Enterbrain revealed earlier this year that the overall Japanese games market shrank in 2008, and MCV recently predicted that the UK is on track to overtake Japan and become the second largest games market in the world.
“If the US sold two or three times as much as Japan, it would be tolerable,” Iwata stated. “Yet, I feel that something is wrong when the US is selling ten times as much as Japan on a weekly basis.
“Perhaps, the Japanese market is the least robust market in the world today with regard to home console systems. In the US, the home console market is very robust. So, I do not believe Nintendo should be content with the current situation in the Japanese market and believe that we have other methods to confront this.
“At the end of last year, Nintendo launched two Wii titles, Animal Crossing and Wii Music, in hopes that the Japanese consumers would appreciate them and revitalise the Wii market in Japan. Our efforts have not lived up to our expectation. While Wii had very strong momentum in the overseas markets, the Wii market in Japan (during the year-end sales season) showed a slow start, did not show sharp trajectory in sales, and ended up moving back to the sales level of non-sales-season level quickly.
“So, what happened at the end of last year in Japan was simply that it did not go as we had planned. To generate strong sales, we need to effectively communicate Nintendo’s messages to our consumers. Of course, the level of sales of Wii Music and Animal Crossing are nowhere near that of failing software. However, because there is a software that clicks with everyone, you get one consumer after another who want to play with it by purchasing the hardware.”
To read Iwata’s complete investor call, click here.