Nintendo’s 79th annual meeting with shareholders has taken place and out of it has come a Q&A with members of their leadership. Many topics were covered including the success of the Switch, Nintendo’s focus on the future, and how they plan to continue to compete in the marketplace while technologies evolve.
You can find the full Q&A here but there are a few notable responses that we wanted to highlight:
The strength of Nintendo Switch is the many Nintendo titles to be enjoyed, but it also has a weakness in that you cannot play some AAA titles from other major software publishers. Some of those titles do get ported to Nintendo Switch after a while, but as other companies launch their next-generation game systems next year and beyond, and open a performance gap with Nintendo Switch, won’t it become even more difficult to port such games?
Shuntaro Furukawa (Representative Director and President): “We consider our hardware installed base to be a particularly important factor for publishers who are deciding whether to release software on our platforms. Therefore, we believe that our primary focus is to increase the hardware install base, generate momentum, and create an environment where publishers can supply their titles with confidence.
Depending on their circumstances, every software publisher needs something different from our hardware for their business, so we need to maintain an environment in which we can closely communicate with each of these companies. We currently offer a user-friendly development environment meant to lower the barriers to developing games for our platforms, with support for a number of versatile game engines that are already familiar to many developers. These game engines are being actively used not only by indie game developers but also by development teams at large to mid-size software publishers, so you can expect announcements for a variety of quality titles moving forward.”
There is an impression that Nintendo has been a little slow to join large global trends like the mobile business and releasing games that use VR. The current global discussion now is of the entrance of major corporations into cloud computing and streaming games, as well as alliances between rivals in the arena of cloud gaming. What are Nintendo’s thoughts on these trends, and how do you plan to respond? Also, how does Nintendo plan to respond to the change in communications standards from 4G to 5G?
Furukawa: “While we don’t expect all games to become cloud games any time soon, the technologies are definitely advancing. We see a future where cloud and streaming technologies will develop more and more as a means of delivering games to consumers. We must keep up with such changes in the environment. That being said, if these changes increase the worldwide gaming population, that will just give us more opportunities with our integrated hardware and software development approach to reach people worldwide with the unique entertainment that Nintendo can provide.”
Shigeru Miyamoto (Representative Director, Fellow): “We have not fallen behind with either VR or network services. We worked on them from the very beginning, and have been experimenting with them in a variety of ways. In that time, we have objectively evaluated whether they actually allow our consumers to have an enjoyable play experience, and whether we can operate them at an appropriate cost. Because we don’t publicize this until we release a product, it may look like we’re falling behind. In regards to VR, we think that we have created a product that is easy for our consumers to use in the recently released Nintendo Labo Toy-Con 04: VR Kit. Nintendo consumers encompass a wide range of ages, including young children, so we will continue to create and announce products that can be enjoyed by anyone.
I think that cloud gaming will become more widespread in the future, but I have no doubt that there will continue to be games that are fun because they are running locally and not on the cloud. We believe it is important to continue to use these diverse technical environments to make unique entertainment that could only have been made by Nintendo. The number of people coming into contact with digital devices is increasing more dramatically than ever before. For example, Super Mario Run has surpassed 300 million downloads. The fact that we’ve reached such a market means that opportunities for us are greatly expanding, so we would like to work on more and more unique projects.”
Ko Shiota (Director, Senior Executive Officer): “5G can send a large amount of data without latency. We are aware that this technology has been gaining a lot of attention, and Nintendo is also investigating it. However, we don’t only chase trends in technology. When considering what to offer in our entertainment and services, we think about both how the technology will be applied to gameplay and what new experiences and gameplay we can offer consumers as a result of that application. Cost is also an extremely important factor when it comes to 5G. It’s difficult to use even an outstanding technology if the cost is too high, so we will continue to also thoroughly investigate the cost of new technologies.”
A Nintendo Switch Online subscription is very inexpensive, so the barrier to entry feels low, but on the other hand the content of the service still feels rather weak. How will you enhance the service going forward?
Furukawa: “The number of subscribers for Nintendo Switch Online has increased steadily since the service was launched last September, and it has now surpassed 10 million accounts. Nintendo Switch Online provides users the ability to play Nintendo Switch games over the internet, both competitively and cooperatively. It also provides services such as Nintendo Entertainment System – Nintendo Switch Online, Save Data Cloud Backup, and smartphone application services such as online lobbies and voice chat. In addition, we provided TETRIS 99 as a special offer to Nintendo Switch Online members this February, and then in May, began selling Nintendo Switch Game Vouchers that allow users to purchase two Nintendo Switch download titles at a discount. We recognize that making the Nintendo Switch Online service attractive to users is extremely important, and will continue to make the content of the service even more appealing going forward.”
Our Take
We suggest reading the full Q&A as there’s some interesting takes from Nintendo on a wide range of topics. However, it’s rather clear in reading the responses that Nintendo continues to be focused on their more traditional model and they will explore new areas at their own pace rather than seeing a need to keep up with industry trends.
As we’ve discussed many times here at SG, while we don’t always necessarily agree with Nintendo’s approach, and feel the Switch is behind in a number of areas like online infrastructure, there’s certainly no arguing about the success of the platform. And it doesn’t look to be slowing down any time soon.
