As part of Nintendo's recent earnings report, Nintendo president Satoru Iwata fielded questions from across the globe. We've collated his development related comments hereâ?¦

Iwata On…

On user-generated content:

The reason why we feel the potential of the User Generated Content (UGC) through the Internet is because the fun that is generated by UGC can be appreciated by a higher percentage of our consumers as a fresh experience.

In the dawn of video game history, consumers used to react positively to the ideas that game creators incorporated into the software, but they gradually got accustomed to the existing surprises. Then, an increasing number of people started to come to expect the surprises in the software and it became increasingly difficult to offer them fresh surprises. What’s worse, once they experienced almost all the game elements, they felt that there was nothing more for them to experience. Once they see the game creators’ ideas, they give up playing with the video games or sell the hardware to the second-hand shop.

We hope that the consumers don’t reach a point where they would feel that they’ve experienced all that is there to enjoy. We would like our consumers to enjoy a software as long as possible. If one game can be played for a long time, it means that the consumers have a high level of satisfaction. More importantly, if one product can continuously provide consumers with fresh surprises, it can lay out a good foundation for our next steps.

When we thought about the many possibilities of games in this way, we started to think beyond the configuration where game creators develop all the experiences. This was supposed to be the appeal of network gaming. However, before UGC surfaced, network gaming had usually meant that a number of people were gathered in one place in order to compete with each other. With competitive games while some people become very excited, we saw that the platform became too intense for novice players to join as they felt the widening gap in the skill levels between an experienced and a new player.

Because Nintendo has been striving to expand the gaming population, the more we went towards that direction in network gaming, we felt that the hurdle became higher for those who were not accustomed to playing video games to enter into the market, and that this was not the solution to the problem While we can solve the issue of having others develop game experiences, we could not solve the other issue of having as many people as possible enjoy video games.

This is where UGC comes in. There are some people, although they may be a minority, who love to create something creative, share that with others, and enjoy seeing other people being entertained or responding positively to their creation. At the same time, the great majority of people are rather passive and love to applaud the creative efforts by others and enjoy playing with them. In other words, UGC has the unique characteristic that, regardless of their game skills, people on both sides can enjoy.

An example from Nintendo is a DS game called “Band Brothers”, which has a music composition mode. Players can compose music and submit the music to our server, which can then be downloaded and enjoyed by others. Roughly ten times or even 30 times more people are enjoying the downloaded music as much as the number of people who are submitting, and both sides are happy. This is exactly what we would like to realize with the DSiWare software called “Flip Book.”

The reason why we have seen the results that we’ve had with the “Girls Mode” software must partially be because we were just fortunate to some extent, and also because the consumers were there where we thought they might be, responded to it, and received our message. Plus, a number of fans were able to enjoy a very unique and unprecedented experience for them where they are able to operate their own shops on the Internet, have people visit their shops, and purchase products there. Such an extra note of surprise appears to have acted as a trigger to let the fans enjoy the whole experience.

On cultural differences:

And as you mention, there is a gap of cultures between countries. The gap in time that the DS took to expand the gaming population is largely caused by the gap of lifestyles, as you mention.

In Japan, as the number of people who saw DS players in trains skyrocketed early on, its recognition spread extremely fast as it peaked the curiosity of even those who were not interested but wondered what the gadget was. In the United States, on the contrary, not only are passengers not sleeping nor using cell phones, many Americans do not regularly use trains and instead use their cars to commute. So their ways of how to spend time on the go differs, and as a result, how, when and where portable consoles are played in their daily life will also differ.

On the other hand, we faced the same doubt years ago, when we launched software like “Donkey Kong”, “Super Mario Brothers”, “Pokémon”, “Nintendogs” or ”Brain Training”. Many were skeptic of these being accepted overseas.

What Japanese people simply found interesting and favored was also welcomed overseas in many cases, with appropriate communication. Of course I don’t mean that all that Japanese people favor will be accepted overseas. What I mean is that with the essence of fun, what people find interesting can overcome culture and language gaps When I was trying to pitch “Brain Training” to our marketing people in the U.S. and Europe after the software had shown the strong sales in Japan, I never imagined that “Brain Training” would sell twice as much in overseas market than in the Japanese market. It was the same in the case of “Pokémon” where I was told by the local staff that this yellow, cute creature would never make it (It would never be accepted!) ”

So my understanding is that culture gaps can be overcome. And I think what is necessary is not to change the product itself, but how we introduce and show the features.

As we strive for the expansion of gaming population worldwide, we are also thinking of developing products that cater to the American or European markets. We are actually working on U.S. and Europe-originated Touch Generations products, which may have a smaller demand in Japan than overseas. I can not tell if it will go well or not at this moment. I think one or two of these initial trials will reach the market within this year. If they actually flourish, I think our strategy will have to take the next step.

Source: Nintendo Investor Relations

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