Iwata on GDC and Wii successor announcement timing:

"First of all, regarding my presentation at GDC, we have posted my entire keynote speech on our websites, but I am very disappointed with one thing.

Many reports said that I talked about a conflict between the quantity and the quality of video games, which made me think that reporters should have at least written an article after reading through the full text of the presentation since we have posted the Japanese translations of the entire keynote speech. I have never mentioned the conflict between quantity and quality at all. Some articles based on this misperception even said, "Nintendo hard hit by video games for smartphones and social games, and criticized them as low quality" but, again, I have never said such a thing at all. The only message that I had hoped to convey at GDC was, since my keynote speech was dedicated to the game developers, that, without carefully trying to preserve the value of the games we develop, the digital distribution revolution could very easily depreciate their value, which might make all of us have a hard time.

Naturally there are both high-quality games and low-quality games in the traditional video game business that we have long engaged in. It is obvious that some games are fun and others are boring. As there is no accounting for tastes, I cannot say that all of the games Nintendo has released are definitely considered to be high-quality to everyone, and nor did I intend to refer to the quality of games by other developers. At the same time, however, I am reflecting on how I made my presentation, which was eventually summarized by some as if I had argued a conflict between quantity and quality.

What I wanted to argue most was that video game developers need to be careful about "preserving the value of video games" so that the video game industry, regarded as valuable by many people, can be sustainable. This is the message I was eager to deliver. Since GDC is a place for developers who create games, I dared to do that there even though there was a chance that some people might have a misunderstanding.

I sincerely hope that you will read my presentation on the website again and understand that it is a story about how to preserve the value of video games, not about a conflict between quantity and quality of video games.

Next I would like to tell you why we announced Wii's successor system at this time, not at GDC. Naturally, the earlier we announce a new system, the more speculation will be encouraged and there will be a higher risk of information leakage from those who are working cooperatively on it outside Nintendo. In addition, a lot of people interested in our next move might be less amazed at E3 if we disclose too much information in advance.

At the same time, however, if we make a totally surprising announcement at E3 on the spot, which would be an effective way to astonish people, some busy people might say, "Oh, Nintendo is a mischievous company. I could have visited E3 if I was informed of the announcement in advance." We decided to make the announcement at this time because now is our last opportunity to inform people so that they can arrange their travel schedule for E3. - Satoru Iwata"



Iwata on the Earthquake imapct, future third party environment:

"First, I would like to comment on the issue of the supply chain. We have most of our production based abroad. Also, we are manufacturing some software in Japan, but the locations are far from the affected area, so none of our production bases were directly affected. However, in today’s world, products are being produced by assembling a number of different component parts and materials, so it is impossible to not have any effect on a supply chain.

However, we believe we have taken measures so that there will be no impacts to our current production plans. We have come up with our plan with the premise that, as long as there will not be any further negative development in the situation, the Great Earthquake will not have a serious effect on our product supply. The reason why we have a conservative view for the first half of this fiscal year is because we are taking into regard the current Japanese market sentiment, the situation of the launch of Nintendo 3DS, the software we can propose and the estimated length of time needed for the value of Nintendo 3DS to be understood by and spread to the consumers, which took more than a year for Nintendo DS. These factors made us think that we could not be too optimistic in the first half of this fiscal year, but the supply chain issue didn't have any effect on our plans.

I would not use the term "draw in" third parties, but I hope we can create a market that is attractive to third parties. The end result might turn out to be the situation you call "drawing them in," but I do not use such words as "draw in" or "enclosure," as I do not like such expressions. - Satoru Iwata

Iwata on Kinect's impact, Nintendo not capable of working alone, graphics affecting sales:

"I think the image of Microsoft's Xbox 360 is largely different between Japanese citizens and U.S. citizens. I think I can say that the Xbox 360 business has been in a good condition since last summer. On the other hand, when we talk about whether Kinect contributed to significantly expanding the number of Xbox users, as I have previously shown you the data on the graph, the number of Wii users has grown to about 10 million, but the growth in the number of Microsoft users is much smaller. Therefore, we feel that it would be rather unusual if Nintendo's Wii market was taken over by the launch of Kinect, or if the users who were playing with Wii quit playing with it and started to play with other consoles. Of course, many users in the U.S. have multiple consoles at their homes. Many Wii users also have Xbox 360 and vice versa, so I am not saying that there is completely no effect in terms of use rate. However, hit titles are not being released continually every month for Kinect software, so we don't believe Wii sales are being seriously affected.

Next, regarding the subject of overseas, there was an era in the past, which was until the time of PlayStation 2, when games made in Japan sold well all over the world. However, I think that, over the past three or four years, the presence of Japanese software developers has become relatively small. Nintendo is doing what overseas software developers do not do, so Nintendo's software is selling relatively well also in foreign countries, but for the software oriented to enthusiastic game players, such as "Call of Duty," the ones created by overseas developers are more mainstream in the overseas markets. In addition, because the expressions in games are becoming more and more photo-realistic, I imagine that the cultural differences in acceptance have started to be reflected more clearly. I think this is the reason why western users tend to prefer software created overseas than software from Japanese software developers.< Of course, Nintendo will continue to run a business by creating Nintendo-like games, but we will not be able to meet the various tastes of consumers by only doing this, so I feel that it will become necessary to reinforce the development resources in the foreign countries. Therefore, I hope we will be able to show you something like that at E3. - Satoru Iwata"

Iwata on why they don't reveal specific release dates for their SW, talks Vitality sensor:

"First, I would like to comment on the titles for Nintendo 3DS. If any one of the titles you mentioned "Animal Crossing," "Mario Kart" or "Super Mario,") right now is not released within this fiscal year, I do not believe that we will sell 16 million units of Nintendo 3DS hardware this fiscal year. Therefore, I cannot tell if all of them will be released in the current fiscal year, but at least some of these anticipated titles will be launched in this fiscal year. On the other hand, the reason why we have not yet set the launch dates is not only because of our development status, but to create an environment in which third-party titles will also sell well, which is the aim we set when we announced Nintendo 3DS. If we fail to create such an environment, we will not be able to maintain the momentum of the platform continuously. We don't believe Nintendo can do everything by itself. Of course, we are strongly aware of the fact that Nintendo's titles are obliged to drive the sales of the hardware, but we are not as arrogant as to think that Nintendo can maintain the market on its own. We want the other companies to be successful. In order to accomplish this goal, we would like to decide on the dates after we know the release plans of other companies' games so that we are able to consider how we can maximize the sales of our titles without affecting the sales of other companies in the short term. However, especially for the two titles I introduced today, which are the new iterations of "Mario Kart" and "Super Mario," I did not talk about them with the image of launching them in the next fiscal year or thereafter, so please understand it in that way.

Also, concerning Wii Vitality Sensor, I imagine that you are worried about that because it hasn't been put on the market even though a long time has passed since it was initially announced. This is a totally new type of entertainment, and there are large individual differences in the biological information of humans. For example, if it was acceptable that only 80% of the users thought the result was natural, then we could propose this to consumers right now. However, we are aiming for a level of quality in which 99% of consumers feel comfortable, and that is why this project is taking time to complete. I feel that this project has a lot of interesting potential, and we would like to continue this project without giving up, but it is difficult to overcome this hurdle, so please understand that now I cannot clearly say when we will be ready to put this on the market. - Satoru Iwata"

Iwata on internal game developing, online implementation conflicts:

"The policy "Jimae-shugi" (doing things by one's bootstraps) you mentioned has two aspects: it is a great honor to succeed in a business by making the best use of our own unique strengths, but on the other hand, it is a shame to fall behind the times clinging to it. I believe that it is the key to Nintendo, which develops both hardware and software in-house, to create new experiences which have been neither enjoyed nor requested by consumers, and let them say, "This is the very thing I have been wanting to play" once they have actually tried it. The more we depend on outside resources for this point, the more strength Nintendo will lose. It is vital for Nintendo to reinforce this point and cultivate developers inside the company. I hope that Nintendo is continuously considered as a company which is particularly good at such a thing, and I will make efforts for this.

On the other hand, it is not true that Nintendo is able to internally develop everything and keep up with the current pace of change. In fact, some of the software titles published by Nintendo are developed by outside developing companies, called "second-party developers" in this industry. There are already a lot of companies which receive various advice from Nintendo in the process of software development and whose products are sold under the brand of Nintendo, and for instance, I was working for one of such companies, HAL Laboratory, Inc., which developed "Kirby's Dream Land" and "Super Smash Bros." Considering the existence of such companies, Nintendo is not totally based on the policy "Jimae-shugi."

In slight connection with the question about Wii's concept before, honestly speaking, Wii's future could have been different if Nintendo had made better partnerships with outside companies in the field of network services at the early stages of the penetration of Wii. In other words, Nintendo might have been a little obsessed with the policy "Jimae-shugi" at that time. Although we have already put ourselves back on track, we would like to clearly differentiate what is our true strength from what we can basically do by ourselves but can be done better by more skillful outside specialists in order not to fall into that trap again. You may be aware of some features which I am implying now in relation to the future developments of Nintendo 3DS and Wii's successor system that we announced yesterday. I am sorry I cannot say anything more specific today. - Satoru Iwata"

Iwata on trying to change the relationship between TV and Internet on the Wii and how they struggle:

"This is a chart, which I occasionally show in the Briefings, which shows the average "number of users per household for each game system," which is a very important barometer for us each time we conduct our gaming population research. I have mentioned this repeatedly, but a value above 3.0 is extremely unique. This is because the average includes people living alone and, unless there is a situation where everyone in the family in most of the families is playing a certain system, it is unlikely that the value will exceed 3.0. In that meaning, from the viewpoint that we were able to make a situation where family members think "Wii is not something that is not for me," Wii has produced results following its original concept.

For your information, when Nintendo DS was at its healthiest in Japan, even the value for Nintendo DS reached 3.0, and for a handheld device, I think this is extraordinary, but now even the numbers for Wii are a bit on the downside from its best, and this is one of our challenges. More specifically, consumers were playing Wii once, but have not played it continuously. Although we had an increase in the number of users in the U.S., there was a small decline in the numbers in Japan. We had continuous growth in the number of Wii users, but we are now seeing a downward turn. In other words, we are not making a situation where users are continuing to play after their first experience. This is a big challenge we are facing.

Also for "Changing the relationship with television" or "Changing the relationship with the Internet," we have made several attempts, but as of today, I do not think we have come to a point where we feel we have gained a definite response. Surely, there are many consumers who say, "I have never done anything like this before" or "This is my first time to experience anything like this," and therefore, I do not intend to say that every attempt we executed was a mistake. In fact, we have made several attempts that no one has ever done before and I think we were able to make movement; however, in our scenario, we wanted more and more growth with an increasing number of people using it, and we wanted to have people keep on using it, but we fell short of this goal. In particular with Wii, for example, the challenge with start-up time when changing channels, or the current situation where we cannot automatically turn on Wii, turn on the television and change the input mode in the event that Wii receives a message, have led to challenges where we had difficulty having the users use Wii in the way we had intended. I don't think that the concept was a mistake, but I think that Wii has yet to fulfill these concepts. - Satoru Iwata"

+1 It was a very interesting and enlightening post.

"preserving the value of video games" so that the video game industry, regarded as valuable by many people, can be sustainable

beautiful

this why i fear a industry if western developers took over... i dont think they get this at all

he has my support

 Iwata is a really smart person and very humble too, is funny how nintendo being the game company with more years in the market doesnt believe they know all about the gaming market, they are always researching and trying to improve what they did wrong every gen...

Superb. Thank you for sharing. 

Perhaps the Malstrom fanatics and other 'critics' of Iwata should read what he says more carefully. The guy knows his stuff.

Iwata is awesome as usual, :D.

Really they already have been collaborating outside on their network technologies. WiFi Connection runs entirely on GameSpy tech

As usual Iwata is awesome

I really like the way he speaks about everyone with respect and always in a humble way

This is another reason I'm such a big Nintendo supporter. Iwata is such a straight forward and intelligent man, who can say his piece without falling into any of the snarky bitting  comments that certain other companies executives seem to make all the time.

Very interesting post, thanks for putting up!

A very interesting read.