Iwata: Wii U could be just one game away from reversing fortunes

Nintendo boss Satoru Iwata has said that one big hit could still be enough to cause Wii U sales to rocket.

Following the generally accepted theory on platform lifecycles, it is natural for you to presume that the sales of Nintendo 3DS will drop X per cent each year or we cannot expect a huge increase in Wii U sales,” he told investors in a now translated Q&A. On another front, we have witnessed one single software title completely change the entire picture of our business many times.”

Iwata cited the example of the Game Boy, whose sales spiked well into its life cycle following the debut of Pokemon.

The Nintendo president also returned to the ever-looming prospect of Nintendo games on smartphones.

We recognise that we need to make changes in various areas, and consider how we can take advantage of smart devices and more actively use our character IP,” he explained. Please do not take it the wrong way. It does not mean that we are going to proactively utilise smart devices and character IP because we are not making enough profits from our dedicated video game platforms.

We are willing to do so for that will create a synergy effect to expand our dedicated video game platform business. Of course, we will probably make profits from our character IP business, and Amiibo is already having a positive impact in its initial phase of business. Still, it is obvious that we cannot easily achieve the same sales and profit level only with Amiibo as the peak times for our dedicated video game platform business. Therefore, we should consider how we can boost our core business, that is the dedicated video game platform and software business.”

For the last few years I have been wondering
whether people inside the company have a
clear image as to exactly how we could expand
the gaming population…The real issue seemed
to be that people inside the company appeared
to be obsessed with the belief that Nintendo
is a company that makes video games and
should make nothing else. In the past year, I
have been repeatedly saying this message
internally at Nintendo. As a result, such a
misbelief that Nintendo is solely a video game
company that can make games and nothing
else has waned a bit inside the company"

Satoru Iwata, Nintendo

There was also some more firm prediction for Nintendo’s new Quality of Life unit, which Iwata thinks will begin generating profit in the financial year ending March 2017.

You cannot expect a company that has been making all of its revenue from the video game business to suddenly turn out half of its revenue through the QOL business in just one year,” he added. This kind of change requires several years. I give first priority to the improvement of our core business. In addition, I envision added profits from our new businesses and then eventually we will be able to achieve Nintendo-like profits. That is all I can tell you today.”

In a more surprising move, Iwata then went on to question the judgement of some within his own organisation, perhaps demonstrating the extent of the pressure that he has found himself under in the last two years.

Specifically, he wants colleagues to accept that in the same way that Nintendo once transitioned from card games to video games, it could conceivably change again in the future. In fact, Iwata stressed that the company is duty bound to continue thinking of expansion.

For the last few years I have been wondering whether people inside the company have a clear image as to exactly how we could expand the gaming population,” he admitted. We could not show a significant difference to our consumers as long as we were repeating similar things that we had done with Nintendo DS and Wii.

We released Wii Sports Club and Wii Fit U for the Wii U system, but they did not have the same strong impact that the original Wii versions had. Those who have tried these Wii U games know that we have actually realised a variety of new things, but at a glance, they look just similar to their predecessors. I realised that we would have to redefine our definition of video games in order to cope with this situation.

The real issue seemed to be that people inside the company appeared to be obsessed with the belief that Nintendo is a company that makes video games and should make nothing else. This is one of the reasons we revised our definition of entertainment and why I announced that Nintendo’s goal for the next ten years is to ‘improve people’s QOL in enjoyable ways’.

In the past year, I have been repeatedly saying this message internally at Nintendo. As a result, such a misbelief that Nintendo is solely a video game company that can make games and nothing else has waned a bit inside the company. They have started to think more broadly about what they can do at the company.

Our history attests that Nintendo is not a company that has only made video games. Making video games is the path the company chose because it was the most effective business and because it was where the company was able to capitalise on its strengths. However, before we knew it, people who were newly hired by the company, as well as the people who had been working many years at the company, started to think that Nintendo is a company which should only make video games.”

None of which, Iwata asserts, means that Nintendo is in any way stepping away preparing for a life away from its core games business.

Let me assure you that Nintendo is not trying to distance itself from video games,” he insisted. We have never ever lost our passion for video games and will continue to make them. On the other hand, if people inside the company think that Nintendo is a company which cannot make anything other than video games… a high mental wall would stand in front of us when we tried to create a brand new video game genre with which many people would be amazed or when we try to create an unprecedented user interface that pleasantly surprises people.”