Iwata:

The Nintendo brand encompasses more than 30-years’ worth of accumulated trust that parents can feel safe letting their children play with our products - an asset that is very precious to Nintendo. We want to maintain this consumer trust and would not want to damage it in any way.

I just mentioned in effect that we might need to tweak the existing business models for smart devices. In fact, when people say the things like, "this is the way you can generate the largest possible revenue on smart devices," they are just talking about the so-called common knowledge that can be applied today. Mr. Moriyasu mentioned that the world of smart devices is rapidly changing too. It will probably change even more going forward, and there is no guarantee that effective business models of today will continue working in the future. Looking at the transitions from mobile gaming to social games and from social games to smart device game applications, it looks as though the changes that took place in the world of dedicated game systems in 10 years have quickly taken place just within two years in that market.

When the trends change, the business models in turn also must change rapidly. And knowing that there will always be change, the two companies will carry out business together by cherishing the idea that we will offer something our consumers will thoroughly understand and accept, and with which many people, including children, feel safe to play.

As you pointed out in your question, it is true that we do not have established channels to market our hardware in new markets, the price points are considered too high there and that offering Nintendo IP software via smart devices can resolve one of these issues.

However, such ability alone will not resolve all of the issues, and for us to expand our software in new markets, we will probably need other tweaks in addition to smart device utilization.

Because this (Nintendo’s plans for new markets) is not related to today’s alliance announcement, I will not go any further into it, but the global spread of smart devices has great significance for Nintendo as we will have the opportunity to deliver Nintendo IP to an even broader range of consumers.

On your question regarding the specific countries in which we will release our game applications, as I just answered in the previous question, we will make the announcements when we have decided the formats for each country.

Iwata:

Regarding our business expansion on smart devices, DeNA and Nintendo agreed that both companies should deeply consider our plans for the mid-to-long run. In other words, this is not a business alliance just on paper. We concluded that this alliance was worthy of also establishing a capital alliance so that each company would be firmly interested in the other’s business operations, and so that both companies would prioritize various issues in our daily business and closely communicate to make decisions on a variety of strategic options. It was not that either of us made this proposal to the other. It was rather a natural progression of our negotiations, and both of us started to discuss that we would need to establish a fairly strong relationship to reach a certain point and we would need to form an alliance worthy of that kind of a relationship. As a result, we are here today announcing this alliance.

About the reason why I announced "NX," which is the codename for Nintendo’s dedicated game system with a brand-new concept, it is true that it has no direct relationship with our alliance announcement today. I announced it because I wanted to convey my message that Nintendo is even more passionate about and highly motivated to continue its dedicated game system business. As I mentioned today, we were able to overcome the issues concerning our business expansion on smart devices and have reached a conclusion about Nintendo’s approach and the utilization of smart devices so that we can encourage a great number of people to become acquainted with Nintendo IP. For these consumers, we would like to provide the more premium gameplay experiences on our dedicated game platforms so that they understand the overwhelming appeal of the detailed game worlds so much so that they become immersed in these worlds and even core game players can play to their heart’s content. Nintendo will firmly continue its core business. The biggest reason (why I mentioned "NX" today) was that I wanted to eliminate such misunderstandings as we made the smart device announcement today because Nintendo is pessimistic about the future for the dedicated game system business.

Iwata:

You are absolutely correct. As I illustrated in one of my presentation slides today, we will flexibly choose the most appropriate means by taking into consideration the characteristics of the Nintendo IP to be used for each smart device application, and we will try to maximize the number of people who are exposed to Nintendo IP. As a result, we will aim to expand the gaming population. We will make use of smart devices, jointly develop the new membership service and release the new game platform, all for this objective. All of these activities are connected with one another. In other words, we aim to reach an increasing number of people with Nintendo IP. We aim to make it so that they will become not only familiar with but also fully satisfied with our IP. If we can successfully satisfy them and they become fans of our IP, we should be able to expand the number of people who want to continue playing Nintendo games forever. We will try to bring this to fruition. Nintendo has recently been announcing that it is aiming to "redefine entertainment." We are now saying that anything which "improves people’s QOL in enjoyable ways" is a form of entertainment. As such, we try not to narrowly define "games" because we are actually trying to define games far beyond what people conventionally consider a video game. You may want to recall how we made training your brains a game in the era of Nintendo DS and how shaking a remote to play sport on Wii became a game. We are very eager to continue inventing such new entertainment.