Nintendo has published its investors question and answer session in English following the company’s financial briefing last week. President and CEO Satoru Iwata has addressed a number of concerns from investors, including the status of its upcoming health-related business platform: Quality of Life. Though not much is currently known about the QOL model, Iwata has mentioned that it will initially focus on sleep and fatigue sensory functions, breaking away from the core video game format.
In the Q&A session with investors, the Nintendo president outlined the current divisions and departments within the company. As such, Iwata explained that the QOL Business Development Department was set up in the hopes to retain a linear structure for the future platform. Additionally, he shares details on QOL’s profits and that, ideally, it should begin to contribute to the company’s wider profits by the end of fiscal year March 2017, though will continually try to reach “Nintendo-like” profits in the future.
The QOL (Quality of Life) project, however, is slightly different. As we had to create a new project and new business model, we formed an independent team called the QOL Business Development Department. In other words, we created a permanent project team in the form of a new department. People assembled from four divisions to create this department and it reports directly to me. I think that is all I can share with you about the development structure at this moment.
It is natural that we would like to earn an incremental profit from each new business we start. As for the QOL business, we expect it to contribute to the company’s profits in some way in the fiscal year ending March 2017. However, 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. This kind of change requires several years.
Our goal of the fiscal year ending March 2017 will be to make the video game business robust. […] From this perspective, 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.
As the investors’ attention is duly turned to the prospect of Nintendo’s Quality of Life project, Satoru Iwata reiterates why the company chose health as its first idea. He explains at length that when people try to stick to a specific goal, they can be veered off course without feedback or rewards. As such, Nintendo intend to address these issues during the first project. We’ve still yet to hear a formal announcement of what Quality of Life is or will be, but for now here’s what Iwata said:
For your information, the primary reason why we chose “health” as our first QOL project is due to the fact that a large number of people are interested in their health. Also, while people in general understand what we should do to improve our health, it is hard for many of us to continue these good practices. As the Japanese expression goes, “Most people tend to quit after three days.” Many of us are concerned with not being able to continue something even though we recognize its importance for our health. There are several reasons for this such as something cannot be continued when it is hard to do in the first place.
Another is that good things cannot be continued if you do not receive any feedback or rewards. Yet other things cannot be continued because we cannot find the motivation or the connection that will encourage us to continue it to the next level. There are many different reasons, but for most of them, video games can provide a solution. Inside Nintendo, people have the know-how that could contribute to society. This know-how and mastery would, however, mean nothing as long as they have the mindset that it is not part of their job. On the other hand, if they recognize that it is something they could do, Nintendo’s output could dramatically change. At the same time, if an external company has new and interesting ideas but do not know how to use them, Nintendo could be the company for them to approach.