Furthermore, Nintendo is periodically researching the transitions of the gaming populations.
This is a different perspective from the sales transitions of hardware or software, so I would like to introduce the latest data on this occasion.

This graph shows the transitions of the gaming population in the U.S., which is the largest market and the market in which smartphones have shown the fastest rate of penetration in the world.
The blue part in this graph stands for people who have played games on dedicated home gaming systems, not only Nintendo platforms but also others’, in the past year. We define these users as active users. The yellow part represents consumers who have played with video game systems in the past, but have not played with them in the past year, which we define as sleep users. The pink part indicates the consumers who have not played with video game systems at all, which we define as non-users.

I have just received the most recent survey data. The very high active-user ratio of 63% has remained stable even during the most recent summer. However, a number of you must have anticipated that the ratio of the number of consumers enjoying the Nintendo DS and the Wii has decreased. And, when we color-code the number of people who are enjoying the Nintendo DS and the Wii,

the graph will look like this.

Contrary to the impression you might get from the decreased sales of the Wii and the Nintendo DS, the number of consumers who are playing with these game systems has been maintained. On the other hand, it reminds us that we must have great potential if we can announce the release of good software.

For the current fiscal year, the sales pace of Nintendo 3DS after its launch was not in line with our original scenario. In order to make the course correction and place it back on the originally expected sales track, the company was forced to make the significant price drop.  On top of that, the company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.

I understand that your main concern is whether or not Nintendo will be able to get back to a situation where it can generate steady profits from the next fiscal year and beyond.

As for our Nintendo 3DS, the hardware markdown has resulted in a huge loss in this fiscal year. However, as we are going ahead with gradual cost-cutting efforts, from a profit standpoint, improvements are expected to be made in the next fiscal year.

In the current fiscal year, there have been some big intervals between the launches of expected titles. We are now making preparations to ensure that we will be able to provide a variety of consumers with a broad range of software options to choose from so that we can maintain the momentum for the platform.

I understand that a number of you are already aware of our solid software lineup starting from this holiday season. We are also making preparations in collaboration with third-party developers so that a continuous stream of expected titles shall be launched in the next fiscal year as well.

At the Nintendo 3DS Conference (held in Japan) in September and during the Nintendo Direct broadcast, we discussed some of the titles to be launched just after the holiday season. We are also preparing for additional titles.
At the Nintendo 3DS Conference, when it came to Nintendo’s first-party titles, we intentionally focused upon franchise titles partially because our main aim was to deliver the message to avid game fans.

Aiming for the next fiscal year, we are also working on new genres of software that may attract people who are not particularly interested in video games. In order to further expand the definition of video games and to create new software fields under our gaming population expansion strategy, we are planning to launch several new software titles in the next fiscal year.
Some of you may be thinking that, with the expansion of smartphones today, proposing new genres, such as the company did with “Brain Training” and “Wii Fit,” might be difficult.  However, the company will aim to develop and launch products that can provide meaningful surprises to the public by taking advantage of the company’s position of being able to make new proposals that integrate both hardware and software, and of its ability to develop products that can be accepted by a wide variety of consumers, irrespective of age, gender or past gaming experience.

In addition, it is important to create software that can sell for a long period of time, which is one of the characteristics of software for Nintendo platforms. Last year at this opportunity, I discussed the existence of software which had been selling for a long time, and those titles actually became the pillars of the year-end sales season last year.
Once again, the existence of such titles is going to be important for the upcoming year-end sales season. For the Nintendo 3DS, among the software titles which we have already launched or the ones which are to hit the store shelves soon, such titles as “nintendogs+cats,” “Super Mario 3D Land” and “Mario Kart 7” hold strong potential to become the titles that will sell for as long as Nintendo 3DS is on the market. For me to better explain what I’m talking about, I would like to show you how the corresponding Nintendo DS titles have been selling.