As for reasons why the Nintendo 3DS is having a tough time, for me, as one user, but the 3D visuals themselves do not match very well with video games. Are there any discussions like that internally? This was also the case for the Nintendo DS where a revolutionary and unexpected software like Brain Age was launched and activated the market, and I assume that a revolutionary software like that is under development but, in the near future, can we expect something like that, which is not a big title or a sequel title, for the Nintendo 3DS? You mentioned that we would need to wait until the holidays for the measures to take effect but my first impression was that the response speed is very slow. I think that speed is the primary issue. What is your view?
First, regarding your opinion that "3D may not match with games," I, of course, understand that how well the 3D visuals appeal differs between people and even opinions inside the company vary from "3D is very appealing" to "I don't feel attracted to it very much." Therefore, I do not think that every consumer will be satisfied with just the 3D visuals. On the other hand, the 3D visuals are not the only appealing point of the Nintendo 3DS. 3D is the clearest difference of Nintendo 3DS that can be understood by anyone, but there are many other points that differentiate Nintendo 3DS from the others, and without making a comprehensive judgment by taking these aspects into account, the true value of new games for the Nintendo 3DS will not be visible. Accordingly, we are aiming to make content that would also satisfy people who feel that 3D does not match with games. For example, we have announced that we will launch Super Mario 3DLand and Mario Kart 7 at the end of the year, and since these games will be launched when such an impression you have is there, if these software titles were to be regarded as software which had no value except that it looks like things are popping out, obviously, we would fail.
Of course, we are preparing to make different points of the software appealing. So, the first point that I would like you to understand is that there are individual differences when it comes to how one views the relationship between 3D and games and that, although some people feel that 3D visuals and games do not integrate so well, 3D is not the only appealing point of the Nintendo 3DS, so we would like to ask for a comprehensive evaluation.
Software such as Brain Age and Wii Fit have become such great hits that people often ask questions about the next unexpected big hits like Brain Age or Wii Fit. But even if I said something like, "We have prepared the next revolutionary stuff like this," it is usually a type of software that people think, "How in the world would this sell?" However, the software which compels you to hold such a doubt, when it can become an explosive hit, can become a really great product. Therefore, there is no reality even if we say, "We are developing something like this and it will sell just as Brain Age did." It is not a game which looks like Brain Age, but we will be proposing something that consumers did not categorise as a video game in the past. It may be a Nintendo 3DS function, a new packaged software, software sold at the Nintendo eShop, software once sold at the Nintendo eShop then sold as a packaged game (like "Art Academy" for Nintendo DS) or something else, and out of those proposals we cannot tell exactly which one or ones of them will become big hits, so we are considering multiple proposals. Some of them will come out during this fiscal year and some are planned for next fiscal year. We hope, in the end, you will look back and say, “that particular software further accelerated the penetration of the Nintendo 3DS.”
After all, the titles that we can promote well in advance of the launch are the established franchise titles. Series titles appeal in the early stages, even if the framework of the game is not complete, because consumers can already recognise their value. On the contrary, please understand that it is this industry’s fate that the newer the concept is, it needs to be complete and experienced by consumers in order to be accepted.
Also, when we say, "please wait until the end of the year," this does not mean that we will not do anything until the end of the year, but our intentions are that the effects of the markdown will be maximised at the end of this year, so we believe it would make more sense to evaluate the future of Nintendo's business around that time when the effects are maximised. Therefore, it obviously does not mean that we will not be doing anything until the end of the year. On the other hand, if there are suggestions or criticisms that an occasion was missed because of Nintendo's actions or behaviours, then there should be points where we must accept and learn from those suggestions or criticism and utilise them for the benefit of our future.
Why were you able to make such a price cut for the Nintendo 3DS? A typical Japanese company would be very slow when making decisions. I would like to know whether Nintendo's decision was made by Mr. Iwata solely or whether it was an organisational decision. Also, I would like to hear about development resources. One, I believe that your internal resources are devoted to the Wii U, Wii, Nintendo DS and Nintendo 3DS, and out of these, since the Wii U has rather rich content, aren't most of your internal resources being used for the Wii U? When aiming for a comeback for the Nintendo 3DS and also expanding the Wii U, how do you plan to spare your internal resources? The other question I have is about the third parties. An increasing number of them are not taking a strategy similar to that of Nintendo, which is aiming to sell its software to a wide range of consumers without focusing upon any particular group, but are instead shifting to a more focused audience by, for example, realising more than half of the initial sales with the limited premium edition of the game. As a result, these third parties do not develop games for your platforms that can appeal equally to the wider audience. How do you deal with such a situation?
Maybe the reason we were able to make the markdown decision is our lesson from Nintendo GameCube. Therefore, in that sense, it was slightly a personal decision, meaning that the current executives, who are the ones who make the decisions, all experienced, "there was a chance for the Nintendo GameCube but we were not able to capitalize on it," and I think that was a large factor, that the executive all shared this sense, not just myself. One other factor is our financial characteristics. I have repeatedly said, "Please allow us to hold high liquidity of assets since this business has very high risks. We can have more options if we have high liquidity." During those days, when the Wii and the Nintendo DS were in a continuous good cycle, we had cases where people asked us, "Well, won't you be all right even without holding so much cash?" But it must be a factor to our ability to make decisions like these under situation like this, and along with this, proceed with the development of the Wii U and take on its business risks. We will put our best efforts to make this decision a good one.
Regarding the resource issue, it is obvious that the resources of our development teams are challenged during the transitional phases of the platforms. When we have a situation where we need to stimulate and maintain the momentum of the current platforms, and we need to prepare for the next platform, it is no surprise that we become short of hands. It would be a lie if we said that we were not facing any challenges inside Nintendo in respect to this situation. However, on the other hand, we are currently dividing "what we really need to do internally" and "what we need to work on together with an outside team" somewhat more boldly than before, and shifting to ask for more assistance from outside. There are some areas where such attitude can be easily understood, but it is not always the case. For example, for some software titles, people may feel, "This is a main title of Nintendo, why isn't this being developed internally?," but we have asked for outside assistance in a situation where we were able to make high-quality software by asking outside developers to support us in a way we can maintain the quality. By doing so, we have been able to tackle the issue of development resource allocations by being able to secure, in effect, dozens of additional people. We are actually making these decisions in several places and, although things are not easy all the time, we do not think they are big ones that can not be resolved.
Regarding third parties, for the Nintendo DS, there were many successful titles from the outside publishers which created good cycles, but for the Wii, although there were some successful titles in the overseas markets, there were no definite successful titles in Japan. Right now, we are closely communicating the plans for the Nintendo 3DS and the Wii U to various publishers, and we are well prepared so that what happened to the Wii will not happen to the Nintendo 3DS or the Wii U. It is the most important thing that we can establish a success case in the early period of the platform. That way, everyone would think, "Let's follow that," and they will be able to visualise a pattern, "We can appeal to consumers in this way," and I think it is important for us to put efforts toward being able to raise this visibility.