The 70th Annual General Meeting of Shareholders Q & A

The 70th Annual General Meeting of Shareholders

16	I am a heavy user of Nintendo's products, but I sometimes feel uncomfortable at home. Except for games like Mario for Wii, which can be enjoyed by many people at once, I often play single-player games after my family members go to bed. I believe quite a few people have such feelings at home like me. Do you think plan to use PR methods like the character business, for example, to alleviate this situation? While Pokémon characters seem to be promoted on a massive scale, I have not seen other characters on TV or in the street so much, although I feel that they have enough potential to be. In addition, do you have any long-term business expansion plans for extensions to your business such as building theme parks as an ultimate goal?
16	Iwata: We think that our explanation regarding "Issues to be addressed" will respond to your first comment of unpleasant feelings at home. I mean, we are aiming to improve the social acceptance of video game, and consequently, expand the gaming population. Encouraging all family members to view video games positively is a very important mid-and-long term issue for us. Regarding our character business, please let us explain the reason why Pokémon is handled differently. There is a company called The Pokémon Company, which specializes in the management and promotion of Pokémon characters. Pokémon became a major boom in Japan, the U.S. and Europe from the end of the 1990s to around 2000. Maintaining a character business is relatively easy when we just intend to gain short-term prosperity. However, there are remarkably few character businesses prospering in the long term. That is because many character businesses are operated in a manner that people consume the value of characters and when all the values are exhausted, another character is prepared alternatively. Naturally, there are a few exceptions of very long and valuable character businesses, but they are still the minority. We once felt a sense of crisis that Pokémon's value would be diminished shortly if we continued the then-ongoing strategy at that time. Therefore, we established The Pokémon Company for the purpose of managing all associated character licenses, with its definitive role of considering Pokémon's mid-and-long term future. I do not believe that Pokémon's value would remain at such a high level if it had not been for those decisions we made ten years ago. It was fortunate that there was a suitable person who was able to manage the Pokémon character business. Regarding the other Nintendo characters, of course we have to seek several possibilities and make operational decisions. One alternative is that Mr. Shigeru Miyamoto, who has developed a lot of software featuring Nintendo characters like Mario, become responsible for planning the other characters' business promotion. In that case, however, he would not be able to spare as much energy as now for the development of video games. In the case of Pokémon, we could allot responsibilities well because the development of video games and the character business were incidentally handled by different people. When it comes to Mario, we do not believe that we could do it as well as this. If you thought that Nintendo has been keen on promoting characters of Pokémon but nothing else, this is one of the backgrounds of our attitudinal differences. Becoming more active in the character business is one of the future possibilities for us. But if we make mistakes in the character business, the value of the characters itself can be damaged. We believe that Mario's value will be kept in a high level by letting him continue starring in the latest, most interesting video game every time. As for the other characters too, we think the most important thing is to determine their roles and let them shine in the world of video games first and foremost. We will operate a character business only after we are convinced that the value of our characters will never be damaged. In addition, we do not believe that it would be beneficial for Nintendo if Mr. Miyamoto used his energy for any other purposes than video games. Regarding a theme park, we do not have any specific plans although it sometimes becomes a target of discussion, news or rumor. If we had a plan, it would be different to existing theme parks. If a method was invented to realize our unique and original park, utilizing our advantages in the video game field, it may be possible in the future. In other words, Nintendo has not ruled it out. However, please understand that it would not be always beneficial for Nintendo, as a whole company, to make a theme park which is similar to the existing ones, and only uses Nintendo's characters.

I am a heavy user of Nintendo's products, but I sometimes feel uncomfortable at home. Except for games like Mario for Wii, which can be enjoyed by many people at once, I often play single-player games after my family members go to bed. I believe quite a few people have such feelings at home like me. Do you think plan to use PR methods like the character business, for example, to alleviate this situation? While Pokémon characters seem to be promoted on a massive scale, I have not seen other characters on TV or in the street so much, although I feel that they have enough potential to be. In addition, do you have any long-term business expansion plans for extensions to your business such as building theme parks as an ultimate goal?

Iwata:

We think that our explanation regarding "Issues to be addressed" will respond to your first comment of unpleasant feelings at home. I mean, we are aiming to improve the social acceptance of video game, and consequently, expand the gaming population. Encouraging all family members to view video games positively is a very important mid-and-long term issue for us.

Regarding our character business, please let us explain the reason why Pokémon is handled differently. There is a company called The Pokémon Company, which specializes in the management and promotion of Pokémon characters. Pokémon became a major boom in Japan, the U.S. and Europe from the end of the 1990s to around 2000. Maintaining a character business is relatively easy when we just intend to gain short-term prosperity. However, there are remarkably few character businesses prospering in the long term. That is because many character businesses are operated in a manner that people consume the value of characters and when all the values are exhausted, another character is prepared alternatively. Naturally, there are a few exceptions of very long and valuable character businesses, but they are still the minority. We once felt a sense of crisis that Pokémon's value would be diminished shortly if we continued the then-ongoing strategy at that time. Therefore, we established The Pokémon Company for the purpose of managing all associated character licenses, with its definitive role of considering Pokémon's mid-and-long term future. I do not believe that Pokémon's value would remain at such a high level if it had not been for those decisions we made ten years ago. It was fortunate that there was a suitable person who was able to manage the Pokémon character business.

Regarding the other Nintendo characters, of course we have to seek several possibilities and make operational decisions. One alternative is that Mr. Shigeru Miyamoto, who has developed a lot of software featuring Nintendo characters like Mario, become responsible for planning the other characters' business promotion. In that case, however, he would not be able to spare as much energy as now for the development of video games. In the case of Pokémon, we could allot responsibilities well because the development of video games and the character business were incidentally handled by different people. When it comes to Mario, we do not believe that we could do it as well as this. If you thought that Nintendo has been keen on promoting characters of Pokémon but nothing else, this is one of the backgrounds of our attitudinal differences. Becoming more active in the character business is one of the future possibilities for us. But if we make mistakes in the character business, the value of the characters itself can be damaged. We believe that Mario's value will be kept in a high level by letting him continue starring in the latest, most interesting video game every time. As for the other characters too, we think the most important thing is to determine their roles and let them shine in the world of video games first and foremost. We will operate a character business only after we are convinced that the value of our characters will never be damaged. In addition, we do not believe that it would be beneficial for Nintendo if Mr. Miyamoto used his energy for any other purposes than video games.

Regarding a theme park, we do not have any specific plans although it sometimes becomes a target of discussion, news or rumor. If we had a plan, it would be different to existing theme parks. If a method was invented to realize our unique and original park, utilizing our advantages in the video game field, it may be possible in the future. In other words, Nintendo has not ruled it out. However, please understand that it would not be always beneficial for Nintendo, as a whole company, to make a theme park which is similar to the existing ones, and only uses Nintendo's characters.

17	I would like to ask if Nintendo may supply software for other companies' hardware. I think that Nintendo's style of hardware development is to seek out the preferable features to realize unique ideas for software, and Wii and DS were developed according to this way of thinking. I am expecting a lot of software for Nintendo 3DS with amazing ideas. Meanwhile, other companies are also releasing interesting hardware such as the iPad. I am wondering if Mr. Iwata or Mr. Miyamoto may have happened to get any ideas for these devices, even as little as 1%, for Nintendo 3DS. Although I would not like Nintendo to expand the scope of the business too much, please tell us your business policy.
17	Iwata: We have often been asked if we intend to provide Nintendo's software for other companies' hardware, and have sometimes received such kinds of offers. We really appreciate it because it is evidence that Nintendo's software is highly evaluated. On the other hand, when we think about the reason why Nintendo has been able to receive a good reputation in this entertainment and video game field, it must be because we have both engineers for hardware and developers for software communicating with each other in the same building. Our software developers often make proposals of new hardware to the hardware engineers, and they continue to play a type of "idea catch ball", which has resulted in unique and original proposals that only this company can make to the public, at higher frequencies than the norm. While the entertainment business is driven by software, ours is based on the integration of both hardware and software. The other companies' devices often have characteristics which Nintendo will never adopt. It is not a question of which company is right or wrong, but rather that they have different philosophies. Therefore, at this point we do not have any intent to supply software for the other companies' hardware. Such supply may be beneficial for Nintendo in the very short term, but in a longer term, we feel it would damage the value of Nintendo's platform. As a result, it would not contribute to the creation of Nintendo's future value at all. Alternatively, we would like to keep doing our best to invent our own entertainment with integrated hardware and software which will continue to positively surprise our customers.

I would like to ask if Nintendo may supply software for other companies' hardware. I think that Nintendo's style of hardware development is to seek out the preferable features to realize unique ideas for software, and Wii and DS were developed according to this way of thinking. I am expecting a lot of software for Nintendo 3DS with amazing ideas. Meanwhile, other companies are also releasing interesting hardware such as the iPad. I am wondering if Mr. Iwata or Mr. Miyamoto may have happened to get any ideas for these devices, even as little as 1%, for Nintendo 3DS. Although I would not like Nintendo to expand the scope of the business too much, please tell us your business policy.

Iwata:

We have often been asked if we intend to provide Nintendo's software for other companies' hardware, and have sometimes received such kinds of offers. We really appreciate it because it is evidence that Nintendo's software is highly evaluated. On the other hand, when we think about the reason why Nintendo has been able to receive a good reputation in this entertainment and video game field, it must be because we have both engineers for hardware and developers for software communicating with each other in the same building. Our software developers often make proposals of new hardware to the hardware engineers, and they continue to play a type of "idea catch ball", which has resulted in unique and original proposals that only this company can make to the public, at higher frequencies than the norm. While the entertainment business is driven by software, ours is based on the integration of both hardware and software. The other companies' devices often have characteristics which Nintendo will never adopt. It is not a question of which company is right or wrong, but rather that they have different philosophies. Therefore, at this point we do not have any intent to supply software for the other companies' hardware. Such supply may be beneficial for Nintendo in the very short term, but in a longer term, we feel it would damage the value of Nintendo's platform. As a result, it would not contribute to the creation of Nintendo's future value at all. Alternatively, we would like to keep doing our best to invent our own entertainment with integrated hardware and software which will continue to positively surprise our customers.

BACK | 1 2 3 4 5 6 |