Previously, we reported on some comments from Nintendo president Shuntaro Furukawa about Nintendo’s Q2 performance. The original snippets were brief, but painted a decent year for the company.
Thanks to a new document from Nintendo of Japan released today, you can now check out Furukawa’s comments in clear English.
The document is lengthy, however – so readers may want to take a seat before trying to get through all of it.
Holiday strategy:
Q1
Regarding the broadening of our user base, we expect there are still plenty of people who have played Nintendo games in the past but have not yet purchased Nintendo Switch. It is our view that we have not fully communicated the appeal of the system to these consumers, so it is important that we adequately convey the unique capabilities and appeal of Nintendo Switch to them. Likewise, there are people out there who play video games, but have never bought a Nintendo system. It is important that our messaging to them clearly shows that there is a more varied lineup of more titles including ones from other software publishers to play on Nintendo Switch than on previous Nintendo platforms. Plus, they can bring their systems with them to play local multiplayer together, and they can play these games on the go instead of only in front of the TV, all thanks to the unique play styles made possible by Nintendo Switch. Finally, it is important that we communicate the appeal of Nintendo Switch to people who seldom play games. Regarding our approach to consumers who do not normally play games, with Nintendo Labo being one of the ways, we attempt to promote long-term sales that go beyond this holiday season.
Pre-orders are going well for Pokémon: Let’s Go, Pikachu!, Pokémon: Let’s Go, Eevee!, and Super Smash Bros. Ultimate. We will actively promote these titles via television commercials and other advertising methods in several regions, so we expect pre-orders to grow even further.
Software value:
Q2
We take the value of software very seriously. What we want with our evergreen titles is to maintain their values as long as possible without lowering the prices.
Going third party :
Q3
Q4
Sales momentum :
Q5
As for our software release plans for the next fiscal year and beyond, we have not disclosed all the information yet. We are currently discussing initiatives for the next fiscal year and beyond based on this fiscal year, and we will talk about those at a later time.
Approach to Switch sales going forward :
Q6
Although software is the most important factor for selling Nintendo Switch across a long lifecycle, also important is the question of how many people we can get to appreciate the inherent appeal of Nintendo Switch and the uniqueness of the system. The methods we use to convey that appeal to someone who has played Nintendo games in the past will not be the same as the methods we use for someone who plays games but not on a Nintendo platform, or to someone with little interest in games themselves. We are brainstorming company-wide on ways to convey the appeal of Nintendo Switch to the people we have not been able to reach with our existing methods.
Dragalia Lost
Q7
As for user demographics, in Japan it is being played not only by Nintendo fans but also by plenty of Cygames fans. In the US, the user base is predominantly Nintendo fans. Our reasoning behind saying that the game has found a certain number of audiences with the consumers who play it continuously is based on comparisons to our past applications that show it has remarkably stable activity. Sales are also relatively steady each day, and the various packs of items sold to aid in making in-game progress likewise stand apart from what we have seen with past applications.
About China
Q8
Nintendo Switch Online
Q9
As for the kind of service this will develop into in the future, Nintendo Switch Online is essentially a digital service, but we are also offering controllers specifically for use with Nintendo Entertainment System – Nintendo Switch Online exclusively to subscribers of the service. We see the need to develop the service beyond being merely digital, in ways play to our strengths as a company that operates an integrated hardware and software business.
Fortnite and cloud gaming :
Q10
Generally, I think having the Nintendo Switch software lineup augmented by titles from publishers who make use of cloud gaming technologies is a very positive thing. And it is really meaningful in terms of expanding our user base, because there are some titles that probably could not be offered on Nintendo Switch any other way.
Smartphone game collaborations :
Q11
The update on Nintendo titles is that development of Mario Kart Tour is currently progressing towards release during this fiscal year, as planned. Based on our past experience, the most important thing is not an application’s launch, nor its initial momentum, but whether consumers are going to continue playing the application. We will release more information about Mario Kart Tour once it is fully prepared to meet that challenge.
Labo
Q12
As for any initiatives to expand the Nintendo Switch user base without relying on our franchise titles, we do have a variety of new ideas besides Nintendo Labo. We will announce these at a later time.
Major titles missing on Switch :
Q13
Future of handhelds :
Q14
Regarding the future of the handheld video game platform business, while it is true that Nintendo Switch is a game system you can carry around, Nintendo 3DS has advantages in terms of size, weight, and price point as a handheld system. The two systems have definitely coexisted, and for now our dedicated video game platform business will proceed with both Nintendo Switch and Nintendo 3DS. I expect we will continue selling Nintendo 3DS as long as there is demand for it.
Nintendo Switch Online 3-month plans :
Q15
Furukawa:
Long-term profitability :
Q16
As for the question of how we can keep profitability trending upward over the long term, given that we are in the entertainment business, that answer will largely depend on whether we release hit products. Even so, there are a few ways we can work towards stabilizing revenues. One of these is the model where we add to revenues through add-on content that is available on and after the release of a major title. And the model where we earn revenues with a service like Nintendo Switch Online, where money is paid continuously at regular intervals. There is also the model where we earn continuous revenues through the operation of smart-device applications as a service. These initiatives will probably still need a lot of time to develop. Although our smart-device business has not yet reached the scale where it can serve as a pillar of revenue, we are steadily laying the groundwork for it to increase the profitability of overall Nintendo business. Looking at things in the long term, I can see these preparations are falling into place.
