Forums - Nintendo Discussion - Nintendo's Corporate Management Policy Briefing, September 2020

While not providing much of anything new for those who are already in the know about Nintendo, it can't hurt to post an overview every now and then because the knowledge that VGC veterans take for granted is commonly little known among the overall gaming community on the internet and every now and then it happens that a new member signs up to this site. So I read through all 56 pages of this document...

https://www.nintendo.co.jp/ir/pdf/2020/200916e.pdf

...and extracted the most noteworthy points to write a summary myself. (The PDF isn't that wordy. Each page usually has an image followed by only one paragraph.)

1. Nintendo's Philosophy

Creation of unique products that result from integrated hardware-software entertainment. This is not like Sony or Microsoft build their consoles and view gaming, because their systems are much closer to PCs than traditional consoles and the hardware itself is not an integral part of their vision, hence why both companies move in a direction of gaming as a service, a.k.a. the cloud as final destination. So if anyone is scared of an eventual future that is all about cloud gaming, there's no reason to worry that Nintendo will go in that direction. The hardware being fundamental for their core philosophy means that anything that sounds even remotely like cloud isn't mentioned at all in their briefing.

2. Relationship Between Nintendo and Consumers

Nintendo's core strategy has changed from expanding the gaming population during the 2000s to expanding the number of people who have access to Nintendo IPs in the 2010s. (Critical observers will note that the former strategy only concerned the DS and Wii (2004-2011), followed by a gap of Nintendo acting confused and directionless (3DS and Wii U, 2011-2016) which then led to the creation of smartphone applications and Switch (2016 onwards).)

Anyway, Nintendo IP utilization includes the four major areas mobile, merchandise (including Nintendo-owned stores in New York and Tokyo), theme parks and visual content (like movies). All of those have fueled Nintendo's core business, the integrated hardware-software entertainment. Nintendo's seven self-published smartphone applications (so excluding Pokémon Go) have been downloaded 650 million times in total.

Nintendo's IP expansion philosophy is that the strength of Nintendo's IP is based on gaming experiences, so content for dedicated video game platforms will always have priority. (What I personally find a bit concerning here is that Nintendo puts huge emphasis on their characters when they are actually only pieces of the puzzle. Gamers love Nintendo IPs not just for their characters alone, but even moreso for the game universes and that's something that I hope to see spelled out that way by Nintendo someday.)

The total number of Nintendo accounts has exceeded 200 million. While steadily growing since the introduction of Switch, the Mario Kart Tour smartphone application caused strongly accelerated growth since summer 2019. Nintendo highlights four areas of the Nintendo account: Linking game systems and smart devices, play and purchase histories, parental controls and Nintendo Switch Online. The latter has exceeded 26 million paid subscribers, including members of a family subscription.

3. Future Outlook

Goodwill will continue to be a central part, so Nintendo products will be crafted with great care and responsibility. Nintendo will invest in new technologies which they consider to be able to become a source of fun, so Nintendo will not simply follow other companies or the latest technology trends. (Personal note: The second to last sentence in that part of Nintendo's briefing made me roll my eyes because I remember the Wii U all too well.)

The digital sales ratio of packaged software has seen a tremendous boost in fiscal Q1 (from ~30% to ~50%), but Nintendo notes that retailers opening stores again after the COVID lockdowns have brought down the ratio to pre-pandemic levels again. But the most important takeaway in this section is that 100% digital is not Nintendo's ultimate goal despite digital goods having higher profit margins. Nintendo aims to maximize the total number of games sold, so physical versions of games will still be a thing in the future. Yup, there are actually a lot of people who believe that gaming will be all-digital eventually.

The next Nintendo console is scheduled for the year 20XX, so brace yourself, because you'll be playing Switch at least until 2030. Otherwise Nintendo would have used 202X. Come on, you knew that I had to slip in a joke somewhere.

Summary

  • Maintain consumer trust across generations
  • Continue unique entertainment offerings through integrated hardware-software platforms
  • Expand Nintendo IP thoughtfully with focus on quality and individuality of each property
  • The value of entertainment lies in its uniqueness

No cloud. Physical games instead. Nintendo for life.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

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Really doesn't seem like they said anything especially noteworthy.



Mostly what I expected. Nothing that really surprised me here.

I'm happy to see that Nintendo still appreciates hardware, I want to see what new hardware ideas Nintendo has that could potentially be groundbreaking like Nintendo's been doing for nearly 40 years now. I love hardware and i dont want to go to a cloud gaming future. While i always believed Nintendo would be the least likely company to potentially move on to cloud gaming or leaving the hardware business, it makes me feel extra assured and relaxed that Nintendo themselves addressed this by stating they're not looking to leave the hardware business anytime soon and still have a ton of faith in the hardware business.
I think its smart Nintendo expands their IPs more outside of gaming since Nintendo has some of the most iconic and unique characters in the world, there's lots of potential to expand Nintendo using their popular IPs.

I also find it interesting how Furukawa mentioned they're going to continue their success with "new hardware" which may hint towards a Switch pro, or at least a new Switch revision in the future. Which I think is likely to happen, potentially as early as next year.

Nintendo seems to continue its blue ocean strategy, which at this point I firmly believe it's the direction they should go. That strategy has proven to be by far the most successful strategy for not only Nintendo, but the industry in general. Ever since Satoru Iwata implemented this strategy Nintendo has seen new heights of success time and time again. There were definitely some mistakes like the Wii U, however for the most part its been wildly successful with the DS, Wii, Switch, and I guess the 3DS as well. If you think about it Nintendo doesn't really have direct competition anymore thanks to them creating their own path rather than following the trends of others.



The most interesting thing on this report is how they acknowledge their success during DS and Wii era stating they build a strong public relationship since then

While completely ignored their history before 2004 as if NES, SNES and Game Boy were never a thing, or at least not saying those consumers as fundamental part of their current customers and userbase

It's kinda like if we had 2 Nintendos, a Nintendo before and after DS and somewhat they think Switch users are mostly DS/Wii users, or at least more alike DS/WI users than older systems


I actually don't know if I like the idea of their IPs beginning to be multimedia products. From commercial point of view is the best thing they can do, just look at the monster multi media franchise Pokemon has become. I don't know a single soul who can't recognize Pikachu, must be by far the most famous fiction character in the world (well, unless you see Jesus as fictional)

However this multimedia status gave Pokemon franchise a very tight calendar to work on, when everything in the games is heavily attached with a whopping number of products from anime series, to movies, to merchan, toys and whatnot and since game business is not even the majority of profit Pokemon got why put any effort in the games in first place? Game Freak will probably never increase their unbelievably low number os employees working in each mainline title, they don't need to, they are comfortable with their current production

Let's just hope it's not the future for other IPs



IcaroRibeiro said:

The most interesting thing on this report is how they acknowledge their success during DS and Wii era stating they build a strong public relationship since then

While completely ignored their history before 2004 as if NES, SNES and Game Boy were never a thing, or at least not saying those consumers as fundamental part of their current customers and userbase

It's kinda like if we had 2 Nintendos, a Nintendo before and after DS and somewhat they think Switch users are mostly DS/Wii users, or at least more alike DS/WI users than older systems


I actually don't know if I like the idea of their IPs beginning to be multimedia products. From commercial point of view is the best thing they can do, just look at the monster multi media franchise Pokemon has become. I don't know a single soul who can't recognize Pikachu, must be by far the most famous fiction character in the world (well, unless you see Jesus as fictional)

However this multimedia status gave Pokemon franchise a very tight calendar to work on, when everything in the games is heavily attached with a whopping number of products from anime series, to movies, to merchan, toys and whatnot and since game business is not even the majority of profit Pokemon got why put any effort in the games in first place? Game Freak will probably never increase their unbelievably low number os employees working in each mainline title, they don't need to, they are comfortable with their current production

Let's just hope it's not the future for other IPs

Sounds like you skimmed the PDF. They didn't talk about their overall strategy prior to the 2000s because under the reins of Hiroshi Yamauchi they weren't open about these things to the same degree. However, they fully acknowledged their consumers from before the 2000s, talking about how they've become adults, then parents and even grandparents by now. Hence the "maintain consumer trust across generations." Besides, NES, SNES, GB, Wii and DS users are a lot alike, so Nintendo's oldest fans don't need to feel slighted to begin with.

Your concern regarding IP use outside of video games is much the same. Nothing in the PDF hints at IP exploitation and overuse, rather it's the exact opposite.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club