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Key Takeaways From Nintendo’s Shareholder Q&A

by Donald Theriault - February 12, 2016, 4:30 am PST
Total comments: 12

Including a drop-dead date for the NX.

The full translation of Nintendo’s shareholder Q&A from February 2 has released, and with it some interesting statements about the future of Nintendo. With this being Kimishima’s second rodeo, he’s settling into a groove of simultaneously saying nothing and everything.

Reading through the Q&A, there are four major takeaways.

1: Something NX is launching by March 31, 2017.

“To achieve Nintendo-like profits, one important factor will be establishing a solid launch for our NX and smart device businesses.”

“The question was to pick one area with which we will be able to achieve Nintendo-like profits, but I would like to suggest two areas. One area is our NX business, and another is our business for smart devices”

In two consecutive questions, Kimishima is asked about the company’s desire to return to “Nintendo like profits”. Despite the operating profits this year, the statements indicate that next year will do gangbusters on the back of Miitomo and other smartphone apps/games plus the NX launch. If the plan is to have a “solid launch” for NX during the next fiscal year, we know the last possible date it can launch: March 31, 2017.

Realistically, that’s not going to happen. (Though March 31, 2017 is a Friday, Nintendo’s traditional release day…) So much of the game industry – especially in its largest market, North America - has been focused on holiday shopping that Nintendo would be insane to launch hardware in winter as they did with the 3DS and New 3DS.

Speaking of the 3DS…

2: The 3DS going gangbusters this year is intentional. But that’s probably going to be it.

“…we have sold over 54 million units of Nintendo 3DS hardware, but it would have been possible to sell more software if all 54 million systems were in frequent use”

The “no Pokémon, no Smash” sales slump for the 3DS has been well documented in all of the sales announcements. In a post-smart device world 54 million is fair - a lack of realistic competition helps in this regard - but for Nintendo, who has a wildly underperforming console to go with it, it’s a problem.

Outside of Japan, Nintendo is releasing a lot of 3DS software designed to accomplish the goal of releasing software “that makes people want to play,” and “create an environment where people around you are playing.” There also seems to be a major unannounced 3DS title that would fit in this regard (hello Pokémon RPG!). Japan is seeing some of these titles from 3rd parties with the strength of Yo-Kai Watch and Monster Hunter Stories, but a lot of the things the West is seeing already came out over there.

The other key factor is a focus on women, which worked well in Japan and parts of Europe, but didn’t play as well in North America. Nintendo expanding their focus in North America this year may point to something coming across the pond.

3: Nintendo is aware they need to get younger

“For example, due to changes in our industry, the proportion of young consumers who are first experiencing games on our systems has been falling.”

The average Nintendo buyer is skewing older, while smart device gaming is becoming the gateway for many younger people into games and largely, they’re fine with that. This presents a long term problem for Nintendo, which is why they’re aiming to expand the reach of the characters. The Q&A mentions electric toothbrushes and apparel, but the larger plans (such as the Universal Studios deal) won’t bear fruit until at least fiscal 2017 (April 2017 – March 2018).

It’s not just the consumer base skewing younger though, it’s the developers as well. The runaway success (comparatively) of Splatoon combined with the reorganization has allowed younger developers to shine. Whether it’s having Yoshiaki Koizumi as the face of the Mario franchise instead of Miyamoto, or the emphasis on “garage” development and getting the voices out there, a lot of the older guard is going to be standing down in the years ahead.

The cats seemed to indicate that there was a major unannounced or even unrumored Wii U title in development to come out soon; if that’s the case, it’s probably going to be from fresh faces and have high youth appeal. They do want to have a Wii U game with appeal similar to Splatoon or Super Mario Maker, so who better to design it?

4: Eventually, a new Nintendo property will debut on mobile

“We are also considering developing titles for smart devices that are not at all tied to any games on our existing dedicated video game systems.”

The focus is on Miitomo and the four other games coming out this coming fiscal year, which from appearances will use existing Nintendo property. The shareholders want New Super Mario 3 to be mobile, we’ll probably get a Kirby or Samus or Isabelle thing, the circle of life goes on.

However, Nintendo puts out new franchises more than people realize (see: anyone who thought the last franchise before Splatoon was Pikmin), so it’s entirely possible that a new character or game will emerge from the mobile plan if it’s a contributor to Nintendo’s bottom line. The younger developers (mentioned above) will be able to create something new and have it work in the Nintendo family.

Now, whether something from those games makes it to Super Smash Bros for the systems after NX or not, that’s to be determined. But it could be something to watch for.

Talkback

michaelbaysuperfan616February 12, 2016

If a major Mario game is released mobile only that could be a problem, but if it gets a mobile first release then a Nintendo release latter on that would be acceptable. NX making Nintendo profitable by the end of next March confirms it is launching this year for sure, which is good news but we all should have expected that.

Ian SaneFebruary 12, 2016

"Nintendo is releasing a lot of 3DS software designed to accomplish the goal of releasing software 'that makes people want to play,'"

This is so full of corporate nonsense speak that I want to barf.  Oh really?  You want to release games that people want to play on your videogame system?  No shit!  What the hell else is the 3DS for?  Nintendo also released pretty much jack shit on the 3DS over the last year so any weaker sales makes perfect sense.  The non-remake first party titles like S.T.E.A.M., Tri Force Heroes and Happy Home Designer all had serious flaws.  Last year was just simply a better year for 3DS releases.

The need to get younger actually makes sense and unfortunately I fear Nintendo's response will be to dumb things down and make truly kiddy games.  Kids identify with the IP they grow up with and they want their own IP distinct from what their parents had.  Mario was the IP for my generation.  By the time a new group of kids were ready to become Nintendo fans they released Pokémon but they haven't really had a new IP for the next group of kids to take as their own.  Wii Sports was a very successful new IP but it seemed aimed more at non-gaming adults.  It doesn't even have actual characters for kids to latch onto.  Nintendo sticks a lot to their established franchises but the people who grew up with those are getting older.  Today's kids are all into Minecraft.  That's a new IP for the current kid generation.  Angry Birds was huge for a while there too.  When I was a kid I sure as hell didn't give a shit about Howdy Doody and Davy Crocket like my Dad did was when he was my age.  That's what Mario is now - something from your parents' childhood.  Mario's still great and still popular but each generation needs their own icons and Nintendo should make sure to provide that.  Splatoon's a good start.

UncleBobRichard Cook, Guest ContributorFebruary 12, 2016

Quote from: Ian

When I was a kid I sure as hell didn't give a **** about Howdy Doody and Davy Crocket like my Dad did was when he was my age.  That's what Mario is now - something from your parents' childhood.

To some extent, I agree with you - but...

My Little Pony.  Scooby Doo.  Transformers.  Hell, Powerpuff Girls, and even, to some extent, Bugs Bunny.

SonofMrPeanutFebruary 12, 2016

Yes, Splatoon is not Nintendo's 1st new IP since Pikmin.  That's a fact.

However, let's consider what people really mean when they say otherwise:  Both games are full-priced retail games, they're both developed internally at Nintendo proper (Not HAL/Intelligent Systems, etc), they both appeal to the "core userbase," and they both got plenty of public attention.

Of the other IPs introduced by Nintendo, what other IP can check off all these boxes?  The closest candidate to achieve this is the Wii/Mii brand that Miitomo is based around, but it doesn't have the same appeal to that "core" audience.  Most players don't even recognize it as a franchise.  The same can be said for their health-based games like Brain Training.  The eShop games, like Pushmo, also come close but don't have the same exposure or take up the shelf space a "AAA franchise" would.  They're also not games that would heavily circulate in E3 conversation.

In short, when someone says they want a New Nintendo IP, they're typically looking for a full-priced, retail game, internally developed by whatever the equivelent of an EAD studio is now, has appeal to the "core" player and gets a considerable E3 presence.  Up to Splatoon, Pikmin was their last project to accomplish all of this.

Ian SaneFebruary 12, 2016

What did the Wii U launch with?  Mario, who debuted when I was literally in the womb, and Nintendo Land which is all about nostalgia for Nintendo's long established franchises.  And Nintendo is surprised that their userbase is getting older?  The whole Wii U launch was focused on their old IP.  If you play up to nostalgia as a selling point you're going to get an older audience.  Hell, isn't that the point of nostalgia?

For a long time now Nintendo has been a dinosaur brand trotting out the same old franchises.  I know they do make new stuff but not to the level where this reputation for rehashing the same old thing isn't there.  As SonofMrPeanut pointed out Pikmin and Splatoon had a lot more visibility so the issue might be a matter of marketing.  Nonetheless Nintendo's reputation is such that they're seen as a nostalgia company and not one that is constantly introducing new stuff.  Again, that's the perception.  So I can't see why new generations of gamers are going to be interested in the company that has a reputation for being trapped in 1988.

The same old franchises did nothing for the Gamecube.  The Wii found a new audience, though mostly an adult one, with a new IP.  The Wii U did the same old franchises bit again and sure enough they failed to move systems.  Ah but Splatoon is a surprising success.  Do they not see the pattern?  There is no harm in those franchises being there.  Hell I would EXPECT new Mario and Zelda fans each gen.  But they need to be complimented by more new IP, visible well-marketed IP that people actually notice.

Every generation new IP breaks out and becomes a big hit of the generation.  Last gen Uncharted or Gears of War or Mass Effect or Assassin's Creed didn't exist but they were big brands by the end of the generation.  It isn't like there aren't tons of examples of publishers making new successful brands every generation.  They must INTENTIONALLY do it since they all do it.  Hell Activision is like the king of rehashes and yet a new generation starts and they're pushing the shit out of Destiny to make a new brand for the new generation.

AdrockFebruary 12, 2016

Quote from: Ian

The need to get younger actually makes sense and unfortunately I fear Nintendo's response will be to dumb things down and make truly kiddy games.

I don't see how one can reasonably have this fear at this point given what little evidence there is to support it.

As for Mario, Nintendo has done an excellent job of keeping him relevant. There haven't even been any major and/or desperate reinventions of the character unless you count Mario Strikers (I don't). The problem with the examples you provided is that they ended. That happens to a lot of properties. They run their course. Some can be salvaged; other can't. It takes a tremendous amount of effort to reintroduce them years later. That fails more often than not. Nintendo has consistently kept Mario in public consciousness for 35 years now with quality games. Until that stops being true, Mario is going to continue appealing to newer generations.

Still, Nintendo's intellectual properties, particularly Mario, are the exception to the rule so it's good for Nintendo to keep experimenting with new properties and giving younger members of its staff a louder voice.

Quote from: Ian

The Wii U did the same old franchises bit again and sure enough they failed to move systems.  Ah but Splatoon is a surprising success.  Do they not see the pattern?

I'm not really understanding your point here. Splatoon didn't really move systems either. Wii U is still under 15 million units sold. Nintendo's franchises have all sold pretty well. They probably would have sold a hell of a lot better had Nintendo not failed Wii U so entirely. It squandered Wii's momentum then launched an unfinished successor with an embarrassing lack of marketing and first party titles. By the time Nintendo finally released a decent collection of its well-known franchises, it was curtains for Wii U. There was no coming back from how truly awful Wii U's first year was. At that point, all Nintendo could really do was make the best of a bad situation. It's released some of its best games since.

Bman87301February 12, 2016

Realistically not going to happen? You guys need to do better research-- GBA (in Japan anyway) and 3DS both came out around that time time of year so if there is a very real precedent for it... especially if it's a handheld, and the ambiguous way it said "Something NX" seems to be suggesting it won't be the full traditional console, which will probably come later.

Quote from: Adrock

Quote from: Ian

The need to get younger actually makes sense and unfortunately I fear Nintendo's response will be to dumb things down and make truly kiddy games.

I don't see how one can reasonably have this fear at this point given what little evidence there is to support it.

As for Mario, Nintendo has done an excellent job of keeping him relevant. There haven't even been any major and/or desperate reinventions of the character unless you count Mario Strikers (I don't). The problem with the examples you provided is that they ended. That happens to a lot of properties. They run their course. Some can be salvaged; other can't. It takes a tremendous amount of effort to reintroduce them years later. That fails more often than not. Nintendo has consistently kept Mario in public consciousness for 35 years now with quality games. Until that stops being true, Mario is going to continue appealing to newer generations.

Exactly. Mario is Nintendo's Mickey Mouse, he's timeless and has a broad appeal that has stayed consistent for decades. That's one franchise Nintendo doesn't have to worry about.

Ian SaneFebruary 12, 2016

Disney doesn't just release new Mickey Mouse cartoons every year.  And not everything is a sequel either.  They're always coming up with new stuff to get new generations interested in them.  As a kid Mickey was an icon and all but what really made me interested in Disney were films from my childhood like the Little Mermaid and Aladdin.

There's nothing wrong with Mario and he should stick around, particularly in platformers, Mario Kart and SSB.  But they rely on him too much.

You can give examples of iconic IP from your childhood that was already old when you were a kid and I can too (GI Joe, Flintstones, Bugs Bunny) but there was also new stuff that was specifically "mine", like Mario.  If Nintendo wants to attract young people better than they are then they need something for that generation to see as their own.

KhushrenadaFebruary 12, 2016

Mickey Mouse cartoons are what drew me into Disney as a kid and I'm probably the same age as you. My younger brother and I were always disappointed that Disney wasn't making new Mickey Mouse cartoons as we grew up. We'd rent and watch the old cartoons from the video store of various Mickey Mouse collections. For awhile, Disney did a line of comic books for Ducktales, Rescue Rangers along with classics like Mickey Mouse, Goofy and Donald Duck. I wasn't all concerned about finding some Disney property of my own for my generation.

As we grew up and Disney released new movies and cartoons, we'd watch it because it was just part of the Disney brand that we liked thanks to the introductions we had by Mickey Mouse and friends along with classic films like Bambi, Cinderella, The Jungle Book. etc. Even though we watched Goof Troop, Talespin, Aladdin, Darkwing Duck and other Disney TV series that my parents had never seen or bothered to watch, it wasn't because I wanted some property that was my own. It was just because that's all Disney was putting on the air and releasing at the time. They were just the cartoons that were being aired when we got home from school. Heck, I was upset sometimes when a series ended and a new cartoon replaced it. I think you are way overstating or overthinking this idea that Nintendo has to come up with IP's so a younger generation can have their own gaming identity or they won't want to play Nintendo games and just using it as a way to back up your desire they'd make new IP's for you.

If anything, I think making sure to introduce kids to these long-running properties early is a better idea to create a nostalgia for them sooner and help interest them in seeking out the older titles in the series to try them than if they grew up not playing a Mario game. Otherwise, they'll play other properties and develop an attachment with them or that brand and then it will be that much harder to give some older properties a try later on. That's how its worked with me and Nintendo. There's been time that a game or series has interested me on another console but not enough for me to bother buying another console because it's not going to have the majority of the games I've come to love and I want to keep sticking with Nintendo's series because of that.

SonofMrPeanutFebruary 12, 2016

Yes, Mickey Mouse.  A character Disney didn't give a dedicated short/film for 3 decades.  I know that's a common comparison for Nintendo using a lot of Mario, but even Disney knew the value of not overdepending on their mascot.

Quote from: SonofMrPeanut

Yes, Mickey Mouse.  A character Disney didn't give a dedicated short/film for 3 decades.  I know that's a common comparison for Nintendo using a lot of Mario, but even Disney knew the value of not overdepending on their mascot.

What's funny is Mickey's place in Disney is currently on smaller scale tv shows, branding, & as window dressing between other shows on their channel. 


I wonder how much Mario is going to be like this in the future.  I definitely feel like Nintendo has done a good job giving Mario games (2D & 3D platformers) a bit of a breather.  They need to go back to being a "big event" game, even the 2D ones.

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