Nintendo had its ‘Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2019’ this week.
The Q&A section of these Financial Results Meetings discuss Nintendo’s health and future in more detail. Members like President Shuntaro Furukawa, Representative Director Shigeru Miyamoto, and Senior Managing Executive Officer Shinya Takahashi give responses throughout the Q&A.
The topics of discussion ranged from women game developers to the status of the theme park and game addiction. There were more topics of discussion in this Q&A, and we are highlighting the ones we thought were notable.
When asked about Nintendo 3DS sales and its coexistence with the Switch, the interviewer also asked about the potential for a cheaper or smaller Switch. Furukawa responded by discussing the relevance in demand the 3DS still maintains, and that they will still continue to support it until otherwise. Nintendo’s current plan on Switch is to ensure that households have at least one Switch, and then expanding that to multiple consoles in the same home.
Unit sales of Nintendo 3DS have declined significantly. Iʼd like to hear your thought on sales
plans, for instance, coexistence of Nintendo 3DS and Nintendo Switch, as well as any ideas for
Nintendo Switch at a lower price point or smaller size as such.Furukawa:
While the Nintendo 3DS market has contracted faster than we anticipated, currently many of
consumers who newly purchase Nintendo 3DS are consumers purchasing Nintendo 3DS as their
first game system. Nintendo 3DS is appealing as a portable game system, that is easy to carry
around since it is small and light, and at a very desirable price point. Demand still remains from
parents looking to purchase a first game system for their children. That is why our basic policy is
to proceed with both Nintendo Switch and Nintendo 3DS in our dedicated video game platform
business.Regarding future sales of Nintendo Switch, what we first need is to drive sales of one system
per household, and we will work towards increasing demand to expand the installed base much
further than now. On the other hand, in a survey of households asking how many family
members use Nintendo Switch, we found that, while a certain number of households have
multiple family members who play on a single console, some households have already
purchased multiple consoles. Going forward, we aim to generate such demand among
consumers as they feel like “I want to have my own Nintendo Switch console” through measures
such as software offerings, not necessarily so that each person will have one, but so that each
household will have multiple Nintendo Switch consoles.
Nintendo has been working with Universal to develop a Nintendo Theme Park. The theme park is set to open by the 2020 Summer Olympics in Tokyo. When asked for a comment, Miyamoto responded by stating that there was nothing they could say, but that “it will be really worth the wait.”
This is about theme park development. With work progressing steadily to open the theme park
by the start of the 2020 Summer Olympics in Tokyo, I would imagine that a complete view of the
project is getting clear inside the company, since itʼs about a year away from opening. Is there
anything about this topic you can comment on at this time? Iʼd like to know in which schedule
and timing you will announce details.Miyamoto:
Because the theme park is operated by Universal Parks & Resorts, we cannot talk about
anything they have not yet announced. But every effort is being made to advance preparations,
and Universal Studios Japan is our top priorities, as is making sure we will be ready by the start
of the Tokyo Olympics in 2020. After the opening in Japan, “SUPER NINTENDO WORLD” areas
will also be built in the parks in Hollywood and Orlando in the US for the enjoyment of everyone.
We are in frequent contact with Universal Parks & Resorts, working closely together to
develop the theme park from a creative standpoint. Building work on our area at Universal
Studios Japan is progressing, and the construction of interiors will be starting on a full-scale
operation. Osaka is close to Kyoto, so we check on the progress of the work frequently. I think it
will be really worth the wait.
The topic of more women playing video games year after year led to a discussion on how many women employees exist in Nintendo. Takahashi and Miyamoto state that there are many women in the software development side of Nintendo. Miyamoto even makes note that the director of the Animal Crossing series is a woman. However, Shiota states that representation of women in hardware development is low. Shiota hopes that as Nintendo’s work in unique technologies continue, more women employees will exist in the company.
Female gamers are growing in number year after year, but what is the proportion of female
employees in your hardware and software development departments?Takahashi:
There are many female developers in the software development departments. Especially,
there are many design works involved in developing software, and very high number of females
among our designers. Many of them have children, and we have created an environment to work
with comfort even for those who have children. I think that it is a very good workplace where
women can participate actively and find satisfaction in their work.Miyamoto:
There are also many females actively involved in development. The director of the Animal
Crossing series is a woman, and there are many female designers working actively. When I had
chances to look at other development companies in Europe and the US, they give the impression
that theyʼre overwhelmingly male-dominated. Compared to companies like that, Nintendo has a
lot of female developers energetically working.Shiota:
This is a common issue in Japan that there is not a high percentage of female workers in
engineering professions like hardware development and systems development. And itʼs true in
our company that compared to software development, the percentage of female workers in
hardware development is low. However, Nintendoʼs work includes approach to unique
technologies, so I believe the proportion of female employees could potentially change in the
future.
Furukawa and Takahashi were asked about Nintendo Switch Online’s growing 8 million subscribers. Both of them attributed the service’s success to Super Smash Bros. Ultimate. In addition to this, the interviewer asked what Nintendo is going to offer members going forward. Unfortunately, they had nothing to discuss at the time.
You mentioned (in the presentation) that the Nintendo Switch Online subscriber base (excluding
free trials) has exceeded 8 million accounts, which suggests the service has gotten off to a really
good start. I assume the people who purchased Super Smash Bros. Ultimate subscribed to the
service at once, but I am wondering how many signed up for 12-month memberships.
Given the current content of the service and your pace of releasing a few major, first-party titles
in a year, I imagine it might be hard to maintain a relationship with those members. The service
is off to a great start, but what do you plan to offer to members going forward?Furukawa:
We do think Nintendo Switch Online has had a good start coming out of the holiday season,
helped in large part by Super Smash Bros. Ultimate.
We are not disclosing details by each membership plan but among consumers who have
purchased memberships, however, a growing percentage is now opting for shorter plans like the
one-month membership. This is in contrast to the situation around the end of October of last
year, when we reported that over half were opting for a 12-month family or individual
membership.It is critical that these members want to continue using the service for a long time rather than
letting it expire, and for that we need to build relationships with consumers and enrich the
content. With this in mind, we are currently planning ways to boost the appeal of the service on a
yearly basis. We will announce more details as soon as we are ready.
As was mentioned in the presentation, Nintendo Switch Online is a way to leverage Nintendo
Accounts to build long-term relationships with consumers. As such, it is very important to our
future business and we are giving it our all.Takahashi:
The recent release of Super Smash Bros. Ultimate built on the first surge in membership
sparked by Splatoon 2 led to take the subscriber base to where it is today in terms of numbers.
We are preparing various new offerings for consumers who subscribe to the service.
Video game addiction is currently being investigated by the Ministry of Health, Labour and Welfare in Japan. It is a real concern for some players and their families. Furukawa acknowledged the issue, but believes the problem is not about the games themselves but “becoming overly dependent on video games.” He believes raising awareness and giving parents the tools to limit game time can help address the issue.
On the other side of the globally expanding gaming population and the sudden rise of e-sports,
video game addiction is currently under study by the Ministry of Health, Labour and Welfare in
Japan and it seems to become a social issue. What is your acknowledgment of video game
addiction, and what measures are you considering to combat it?Furukawa:
I think the problem of game addiction is more about becoming overly dependent on video
games than is about any issues with the games themselves. One thing we have done as a
company that creates games is to implement features that allow parents to limit the time that
their children can play games. I think that further implementing features like this, and raising
awareness among more people that these features exist is one way we can face this issue.
Nintendo was asked about their software lineup for the next fiscal year and the year after. Takahashi stated that Nintendo is preparing to release a title that is a “good fit for Nintendo Switch Online.” Miyamoto mentioned Nintendo’s collaboration with other companies on software development. Even though Nintendo is working at a larger scale, they make the effort to nurture developers at Nintendo.
The “expanding” part of “expanding the number of people who have access to Nintendo IP” may
be important, but looking at third-quarter software sales and the presence of two titles with
sales of over 10 million units in a single quarter, it seems pursuing “depth” is also important. I
think it is important to provide more software for consumers who have already purchased
Nintendo Switch. I’d like to know your software lineup for next fiscal year and after, and if you’ve
considered the possibility of increasing R&D spending to increase title count going forward.Furukawa:
As you’ve pointed out, “depth” is also important, and we’ve considered many factors with
regards to our future lineup.Takahashi:
In addition to the titles we have already announced for scheduled release in 2019, we’re also
preparing for releasing software titles which would delight consumers including one that is good
fit for Nintendo Switch Online. As developers, we are always thinking about how we come up
with seeds of entertainment that consumers are going to enjoy, and how to grow it to new
products. I would like to continue developing and releasing such products in the future as well.Miyamoto:
I have a very positive attitude about R&D investment. Because we are cooperating with other
companies on software development, weʼre working on a larger scale than what can be handled
solely within the company in terms of managing software development. But even as we expand
the development scale, it is important that we will firmly maintain the Nintendo-made quality of
the software. I know some people say we just need to hire more developers. We arenʼt merely
focused on increasing development staff, but we are focusing on nurturing more developers
adequately within Nintendo. I want us to actively invest in the products we develop, in order to
maintain the quality we desire.
If you’d like to read the entirety of the Q&A, you can do so here.
What do you think about the answers? Is Nintendo on the right track? Let us know.
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