During a Q&A session at Nintendo's Tokyo earnings report on Friday, Nintendo CEO Satoru Iwata shared some details on Nintendo's plans for digital downloads.

One investor asked Iwata about his thoughts on paid download content. Nintendo is currently preparing a paid item transaction system for both 3DS and Wii U, Iwata revealed. For 3DS, this will be available to developers by the end of the year.

Nintendo may not end up using this system for itself, though. Later in his response, Iwata said that while pursuing paid download content opportunities would likely increase short term profits, it would not allow them to build along term relationship with customers. Therefor, Nintendo feels that it should not have this type of paid charge system for its own content.

Iwata denied that he is critical in general of the concept of paid downloads. He did, however, question the concept of free-to-play games, where you start playing the game for free and are charged for item purchases. He feels that this type of system would damage the premium value Nintendo's content.

On the topic of digital downloads in general, Iwata noted that the 3DS internet connection rate is far beyond that of the DS. However, it's still not at the one hundred percent satisfaction level, and furthermore, only a fraction of those people actually download paid content.

He hopes that over the next three years, Nintendo will make the Nintendo e-Shop, the online shop that's accessible from the 3DS, into a larger presence. His hope is that digital business will see a great increase, more drastic than an increase in 5 or 10 percent over current levels. He also hopes to create a future where players will pay for digital content just like normal with no reservations. This will be a major point for Nintendo over the next three years, said Iwata.

Iwata stressed that the greater presence of digital sales does not mean that package software will go away. Rather, he wants to establish the digital business as another pillar.

CORRECTION 8/1: A previous version of this story miswrote that Iwata had said the e-Shop has a 5% usage rate. Iwata did not make any comment about the e-Shops's current usage rate, but only said that Nintendo hopes that over the next three years digital business has a dramatic increase over current levels. EDIT: Additionally, Iwata's comments about Nintendo not doing paid download content was in reference to certain types of low quality content. He did not rule out Nintendo releasing paid download content in general, and even expressed interest in this area.