Nintendo Co., Ltd. and DeNA Co., Ltd. Business and Capital Alliance Announcement

Mar. 17, 2015
Nintendo Co., Ltd.
DeNA Co., Ltd.
Business and Capital Alliance Announcement

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8	Which party will hold the user database and which party will be responsible for consumer payments? You also mentioned that you would develop a new membership service, which will replace the current Club Nintendo. If DeNA were responsible for the operation of the membership service, I guess it would be possible that the image of the company that actively deals in the "Gacha" type charging system might affect the consumers who play with Nintendo IP. What does Nintendo think about this possibility?
8	Iwata: The two companies will jointly develop the new membership service but Nintendo will be the primary party that operates it, so all the data will be held by Nintendo. But if your first question was regarding the smart device game applications that both companies will jointly develop and operate, because the two companies will jointly operate them, DeNA must be able to access the data in order to execute its business. Needless to say, both companies will discuss and determine which data can be accessible for each purpose and whether or not doing so will meet both companies’ common interests. Accordingly, I believe that we would never allow a situation to occur that could jeopardize Nintendo’s relationship with its consumers. Moriyasu: Just as Mr. Iwata pointed out, we will be operating the new games for smart devices together. And therefore, the data that we accumulate will not be used for a separate business without communicating this to each other. If consumers allow us to utilize the data, we might do so, but the data will not be used without one company informing the other. Iwata: I think I should repeat what Mr. Moriyasu just said so that our consumers will be relieved that it is impossible to use data for any other purposes than the originally intended use unless both companies will have agreed to do so and will have received prior consent from consumers.

Which party will hold the user database and which party will be responsible for consumer payments? You also mentioned that you would develop a new membership service, which will replace the current Club Nintendo. If DeNA were responsible for the operation of the membership service, I guess it would be possible that the image of the company that actively deals in the "Gacha" type charging system might affect the consumers who play with Nintendo IP. What does Nintendo think about this possibility?

Iwata:

The two companies will jointly develop the new membership service but Nintendo will be the primary party that operates it, so all the data will be held by Nintendo. But if your first question was regarding the smart device game applications that both companies will jointly develop and operate, because the two companies will jointly operate them, DeNA must be able to access the data in order to execute its business. Needless to say, both companies will discuss and determine which data can be accessible for each purpose and whether or not doing so will meet both companies’ common interests. Accordingly, I believe that we would never allow a situation to occur that could jeopardize Nintendo’s relationship with its consumers.

Moriyasu:

Just as Mr. Iwata pointed out, we will be operating the new games for smart devices together. And therefore, the data that we accumulate will not be used for a separate business without communicating this to each other. If consumers allow us to utilize the data, we might do so, but the data will not be used without one company informing the other.

Iwata:

I think I should repeat what Mr. Moriyasu just said so that our consumers will be relieved that it is impossible to use data for any other purposes than the originally intended use unless both companies will have agreed to do so and will have received prior consent from consumers.

9	I would like to know a little more about the new membership service. Which specific services will be available? Can some data be used between different devices? How will you include a payment system there?
9	Iwata: The only things we can announce today regarding the new membership service are limited to that it is compatible with multiple devices and that it will form a bridge among these devices. If I can go a bit further, we will construct a system so that we can invite the users who play our game applications on smart devices to our dedicated game systems; something you have done on one device can be utilized on another. We have scheduled this new membership service to start in the fall of this year, and it will have a loyalty program like the existing Club Nintendo. Allow us to stop here, as we will make further detailed announcements on the new membership service when we progress further in its development and are ready to explain it in a more comprehensive way.

I would like to know a little more about the new membership service. Which specific services will be available? Can some data be used between different devices? How will you include a payment system there?

Iwata:

The only things we can announce today regarding the new membership service are limited to that it is compatible with multiple devices and that it will form a bridge among these devices. If I can go a bit further, we will construct a system so that we can invite the users who play our game applications on smart devices to our dedicated game systems; something you have done on one device can be utilized on another. We have scheduled this new membership service to start in the fall of this year, and it will have a loyalty program like the existing Club Nintendo. Allow us to stop here, as we will make further detailed announcements on the new membership service when we progress further in its development and are ready to explain it in a more comprehensive way.

10	What are your sales and profit forecasts for this business? Mr. Iwata mentioned that releasing game content for smart devices would devalue Nintendo’s hardware-software integrated platforms. Did external changes make you change the policy? If not and it was because of an internal change, I must say that the decision was too late. Please elaborate on this change.
10	Iwata: We have nothing to explain regarding sales and profit today. Our basic position is to announce our best-predicted scenario in the financial forecast announcement for the next fiscal year. As to your question, "Why did you announce a policy which is different from what you used to say?", one thing is that we have finally found a clear way to achieve a win-win relationship both for the dedicated video game and smart device businesses by deploying Nintendo IP raised in dedicated video game systems to smart devices. Another thing is collaborating with a powerful partner, DeNA. Instead of one company having to do everything, this partnership will enable us to not assign an excessive number of development staff to areas where weaknesses exist, and as a result will help us avoid disturbances to our software development for dedicated video game systems. Or, I should rather say that we have found an answer to creating an advantageous situation for both sides by letting more people know about Nintendo IP and bridging the gap between these two platforms. You mentioned that what I explained today sounded different from what we have said in the past. Please understand that I had been hoping to come up with this sort of solution and that I was finally able to talk about the whole picture today, because various prospects we had been considering and working on have come together as we had hoped, so I personally feel very comfortable today. As for your criticism that the decision is late, I think that whether it is late or not will be decided by what we produce in the coming years, and it could rather be described as the best timing. My personal view is that the time is ripe as many factors like various encounters with people, the ways our internal discussions have progressed and the ideas we have generated through that process occurred simultaneously. We will do our best to prove that our decision was made at the right time.

What are your sales and profit forecasts for this business? Mr. Iwata mentioned that releasing game content for smart devices would devalue Nintendo’s hardware-software integrated platforms. Did external changes make you change the policy? If not and it was because of an internal change, I must say that the decision was too late. Please elaborate on this change.

Iwata:

We have nothing to explain regarding sales and profit today. Our basic position is to announce our best-predicted scenario in the financial forecast announcement for the next fiscal year.

As to your question, "Why did you announce a policy which is different from what you used to say?", one thing is that we have finally found a clear way to achieve a win-win relationship both for the dedicated video game and smart device businesses by deploying Nintendo IP raised in dedicated video game systems to smart devices. Another thing is collaborating with a powerful partner, DeNA. Instead of one company having to do everything, this partnership will enable us to not assign an excessive number of development staff to areas where weaknesses exist, and as a result will help us avoid disturbances to our software development for dedicated video game systems. Or, I should rather say that we have found an answer to creating an advantageous situation for both sides by letting more people know about Nintendo IP and bridging the gap between these two platforms. You mentioned that what I explained today sounded different from what we have said in the past. Please understand that I had been hoping to come up with this sort of solution and that I was finally able to talk about the whole picture today, because various prospects we had been considering and working on have come together as we had hoped, so I personally feel very comfortable today.

As for your criticism that the decision is late, I think that whether it is late or not will be decided by what we produce in the coming years, and it could rather be described as the best timing. My personal view is that the time is ripe as many factors like various encounters with people, the ways our internal discussions have progressed and the ideas we have generated through that process occurred simultaneously. We will do our best to prove that our decision was made at the right time.

Presentation by the President | Q & A

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