Nintendo president Satoru Iwata has told investors that the company is keeping a close eye on the advancements in cloud gaming. Iwata said they aren’t prepared to embrace it at this precise moment in time due to the responsiveness and the unavoidable network latency. Here’s what Satoru Iwata told investors.
“Of course, we constantly pay attention to the advances and changes in cloud gaming technology and Internet infrastructure. On the other hand, I don’t think that our games, particularly the types that have strict requirements in terms of real-time responsiveness, can offer high-quality services using cloud gaming technology because of unavoidable network latency.”
“We will of course continue to see how this technology develops, but in order to decide whether cloud gaming is something that we should be interested in, we will need to closely follow the changes in technology and also the business environment. However, at this point in time, I do not think that acquiring a cloud gaming company will in any way improve our performance, so we are not moving in that direction.”
Nintendo president Satoru Iwata has revealed that the company is looking beyond digital distribution and is actively thinking about free-to-play games. Iwata says that Nintendo is constantly thinking about current and new business models to bring in new streams of revenue.
Q: You talked about Nintendo’s digital business in the presentation. I remember you said that in addition to the packaged software business, the digital business could be a core business for Nintendo. Could you please give an indication as to how much you expect to generate in digital sales this fiscal year and the next? Also, apart from replacing packaged distribution with digital distribution, I understand that you are developing network-based products such as “Wii Street U powered by Google.” Do you expect to be able to make hit network-based products and create a buzz in society?
A: Also, as you pointed out, we think that digital distribution of packaged software is only the first step in expanding our digital business. We will not simply change our existing packaged software distribution channel. Rather, we might have many other types of business models in addition to packaged software. For example, we might see more games that are similar to free-to-play games, games that cost much less or games that require a monthly subscription fee. Digitalization allows for greater flexibility, whereby having more ways to make payments, both software developers and consumers have more options. And Nintendo 3DS and Wii U have flexible systems to handle such trends, so it is now a question of putting these ideas into action. I can definitely say that Nintendo will make new offers that go well beyond simply replacing packaged software with digital software.
Nintendo has revealed that their games for the Wii U console were delayed, in part, as a decision to create ‘delicately crafted’ titles with precise finishing touches. In a question and answer session over the financial results briefing, Satoru Iwata claimed that the decision was made in response to the influx of low-cost titles and intended to give games developers much-needed time to work on a second and third coat of polish.
Iwata said: ”We originally planned to release a few first-party titles for Wii U during the first half of this year, but no big titles are scheduled for release before Pikmin 3 in July because we decided to take time to add the final touches to ensure that consumers fully feel that they are valuable titles. The brand of a franchise would be completely degraded without customer satisfaction. This is why we delayed the release schedule of such games.”
Iwata continued to say that certain Wii U launch titles required more development resources than originally expected and therefore lengthened the delay: ”In short, the development teams of Pikmin 3 and other future games were understaffed during that period.”
He added: “We do not simply have one easily identifiable bottleneck in software development. These days it is becoming increasingly challenging to determine the minimum development resources required for customer satisfaction. [...] A delicately crafted game will never fail to appeal to consumers.”
Nintendo president Satoru Iwata has told investors that he is aware that a large number of developers and consumers believe that the Wii U is significantly underpowered and says that this is a misunderstanding. Iwata says that Nintendo really need to remedy this idea. He also told investors that a number of third-party developers aren’t supporting the console, but he believes that once third-party developers start producing hit franchises on the Wii U then other developers will think again about developing for the platform. Iwata understands that this won’t happen overnight, but Nintendo is working on revitalising Wii U after the summer.
Nintendo president Satoru Iwata has revealed that 80 percent of the 3.45 million Wii U consoles worldwide are now connected to the internet. Iwata says this is the highest amount achieved for a Nintendo console and he believes that as the install base grows, so will the amount of people who are connecting their consoles to the internet.
“This is a higher number than the previous hardware systems we released. As Wii U is a game console you can enjoy most with an Internet connection, we will continue to inform our consumers about the advantages of using it online and further increase the net-connection ratio.”
Satoru Iwata also revealed just how many Nintendo 3DS console are connected to the internet. Iwata says that Japan has the highest connected with 87 percent of users connected online. The United States isn’t too far behind with 83 percent, but the ratios are rising in both regions, he said. However, Europe’s net-connected ratio stands at 57 percent, and though it is higher than before, it “leaves much to be improved.”
During a recent financial results briefing, Nintendo President Satoru Iwata said his company feels “deeply responsible” for not trying hard enough to explain the Wii U to consumers. Unfortunately, for Nintendo, there are still some people who think the Wii U GamePad is a peripheral for the Wii console, and some think the Wii U is merely a Wii with a tablet controller. Iwata says it’s been a “grand challenge” for Nintendo in terms of trying to communicate the product value of Wii U to consumers.
Regarding Wii U, the release intervals of first-party key titles have been so much longer than we expected at the Corporate Management Policy Briefing in January that we have not successfully maintained the momentum of the platform. In addition, we have not been able to solidly communicate the product value of Wii U to our consumers yet, which has been a grand challenge for us.
Some have the misunderstanding that Wii U is just Wii with a pad for games, and others even consider Wii U GamePad as a peripheral device connectable to Wii. We feel deeply responsible for not having tried hard enough to have consumers understand the product.
Wii U might still have no such captivating game title as “Wii Sports” for Wii, with which people immediately comprehended its product value, but it surely has a lot of factors appreciated by users. We would like to take time to work thoroughly for its penetration, by making various efforts to have many people understand its product value as well as enriching the software lineup.
-Nintendo President Satoru Iwata
During Nintendo’s financial results briefing, company president Satoru Iwata said he’s heard that there are more unnannounced third-party games coming to Nintendo 3DS this year. Some of the confirmed third-party games hitting the handheld device this year are Disney Infinity, Disney Planes and Skylanders: Swap Force.
Recently, third-party software developers overseas have had fewer of their best development studios develop software for handheld devices. However, for this year, the release of several key titles has already been announced, and I have also heard there are more unannounced titles to come.
Also, as I mentioned on another occasion, we plan to more actively support the Japanese software developers in distributing their key titles overseas.
… I’ve also heard that our third parties are planning to launch other software titles that they have not announced yet. With these titles in the lineup, I think that, although much later than in Japan, the overseas markets are finally ready for Nintendo 3DS to get on an ideal sales track.
-Nintendo President Satoru Iwata
During its financial results briefing, Nintendo announced that unlike previous years, it will not host a “large-scale presentation” at this year’s Electronic Entertainment Expo (E3). Company president Satoru Iwata says Nintendo is instead planning several “smaller events” for the expo that will focus on software for the U.S. market. Among them are closed hands-on events aimed at American distributors and the Western media.
In the past we invited reporters, investors and analysts, industry partners, such as software publishers, and distributors who attended E3 to our large-scale presentations. We also used them as a communication tool in which we broadcast our presentations on the Internet to reach out to video game fans around the globe. I believe that many are expecting us to host a similar event this year.
First, we decided not to host a large-scale presentation targeted at everyone in the international audience where we announce new information as we did in the past.
Instead, at the E3 show this year, we are planning to host a few smaller events that are specifically focused on our software lineup for the U.S. market. There will be one closed event for American distributors, and we will hold another closed hands-on experience event, for mainly the Western gaming media. Also, I did not speak at last year’s presentation, and I am not planning to speak at these events at the E3 show this year either. Apart from these exclusive events for visitors, we are continuing to investigate ways to deliver information about our games directly to our home audience around the time of E3. We will share more information about them once they have officially been decided.
During the E3 period, we will utilize our direct communication tools, such as Nintendo Direct, to deliver information to our Japanese audience, including those who are at this financial briefing, mainly focusing on the software that we are going to launch in Japan, and we will take the same approach outside Japan for the overseas fans as well.
-Nintendo President Satoru Iwata
From the get go, it appears that Bloomberg’s predictions were not as bad as originally expected, but that’s not to say Nintendo didn’t suffer operating losses. From Nintendo’s financial results, there is a net profit of 7,099 million yen – approximately $71 million. However, Nintendo’s operating income brought a substantial loss of 36,410 million yen, roughly equal to $366 million, which almost reaches the same level as seen in the fiscal year of 2011/12.
The overarching problem, or so it appears from the financial report, is sales for the Wii U. Unfortunately, the console failed to hit the 4 million hardware sales prediction mark from last year, only shifting 3.45 million units. Over this financial year, Nintendo has estimated that it will sell an approximate 9 million units worldwide – a significantly higher mark than last year’s predictions.
The Nintendo 3DS is still the forerunner in the company, with sales of 13.95 units sold worldwide, with over half of those from XL versions. This financial year sees Nintendo’s estimates climbing up to a projected 18 million – virtually double of the Wii U’s hardware prediction – with software estimates residing at 80 million. Sales for the DS software have also declined with an estimated 10 million in software sales, but nothing for hardware.
So it seems that for this financial year, Nintendo’s Satoru Iwata intends to stick to his previous personal commitment of attaining the 100 billion yen profit, even now as he prepares to take on an extra role as CEO for Nintendo of America, as well as retain his current position.
After yesterday’s announcement that Nintendo’s profits had suffered sufficient losses last financial year, Satoru Iwata has taken a big step by revealing in an official statement he will take on an extra role at Nintendo of America. Iwata will lace up his shoes as the CEO of Nintendo America after Tatsumi Kimishima – the current CEO – moves on to become the global managing director of Nintendo, based in its Kyoto headquarters.
This is big news as Kimishima, who previously came to Nintendo in 2000, will assume the role in both Corporate Analysis and Administration and the General Affairs divisions – meaning that the current bosses Yoshihiro Mori and Masaharu Matsumoto will step down this summer for retirement.
The big shift is set to create a more streamlined approach when it comes to matters of business and, of course, to fortify Nintendo’s global unified strategy within such a competitive market. With Satoru Iwata acting as NoA’s CEO, Nintendo’s COO Reggie-Fils Aime will now report directly to Iwata.