During Nintendo’s Q&A session for investors, an investor asked whether the number of units of hardware sold remains an important KPI after Nintendo changed its strategy from “expanding the gaming population” to the new basic strategy.

Nintendo President and CEO Shuntaro Furukawa said hardware sell-through remains an important key performance indicator (KPI) for Nintendo, but nevertheless the number of active hardware units and active users for each smartphone app are critical KPIs.

Furukawa explained that the number of active users are important because it means users are more likely to purchase other software.

Check out his full response:

Q3. You described the new basic strategy, which is “expanding the number of people who have access to Nintendo IP.” Did the importance of how many units of hardware have been sold change compared to before when you changed your business strategy from “expanding the gaming population” to this new basic strategy?

Furukawa:

During the presentation, I explained that we will continue to pursue the basic strategy of expanding the number of people who have access to Nintendo IP. Hardware sell-through (volume sales by retailers to consumers) remains very important as a key performance indicator (KPI), for our company, but I think that the number of hardware units in active use is an equally important KPI. The number of active users for each game application is another critical KPI for our mobile business, not just for the dedicated video game platform business, and we regularly track the numbers for both.

The reason why these numbers in active use are important is because consumers who continue to play with the hardware have more opportunities to purchase subsequent software. To keep consumers using the hardware, we must first and foremost continue to release new software, and we also need to provide ways such as add-on content so that consumers can play one title for a longer time. Making long-term services like Nintendo Switch Online more appealing can also contribute to maintaining the utilization of the hardware.

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