’s been said that the illegal copies of software have had significant impact in Europe. In addition, we analyze that another reason for the declining market size is the low active-use ratio of Nintendo DS hardware for the lack of new software titles selling very well.
On further promotions of Wii Party in North America…
When it comes to global big-hit sellers for Wii software, as a general rule, the U.S., which has the largest installed base of Wii hardware, sells the most units. However, this is not the case for the U.S. sales of “Wii Party”, and Europe has the top figure. We believe that this software still has potential in the U.S., so we are planning to further promote it in order to raise this number.
On Pokemon Black/White, and the Pokemon brand in general…
Pokémon has become entertainment which is enjoyed by people all around the world, and we will make efforts to maximize the sales potential of “Pokémon Black” & “Pokémon White” by sufficiently conveying the essence of the joy of this game which is full of fun.
On Battle & Get! Pokémon Typing DS…
We are also scheduled to launch a new game called “Battle & Get! Pokémon Typing DS” (Japanese title) in April. This touch-typing practice software features Pokémon, the aim of which is that our children will be able to touch-type without realizing it, just by enjoying playing the software.
However, this software is not aiming to appeal only to children. The developers have made it so that even adults who have mastered typing to some extent will find it challenging. I recently received an email from Mr. Ishihara, president of The Pokémon Company, which reads, “I thought I was not that bad when it came to typing, but I’m now deeply into this software as I cannot get a high score. I’m glad to be able to feel that, even at my age, I’m getting a bit better at how I use my little fingers.”
On social gaming, and Nintendo’s long history with those types of games…
2010 was not only called “the dawn of 3D” but, in the year 2010, the terms “social network” and “social games” were often discussed as social topics. It has been reported that social entertainment is the key to video games.
But we are wondering if the social play element is anything new in video games in the first place. Nintendo has been developing social entertainment in the field of video games for a long time. Social elements tend to be narrowly associated with human relationships through computer networks. We believe, however, that the essence of social entertainment is that the relationships with other human beings add a social nature to the play and make it more interesting. NES had two controllers from the start and Nintendo 64 was the first home console system to make four controllers available. The link cable for GameBoy allowed two players to compete in “Tetris” and later enabled the trades and competitions of Pokémon, and gradually these features were made available wirelessly. These were just some of the actual examples in the past.
There should be no doubt that Pokémon has spread around the world as a kind of social entertainment. Also, we have released various series of games in which four players can compete with one another including “Mario Kart” and “Smash Bros.” And recently in 2009, we released “Tomodachi Collection” (Japanese title) and “New Super Mario Bros. Wii” for four players. Nintendo has been aggressively integrating a structure where the interaction among different people through the games make the game play experiences much more fun. To Nintendo, social elements are nothing new at all.
I believe that you are also aware of many cases that people without any experience or interest in video games were prompted by others to start to play Nintendo DS and Wii, which have made these hardware systems so widely accepted. These are some typical examples in which the value of a product was spread through word of mouth, in other words, real human relationships or social networks.
On the unique challenge of explaining what the 3DS is and how it works…
In the conference for our presentation of Nintendo 3DS held last September, I told you that one mission we have to tackle in order for Nintendo 3DS to spread is the fact that you cannot comprehend the real value of the 3D images unless you view them with your own eyes.
In Japan we have aggressively held several opportunities for consumers to have hands-on Nintendo 3DS experiences, including the tryout event on January 8, 9 and 10, and we were happy to hear strong and positive reactions from most of them. The Japanese retailers started accepting pre-sale orders the other day, and the situation of the pre-sale appears to be good.
In addition, we have already realized the opportunities for consumers to try Nintendo 3DS at some outlet malls, are installing interactive units at retail shops and are planning to display demo 3D images of Nintendo 3DS at several train stations in Japan. However, there is a limit to the number of consumers who will be able to try it before its launch no matter how hard we work.
As I mentioned in the conference last September, with Nintendo 3DS, to tackle this challenge, we will leverage upon StreetPass and SpotPass.
And, we are promoting the Nintendo 3DS with the concept of “Carry Around, Affect Each Other and Something New Every Day.”
With these messages, we would like to encourage people to realize that Nintendo 3DS is a portable game device that you can carry around wherever you go and that your doing so will expand the entertainment experiences in combination with the wireless communications. At the same time, we’d like to encourage people to play their Nintendo 3DS with others when they go out.
On 3DS software variety, pack-in games and importance of Miis…
Nintendo 3DS will have a lot of pre-installed software including Nintendo 3DS Camera, AR Games and Face Raiders.
You can of course enjoy these software titles by yourself, and you can even enjoy them together with those around you when you carry around your Nintendo 3DS. We hope that the value of 3D images without the need for special glasses will be automatically spread through these experiences.
Some say that the launch software lineup of Nintendo 3DS lacks the variation required to appeal to a wide variety of consumers. However, we are including the software that can appeal to many into the hardware. By making it possible that every purchaser of Nintendo 3DS will receive these software titles, we are aiming to establish the stream in which the purchasers of Nintendo 3DS will naturally play the software with others surrounding them.
We anticipate that Mii characters, which were first proposed with the launch of Wii, will play an important role here. Mii characters were featured in “Tomodachi Collection” (Japanese title) and are familiar to many consumers.
Nintendo 3DS includes StreetPass Mii Plaza, in which you can collect Mii characters through StreetPass. Every Nintendo 3DS user can enjoy this form of entertainment which uses StreetPass.
In short, this software enables you to enjoy collecting various Mii characters by passing other Nintendo 3DS users. We have added two small games you can easily play. One is the game called “StreetPass Quest.”
These are such small entertainment features that we are reluctant to call them independent games, but I really feel that they have their own charm derived from passing by other Nintendo 3DS owners. Some development people in Nintendo carry around prototypes of Nintendo 3DS to test this software inside the office, and many of them even go back and forth in the building, without any business purpose, to collect as many Mii characters as possible or secretly check their Nintendo 3DS during meetings. In fact, I am also one of them.
Please don’t worry about your chances of experiencing StreetPass even if you are not living in an urban area and do not have many chances to pass by others. As Nintendo 3DS includes a pedometer, you can really enjoy this software through Play Coins you earn by your footsteps, as well as StreetPass.
On StreetPass/SpotPass details, offerings…
You can let up to 12 Nintendo 3DS software titles use StreetPass simultaneously in the settings you are looking at.
Because “nintendogs” was the first software to use Nintendo DS’s Tag Mode, “nintendogs+cats” naturally is going to be compatible with StreetPass. As for the pre-installed software, StreetPass Mii Plaza and Nintendo 3DS Sound are compatible with StreetPass. Also, some software, which will be launched simultaneously with the hardware or shortly after the launch, will be making use of StreetPass.
If I can pick up some of the examples, Capcom says that, with their “Super Street Fighter IV: 3D Edition” game, the players can choose the figurines they can obtain in the game and form a team with these figurines, which can be automatically exchanged with others through StreetPass. Then, a battle can take place automatically. You can not only enjoy seeing the results but also may be able to receive the figurinees depending on the results.
In Bandai Namco’s “Ridge Racer 3D”, the ghost data can be exchanged through StreetPass, and you can compete with the ghost.
In Tecmo-Koei’s “Dead or Alive: Dimensions”, the character parameters, which shall be determined by a player’s play pattern, shall be exchanged and, as the result, you will receive a challenge from the character, they say.
In Konami’s “Pro Evolution Soccer 2011 3D” you can exchange the players and formations that you have registered. A kind of simulation game is played using these parameters.
The Tag Mode of Nintendo DS was enjoyed by a huge number of people through “Dragon Quest IX.” Now, we are looking forward to the expanded ways to enjoy the new StreetPass function.
On valuing real human interaction over social networking via PC…
When you hear the term “social network,” it generally means a service taking advantage of social human relationships through a constantly connected network with smart phones and PCs.
In contrast, Nintendo appreciates real human relationships among people carrying around Nintendo 3DS and enjoying it with others. In addition, we would like to combine StreetPass, which automatically happens to those who are located in the same place by chance, and SpotPass, which unexpectedly happens to those who pass an access point. With these features, we hope to make relaxed human relationships composed of a wide range of consumers no matter how actively or not they communicate with others and as a result, to widely spread Nintendo 3DS and further expand the gaming population.