1. I have a feeling that no other companies have succeeded in properly taking advantage of the functions of the Wii or the Wii U. What does Nintendo think of bringing up creators in the video game industry as a whole? How do you cultivate brand-new developers who can come up with interesting games independent of the performance of the hardware?
A1. Satoru Iwata (President, Chairperson of the shareholders' meeting):
Please let me confirm that your question is about bringing up video game creators in the entire industry, not just young people in Nintendo. (After he confirms the questioner’s approval): For the Wii, as you mentioned, it has been certainly pointed out that software developed inside Nintendo uses the hardware’s functions better than that developed by third parties. As there are third-party games using them in a very good manner, it would be rude of us to claim that this is the general trend. Creators have their home ground: Some are good at coming up with ways to play using a new structure and others are experts at creating games with breathtaking visuals or heavy storylines. It might have been that the latter didn’t go so well with the pros and cons of the features of the Wii.
On the other hand, we don’t think Nintendo alone is able to develop every type of software to satisfy all consumers. Therefore, we have been working to improve the development environment to let as many creators design games that take advantage of the features of a certain hardware as possible. One is to establish a trusting relationship with third-party developers and provide them with information on a new platform so that they can start creating games simultaneously with those in Nintendo. As we have been able to build such a relationship with more third parties than before, it was less frequently said for the Nintendo 3DS that the Nintendo games available at the launch of the new platform were more sophisticated than those of third parties. We are working to further improve the situation for the Wii U.
With regard to cultivating creators in the entire industry, we make efforts to hold the “Nintendo Game Seminar.” It is temporarily on hold until the next fiscal year owing to the Great East Japan Earthquake, though. The seminar participants, who are university students, go to our office in Kanda (in Tokyo) for about nine months, experience video game development with our junior employees and the completed games, which were for the Nintendo DS in the past, are made available to the public by download. Some participants joined our company after completing the seminar and have been already performing well in creating products. Also, I hear that others are working for other video game developing companies. In this context, the seminar contributes to the cultivation of creators in the whole video game industry.
In addition, we are changing our way of cooperating with other companies. One recent example is that we will develop a new game from the “Smash Bros.” franchise together with NAMCO BANDAI Games and NAMCO BANDAI Studios. We would like to develop fascinating software in line with the theme of the series by combining their specialties and our ability to brush things up. We can avoid a case where all the Nintendo staff members are devoted to one big project and we have no power to develop other games, which is another benefit of co-development with people in other companies. We hope that each development team will improve its collective strength through such experiences.
One thing I would like to add is that, when we work with people in other companies, we have no intention to take the trouble to “cultivate” them. I think it is more important to understand how we can both grow, or to find a good balance which can enhance each party’s strengths and eliminate weaknesses.
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Q2. For the launches of the Wii U and other products, I am anticipating increased costs for their online services and others. How will you compensate for these costs? For example, do you have an idea of receiving a monthly fee from dues-paying members or increasing the price of packaged software?
A2. Iwata:
We plan to expand various network services for the Wii U. The first thing to do is connect the Wii U to a common large network platform called the Nintendo Network. Next, the Nintendo 3DS, which is now partially linked with the Nintendo Network, will be more deeply connected. Also, when we create a new platform in the future, we will have it connected to the Nintendo Network.
We have a wide variety of consumers, from the ones who enthusiastically play video games to those playing more casually, who are not always interested in them but try to play a game only when it has become a public topic or play it just during certain periods, like a year-end season and summer vacation. We therefore believe that services which ask our consumers to obtain paid memberships are not always the best. We cannot promise here that Nintendo will always provide you with online services free of charge no matter how deep the experiences are that it may provide, but at least we are not thinking of asking our consumers to pay money to just casually get access to our ordinary online services.
On the other hand, some of you attending here must naturally wonder if the company can afford to say such a thing when it is attempting to improve profitability. However, our aim is that network services will eventually contribute to our overall profits even if they are available for free. More specifically, network services will let you communicate with other people, visualize what they are interested in and tell you something you did not know. Haven’t you ever had an experience that one of your friends introduced you to a song or a movie and that you regret not watching the movies by a certain director or listening to the songs by a certain artist in your life until then? If we are not aware of them, they are virtually nonexistent to us. Exactly the same thing can be said about video games. In developing a network service called “Miiverse” available for the Wii U, we are pursuing how to amplify and transmit consumers’ empathy about a game. For example, when you see another user enjoying the same game you also play say, “I enjoyed another game like this and that too,” you might be interested in a game which otherwise would not be on your wish list at all. In other words, even if we will not directly get paid by such online services, they will help build the circumstance where consumers are more constantly playing games on our platforms, which will increase the sales potential of new games, or a consumer who has played two games a year would be inclined to try three or four games a year. In short, we expect that online services will contribute to our profits in the form of increasing the number of games to be sold for one platform. From an economic standpoint, with that as an objective, the company is considering the necessary and appropriate services.
Therefore, our answer to your question is that, while we are not considering asking our consumers to pay periodic subscription fees, we are going to make it so that more software can be sold through the services and that we are making preparations with the belief that results worthy of our investments can be achieved eventually.
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Q4. I would like to ask about Nintendo’s social communities for the Wii U and other future platforms. As many Nintendo games are oriented to families, moral issues associated with the network services in general may be more challenging, or, I anticipate such issues as small kids being exposed to negative comments and what are in fact fun games being introduced by others as uninteresting ones. How will you handle these issues?
A4. Iwata:
First, please let me elaborate on the social communities for the Wii U in your question. For the Wii U, we are developing a system where consumers exchange their impressions, opinions and senses of accomplishment about games they play with each other through the network functions I mentioned before. We announced it with the service name of “Miiverse” just before E3 this year.
On the other hand, it is true that there are people who behave very badly in the world of computer networks, even though they constitute a very small percentage of the network population. In a community where anonymity is protected, there are those who think that no one will be able to identify who they are no matter how rude they are, and these people sometimes engage in socially-prohibited comments or behaviors that could make other people feel hurt or uncomfortable. That is one point we need to consider. When I answered the previous question on the costs associated with network service operations, I was actually intending to include our determination in this field. Taking this opportunity, let me elaborate on this point further. Above all, how much energy we will pour into the actual operations of such services is going to be very important. More specifically, we have never thought that we would simply build up an environment where we could let our consumers exchange any and all comments freely. We have never intended to operate the service in that way. Everybody knows that there will always be a certain number of people who do not behave themselves in such a community. We have several plans and formats, including the elimination of comments from such people, and other ways to prevent children from being exposed to them. I am afraid I cannot tell you more about our protective measures because the fact is that if we disclose any details here, some might start thinking how to circumvent them to annoy Nintendo. Anyway, we will work steadily on this matter by spending sufficient energy and, if necessary, financial costs.
In addition, there have recently been negative campaigns on the Internet in which false opinions are deliberately posted to ruin the reputation of a product. Such vicious rumors are a big problem and could be considered business interference. On the other hand, however, it is very difficult to tell consumers’ real complaints from those that are posted as part of a negative campaign. If we were to delete anything negative about our games, it could constitute a suppression of free speech and you would not able to believe in even a good reputation. Luckily, those who are engaged just to be engaged in negative campaigns are in fact just a fraction of all users. Therefore, in a community in which a number of users with fair opinions exist, opinions posted just for the purpose of a negative campaign will be gradually overwhelmed by the majority of posts of fair impressions. Also, if a number of game players put a remark to indicate “I think this comment is inappropriate,” the subject comments will be seen as unreliable and thereby decreases their influence on other consumers. In that sense, in the world of the Internet, we cannot afford to always act on “the ethical doctrine that human nature is fundamentally good.” At the same time, however, we would like to believe in the possibility of “the wisdom of crowds,” which could create a very interesting and fascinating world, and make efforts for the services to realize it in one way or another.
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Q12. The Wii is the best-selling console and holds the top share among the video game consoles for now, but both in Japan and overseas for about these two years, the Wii has been sometimes excluded from what is called multiplatform software and some games have been released only for the PS3 and the Xbox 360. When the Wii U has entered a mature phase four or five years later, will it be able to compete with a next-generation console by Microsoft or personal computers? I am concerned about a future situation in which a game is available for consoles other than the Wii U due to a lack of power. Please let me know what efforts you have made to avoid it.
A12. Iwata:
We have not successfully kept the momentum of the Wii for about the last two years because third-party publishers have released a smaller number of game titles and Nintendo has also decreased new games for the platform in preparation for the launch of the Nintendo 3DS and the Wii U. As the Wii has no such system as the “Miiverse” in the Nintendo Network mentioned earlier today, in which consumers have a chance to encounter new games in communication with others, the momentum temporarily provoked by a new game has easily been diminished.
We cannot promise that the Wii U will never be excluded from multiplatform software for eternity, but we can at least assure you that the Wii U will not have such a big difference as the Wii had in comparison to how, on other platforms, developers could expect very different graphic capabilities of generating HD-applicable high-resolution graphics. Other companies might launch a next-generation console with more power, but we don’t necessarily think that the difference between the Wii U and such console will be as drastic as what you felt it was between the Wii and the other consoles because there will be fewer and fewer differentiators in graphics. Naturally some consumers are very sensitive about such a small difference in graphics so that we will make efforts to make the most of the performance of the Wii U to keep up with technological innovations and not to make the system out-of-date soon. However, as the structure of the product called the Wii U is as if we are including both a video game console and a handheld device, if we were not careful about how luxurious both of them were, we could end up having to offer the price of the two hardware systems combined, which would not be an acceptable price for the consumers. We had to design it by balancing the performance and the costs.
I am not sure this is an appropriate expression, but video game consoles have long been “parasites” of TV sets at home. In other words, game consoles have used TV sets in a family instead of being equipped with their own screen. However, the Wii U will be the first console free from TV sets, in which you can play the Wii U while someone else is watching TV or you yourself can watch TV while using the Wii U. As you can experience deeper entertainment with both the Wii U GamePad and the TV screen, we would like to enrich it but, at the same time, we hope to furnish it with games you can enjoy only with the Wii U GamePad. In addition, games on two screens are not just the same with what we did for the Nintendo DS. As the TV screen can be distant from the Wii U GamePad, not like the Nintendo 3DS, we can offer different options for use. Also, in multiplayer games, a player with the Wii U GamePad will play a different role from those with Wii Remote controllers. We are thinking of what we call “asymmetric game play,” in which players have different roles in one game, like in Tag. The player with the Wii U GamePad will be able to know what other players are doing when they are playing on the TV screen. The Wii U GamePad will work as a window where you can communicate with other players in their living rooms. We say that the Wii U GamePad could be a “Social Window,” or a window to link your living rooms to others’.
Furthermore, the Wii U can change the way you use the TV set in your living room, although the Wii U is a video game system in its nature and this is just an added component. More specifically, there are currently many videos on the Internet, many of which are very interesting and suitable for family entertainment. You have seen them by PC, smartphones or tablets, but with the Wii U you can search a good movie on the Wii U GamePad, tell everyone there to see it and easily move it to the TV screen. In this way, a video-sharing website can be a great form of entertainment. In addition, the Wii U can make it easier to use video-on-demand services, where you can enjoy films and TV programs through the Internet and which are more popular overseas than in Japan. Not only by competing with other platforms only in regard to the machines’ spec. figures but proposing various ways of using the Wii U, we would like to create a future so even family members who have never touched any video game systems will consider the Wii U something that is convenient to use so that we can maintain its competitiveness for a long time.
Also, something I think should be highlighted, it's part of answer 9:
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Finally, another issue is that the visibility of the future software lineup is unclear. During E3, titles for the overseas markets were highlighted and the titles we introduced then were only the ones to be available at the launch time and within the launch window period, which might make you wonder, “What will become of the software in the next year?” It is our intention to convey a strong message this fall with the information about the price and the launch date and then to create momentum good enough to convince our consumers to buy (the Wii U), but currently, there must be some concerns. Overall, we believe that the current share price has been determined based on what I mentioned today. In the near term, with the introduction of the Nintendo 3DS XL followed by new software titles in July and August, the most important issue is to what degree we can change the business momentum of the Nintendo 3DS in the world. Then, subsequently, when we launch the Wii U, we intend to announce the next step by saying what will happen in the future, and by doing this, we would like to change the evaluation in the market.
Pues yo me quedé con las ganas de una Wii verde pistacho (como una de las que presentaron al principio, y nunca llegó a salir).
