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Satoru Iwata Hopes QOL Will Contribute To Nintendo-Like Profits In Future

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.

38 thoughts on “Satoru Iwata Hopes QOL Will Contribute To Nintendo-Like Profits In Future”

  1. Nintendo Elite Commander Quadraxis

    -Lord Iwata: 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.-

    New Facility, Quad Divisions and Directly = Quadraxis 2.0?…

    I’ll finally return!

      1. Nintendo Elite Commander Quadraxis

        Can you all stop saying “Metroid Prime 4”?…

        The Prime story is over, deal with it…

        Another “PRIME LIKE” game makes more sense but not a sequel…

  2. A year later and still nobody has a clue about wtf the this thing is supposed to be….

    So obvious to see that all he is doing is stalling in a desperate attempt to keep his position. There is no QoL plan whatsoever.

  3. I would like to see this succeed. A means of getting healthy that is a fun as a standard Nintendo game is a pleasant though. Not to mention Nintendo branching out would be good for them as a company as they could probably pull in more financial support for their games and be a lil more.. liberal in their spending for games. Maybe buy out promising companies rather than leaving them to become husks of their former gory like Rare.

    1. “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.”

      This comment above made by Satora Iwata kind of worries me a little. What he clearly states is that the company is indeed in a state of change. That half of their revenue will come from this new QOL project in the near future. That is very unsettling to me. Yes, I would like to see Nintendo succeed no matter what they are doing, but this type of change they are talking about is scary for a Nintendo fan. If QOL is extremely successful, and the game division continues to drop, well… a business will go where the money is..

    2. ShadyKnights, this may not be a good thing for Nintendo’s gaming division. Iwata states above that the QOL and the gaming department are two different divisions. Ones success will not neccesarily grow the other. More like replace it..

      1. I am aware of what he said and the potential ills it could have for the gaming divisions, however just as Sony and Microsoft put money from their other divisions via advertising and wider presence to say the least, into their gaming divisions, should Nintendo be successful in other areas, they too could do the same.

        1. But like I said below, Sony and Microsoft already had those other divisions before they started their gaming divisions. Thats completely different from what Nintendo is doing. They are branching out to other divisions because they are trying to increase their revenue. Their gaming division is shrinking, and these type of sales that the Wii U are getting obviously cannot support the company..

          1. I believe you may be taking the “half its profits” too much at face value. We have to remember Japanese is a strongly contextual language while English is literal. More likely he was ways one cannot expect a new company to do half as well as and older one as soon as it starts. That’s a fair thing to tell investors about as they should feel comfortable investing money in this new QoL idea.

            Gamers should not worry quite so much unless they are also interested in trying out the QoL products as well. Using Sony and Microsoft as the example, I meant to look at how both entered the gaming market, their impact, and the time spent in said markets. Microsoft got in with little hands on experience with gaming and has failed to make a profit off the console since the first XBox. Their core business is fine, but as their videogame industry is doing poorly, it is highly likely the core will cut the fat and remove the gaming industry as it hurts the core. Sony got into the industry utilizing experience gained from their dealings with Nintendo and Sega and utilizing their brand to increase both visibility and hype, they killed Sega’s Dreamcast when the PS2 was genuinely not much better over all. Since then Sony’s marketing efforts on their games have been used to try to also sell their products as it worked with the PS2, however the effectiveness of said efforts has also resulted in Sony closing down what used to be its core and restructuring itself around the Playstation brand.

            Similarities? Lack of profits generally make closing something down a viable means of survival. Nintendo generally makes profits over all, so worry about them closing the gaming division is a little unfounded. Those other companies also have visiblity from their size, allowing them a broader means of advertising their gaming division. Let’s face the cold hard truth of the matter, Nintendo has money, lots of it. They don’t have Microsoft money or Sony visibility. Everyone says they should advertise more, but logistically speaking, if they did, Sony and Microsift would advertise harder and they have the means to drown out Nintendo’s attempts and gaming “journalist” media would be more than happy to spin their adverts as them flailing haphazardly or diminish their efforts via the ever popular negative talk that they’ve been doing since the Wii U’s launch.

            Nintendo being successful in other areas along with their games increase both of what they want. profits and visibility. Profits, cause a company likes it, and visibility to be seen beyond the current trend of gaming media. Beyond the flaws pointed out for the XBOne, it’s demographic primarily speaks of their good traits and why they love them. Sony, despite having not really that many games of interest to gamers in general, has visibility and good PR that ignore their short comings, instead focusing on consoles sold rather than quality of games on those consoles.

            It’s very likely Nintendo will never be popular and I’m honestly fine with that. They don’t need popularity, they need stability. They don’t need a console with so much waste that its games are anemic due to the console trying to do fifty things at once while they play games. Off-screen play is about the most sensible thing to gaming as it promotes gamers to keep gaming yet everyone demands the gamepad do “more” for “reasons”.

            As a gamer I only worry about games and my enjoyment of the console I play on. The Wii U has proven satisfactory on both ends to me so I don’t complain so much. The company I prefer gaming with more opening other business would only worry me if this were happening while Nintendo was loosing money. However they more seriously announced this after the Wii U became more profitable and more details are underway the more profitable the console becomes which is actually a good sign in how much they value their gaming sector as they didn’t potentially damage game sales with talk about doing something new. Currently we know new games are on the way, that they are working on broadening their company’s horizons, and we can assume if they’re telling us about this now, they’ve been working on this since the Wii U dropped at least.

        1. Yea, but Microsoft and Sony didn’t jump FROM gaming into those other ventures. They already had the other ventures, and went into gaming. This is different. Nintendo is shying away from gaming, and going into the healthcare market, which Iwata claimed above will make up half of Nintendo’s revenue…

  4. I thinks this move is what going to finally sink nintendo. I want them to be a fucking succes. If this is a success and the keep fucking with up gaming. I fear that they will become a health care insurance agency and drop gaming all together. Like that hotel and those playing cards.

    1. I don’t think enough outside of Japan are going to care about this QOL nonsense. I’m big on being healthy too, but even I have literally zero interest in this.

      Once again, Nintendo is relying on their past success to be their only game plan. I guess cause they assume Wii Fit was so successful, that this will be also.

      Always stuck in the past.

  5. Question does anybody know the trade in value for a ps4 and vita at gamestop?

    Gonna sell em both to buy more nes games and if a game worth owning a ps4 ever happens to come out ill just buy a new one.

  6. I bet you in 2017 is when they release their next home console. I have a feeling they want their QOL and their gaming department to be in sync so they can start turning the company around in a couple years.

  7. Iwata drives me fucking insane with how vague he is about everything. I don’t know how investors can constantly put up with this.

    1. I think theyre legitimately stupid, honestly. If you cant tell iwata’s absolutely clueless about what to do and why, i’m aware of a no more appropriate term than that.

  8. I just don’t think Iwata is focusing enough on the gaming market. He’s devoting too much money towards his new projects that could be used on R&D for future 1st party games, or third parties. I guarantee you if Nintendo had approached Rockstar and said we would pay X amount of dollars for you guys to put GTA 5 on the Wii U, Rockstar would have done it. Same with alot of other major 3rd party titles. Nintendo was expecting 3rd parties to come without an incentive. Hell, Microsoft and Sony even gives incentive to third parties.

    Also Nintendo should have already made Galaxy 3. That franchise carries alot of excitement. A Pokemon MMO should have already been made. Metroid, and F-Zero should all be out. Give fans what they want. Nintendo should have come out swinging with everything right out of the gate. Smash and Mario Kart should have been launch titles. Nintendo played it too safe. They are not being nearly as aggresive as they should be. They are not even being half as aggressive as they were with the original Wii.

    If Nintendo did what I mentioned above, there is no doubt that the Wii U would be in direct competition with the Ps4.

    1. Which is nice, but Nintendo does not need to directly compete with Playstation. None of these companies need to directly compete with each other and gamers should wrap their heads around that fact. I gamed back in the Nintendo vs Sega days and the reality of it all was the competitive ads were advertisement for both. Want your cool Sonic? Need Sega! But you don’t want to give up the awesome Mario do you? Nah get both! Getting the maximum out of being a gamer meant owning both consoles as Nintendo dealt with more levity while Sega was more focused on cool imagery. Hell that or just go over to your friend’s place that had the console you didn’t have and talk with them about what games you have and how fun they are while enjoying their games. Back then talking about games was fun due to how different many of the games “had” to be to compensate for how different the consoles were. Currently though? You have two big consoles touting they do different things when their GAMES (the things a gamer should concern themselves with) and controllers are essentially the same, and one that promises and delivers fun and unique methods of gaming.

      This is a very sustainable place for Nintendo to be in, however, current gamers are so obsessed with how a game looks, that they don’t care how much less freedom games actually give them on the two same consoles and notably higher price points. Hell games don’t even matter to them as Sony and Microsoft’s direct offerings are pathetic at best while their third party offerings are broken at worst. Nintendo’s offerings have been and are, consistently high, yet because the games are sometimes simple looking, current “gamers” feel embarrassed to be playing these games or seen doing so.

      Not really Nintendo’s fault their old fans drank the Flavor-Aid of “What games are for adults” and newer gamers were immediately conditioned to assume only games that look “realistic” are worth play or are any good. Even less their fault that current gamers keep buying these games after three consecutive years of third party games getting leaps and bounds worse after their initial spiral into mediocrity a couple of years in last gen once Mass Effect’s game length and price point were ignored because of how well it told a story and Uncharted’s movie-like experience became standard most games attempted to achieve ever since.

      1. I agree with some of what you said, but Nintendo is a business, and they need to sell consoles. You say they are sustainable at their current sales pace, and I disagree. And every single developer at Nintendo would disagree with you as well. I agree they do not have to be in direct competition with the Ps4, as long as they have a nice little market of their own. But 9.5 million consoles in 27 months is very bad, and will not sustain the company. Honestly it’s the 3ds that has been sustaining Nintendo lately, and without it’s success Nintendo would have without a doubt had their fourth consecutive loss.

        I think Nintendo makes the best games around. And I also think they could possibly, likely even, have their best year yet with Wii U sales in 2015. I think Xenoblade and Zelda will be the best games of the entire generation, nevermind goty. But to ignore all their mistakes and pretend like everything is fine is bad for business. It’s imperative they do not repeat these same mistakes with their next console. We as fans are obligated to do our part to make sure that doesn’t happen..

        1. Which is the entire point of the concept for their next console the “Fusion”, the purpose of which I’m confident is to make owning both their hand held and home console optimal for gamers as they would work with one another likely how the Vita was supposed to do so with the PS3/4 but failed to achieve. And really sustainability means they have to be able to keep the company afloat by either breaking even or making a profit. They are making a profit with the Wii Us which is the important thing of note here. Yes more console sales would be and certainly are what they want, but to ignore that the Wii U is making money and therefor successful, even if minor so, is misunderstanding the meaning behind the interest in branching out.

          They know how to run a business. That’s just fact. Even with them selling a little over 9 mil consoles in a lil over 2 years, it took them about a year if not a little longer to become profitable. How long has it taken Sony to do so with their 3 year flop of a PS3? When has a Microsoft console ever been profitable? Third party games need to sell several million to turn a profit, Nintendo can do it with several hundred thousand and tend to comfortably achieve that. They know what they can achieve and tend to achieve it. Their conversion to different things are generally clunky yes, but once the transition is complete Sony and Microsoft tend to charge headlong into Nintendos freshly tread waters in hopes of sucking in all the newly excited fans with their far more vast visibility they create via money their larger companies afford them to move faster more easily, and/or with hype spin gaming media tends to give them eagerly.

          You cannot say it was okay for Sony and Microsoft to move into gaming and not okay for Nintendo to expand out when Nintendo is at least consistently good in what it does. That’s hypocritical. Are they the most popular gaming company? No. Are their games good? Very. Are they niche? Especially these days. However with it’s smaller niche group, and even with people comparing sales of consoles as if that matters to a company making steady money on their slower, but steady sales (it’s usually gaming media and arm chair analysts who talk about console sales not so much Nintendo themselves as they talk about their GAMES first and console sales like maybe twice a year if that much), everyone freely admits that they make great products.

          They have shown no interest in leaving the industry, only in making more games faster. They likely suspect their console sales will never reach the range of Sony’s or Microsoft’s and they’re not willing to compromise their feelings on the quality of their games to do so. So they are working to expand, to infuse their gaming division with more profits so they can keep doing what they like doing without compromise to the quality of their games suffering from the trend homogenization and over saturation that’s going on with their “competition”. I feel it’s very healthy and important for a company to recognize what they can achieve, what they want to, how to get what they want to achieve, and to go after it. I wish them all the luck in their expansion and hope their games only get better for it.

  9. lets hope after this qol flops iwata will be fired!!! they will get someone with some guts. so they can change the outlook and future of the co. going after people who have no intersest in video games doesn’t work. wii proved it!!

    1. Guts? Hell, the man was behind the design of the original Wii. He built an entire gaming console based on an unproven motion control gimmick. He designed the Wii U, a console that has a friggen touchscreen tablet INSIDE the controller!

      If thats not guts i’m not sure what qualifies! lmaoo I agree he has made his share of mistakes, and it’s becoming increasingly harder to defend him. But he does not lack guts that for damn sure…

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