Financial Results Briefing for Fiscal Year Ended March 2016

Financial Results Briefing
for Fiscal Year Ended March 2016

Outline | Presentation by the President | Q & A

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1	For the fiscal year ending March 2017, projected sales of Wii U hardware is set quite low, due in part to the timing of the launch of NX (development code name for the new-concept dedicated video game system currently under development). During this planning stage, what was the thinking about the effect on the Nintendo 3DS system?
1	Tatsumi Kimishima (President): By setting the projected sales of Wii U hardware for the fiscal year to 800,000 units, we do not see that there would be any negative effect on the Nintendo 3DS business. We have major titles for Nintendo 3DS for the fiscal year ending March 2017, as I mentioned in the presentation, and there is a solid lineup of titles. That should greatly contribute to the sale of both the hardware and the software. The positive aspect of lowering the projected sales of Wii U hardware to 800,000 units is that it allows us to focus on the Nintendo 3DS system.

For the fiscal year ending March 2017, projected sales of Wii U hardware is set quite low, due in part to the timing of the launch of NX (development code name for the new-concept dedicated video game system currently under development). During this planning stage, what was the thinking about the effect on the Nintendo 3DS system?

Tatsumi Kimishima (President):

By setting the projected sales of Wii U hardware for the fiscal year to 800,000 units, we do not see that there would be any negative effect on the Nintendo 3DS business. We have major titles for Nintendo 3DS for the fiscal year ending March 2017, as I mentioned in the presentation, and there is a solid lineup of titles. That should greatly contribute to the sale of both the hardware and the software. The positive aspect of lowering the projected sales of Wii U hardware to 800,000 units is that it allows us to focus on the Nintendo 3DS system.

2	I would like to ask about game design for smart device applications. Is Animal Crossing a title that places emphasis on the synergy with dedicated video game systems? Is the game design of Fire Emblem going to be aimed at contributing to earnings? I would like you to explain the objectives of the two titles recently introduced. I would also like you to tell us, to the extent possible, what aspects you would like to reinforce with the remaining two titles to be released before March 2017.
2	Kimishima: We chose Animal Crossing and Fire Emblem as titles to follow Miitomo from the viewpoint of increasing the diverse types of consumers interested in Nintendo, and widening opportunities for game play. The Animal Crossing series has been played by a wide range of consumers including children and women. I think there is a good chance that those consumers would enjoy this. As for Fire Emblem, it is not so much the width of the audience as the existence of die-hard fans who have stuck to the series for a long time. We selected two titles of different categories and IP to reach as many consumers as possible. We are not limiting the IP for the titles that will follow these two. We will continue to prepare titles using IP that many consumers are familiar with.

I would like to ask about game design for smart device applications. Is Animal Crossing a title that places emphasis on the synergy with dedicated video game systems? Is the game design of Fire Emblem going to be aimed at contributing to earnings? I would like you to explain the objectives of the two titles recently introduced. I would also like you to tell us, to the extent possible, what aspects you would like to reinforce with the remaining two titles to be released before March 2017.

Kimishima:

We chose Animal Crossing and Fire Emblem as titles to follow Miitomo from the viewpoint of increasing the diverse types of consumers interested in Nintendo, and widening opportunities for game play. The Animal Crossing series has been played by a wide range of consumers including children and women. I think there is a good chance that those consumers would enjoy this. As for Fire Emblem, it is not so much the width of the audience as the existence of die-hard fans who have stuck to the series for a long time. We selected two titles of different categories and IP to reach as many consumers as possible. We are not limiting the IP for the titles that will follow these two. We will continue to prepare titles using IP that many consumers are familiar with.

3	I heard that there are over 10 million Miitomo users worldwide. I would like to know the attributes of those users, the number of DAUs (daily active users), as well as how much Miitomo is contributing to earnings. Have there already been positive effects on existing business from its connection with the Nintendo Account system? For applications to be released in the future, are you going to increase the game element and seek to increase revenue from in-app purchases?
3	Kimishima: The over 10 million users are very balanced in terms of gender. There was a slightly higher ratio of women at the beginning. We will not be releasing statistical data such as DAU numbers. As you are well aware, all kinds of ranking information exists for smart device applications, so I will refer you to those. If you look at them and estimate the in-app purchase revenue, I think it will not be too far off from reality. The revenue impact of Miitomo is negligible for the fiscal year ended 2016, as we have only just started. The Miitomo download numbers are growing right now, so I think the in-app purchase revenue is also growing more or less as expected. As for in-app purchases in future titles, we will be releasing titles with strong game elements, as I just explained. The game application content and the type of player vary widely depending on the IP used. Some titles have many fans who may purchase paid content to enhance their play. As for the Nintendo Account, it is not necessary to register (for a Nintendo Account) in order to play Miitomo. Registration on the Nintendo Account grants membership to "My Nintendo", a membership service. We will be providing a wide array of services for these members in the future. Consumers playing Miitomo are gradually creating their own Nintendo Accounts. In the graph just presented, there were no numbers, but you could see the increase in the number of My Nintendo members. Henceforth, we would think about ways for consumers with no Nintendo Account to register at the time a new application is released. We hope to increase the number of My Nintendo members in this way.

I heard that there are over 10 million Miitomo users worldwide. I would like to know the attributes of those users, the number of DAUs (daily active users), as well as how much Miitomo is contributing to earnings. Have there already been positive effects on existing business from its connection with the Nintendo Account system? For applications to be released in the future, are you going to increase the game element and seek to increase revenue from in-app purchases?

Kimishima:

The over 10 million users are very balanced in terms of gender. There was a slightly higher ratio of women at the beginning. We will not be releasing statistical data such as DAU numbers. As you are well aware, all kinds of ranking information exists for smart device applications, so I will refer you to those. If you look at them and estimate the in-app purchase revenue, I think it will not be too far off from reality.

The revenue impact of Miitomo is negligible for the fiscal year ended 2016, as we have only just started. The Miitomo download numbers are growing right now, so I think the in-app purchase revenue is also growing more or less as expected.

As for in-app purchases in future titles, we will be releasing titles with strong game elements, as I just explained. The game application content and the type of player vary widely depending on the IP used. Some titles have many fans who may purchase paid content to enhance their play.

As for the Nintendo Account, it is not necessary to register (for a Nintendo Account) in order to play Miitomo. Registration on the Nintendo Account grants membership to "My Nintendo", a membership service. We will be providing a wide array of services for these members in the future. Consumers playing Miitomo are gradually creating their own Nintendo Accounts. In the graph just presented, there were no numbers, but you could see the increase in the number of My Nintendo members. Henceforth, we would think about ways for consumers with no Nintendo Account to register at the time a new application is released. We hope to increase the number of My Nintendo members in this way.

Outline | Presentation by the President | Q & A