For the record, current financial years is ending 31. March and new financial year is from 1. April 2016 - 31. March 2017.
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With regards to the financial performance, I believe you said that the fiscal year ending in March 2016 has been about balancing revenue and expenses, while the next fiscal year (ending in March 2017) will be a step towards aiming for Nintendo-like profits. Have these priorities changed at all? It seems like a lot of new endeavors, such as smart device business and amiibo sales, will need to go smoothly in order to realize Nintendo-like profits. If you had to provide one example of an area where you can be sure to achieve Nintendo-like profits, what would that be?
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Kimishima: The previous and current fiscal years have been a period of preparation to launch a number of new endeavors, such as NX development, development for smart devices and business using our character IP, in addition to driving our Wii U and Nintendo 3DS businesses. At the same time, it has been our priority to take a close look at areas of our existing business where the revenue and expenses had become unbalanced, and to make sure that we corrected this balance. As I have said before, we will be launching many of our new business activities as we move from this fiscal year into the next. When you start any new business, it is important to make the public aware of what you will be doing. In the next fiscal year, we will have to make preparations and investments to achieve these goals, and that comes with certain costs. The question was to pick one area with which we will be able to achieve Nintendo-like profits, but I would like to suggest two areas. One area is our NX business, and another is our business for smart devices. I believe that keeping these two endeavors on track will be key to achieving Nintendo-like profits. I don't have any further details to share about the next fiscal year at this time, but we will explain about our plan and when we will aim to achieve Nintendo-like profits at a future date. |
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Nintendo has been working to restore balance between revenue and expenses and has announced a number of new ventures during this and last fiscal years in order to realize Nintendo-like profits from next fiscal year on. How would you evaluate your current progress on your plans, such as reorganization and business partnerships? What areas need improvement in the future? |
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Kimishima: We have made a number of changes to our corporate structure to gear up for our new ventures. For example, (as I have described before,) where development was split between handheld and home console divisions in the past, we have unified these activities for both hardware and software development, and the exciting new ideas coming from development are evidence of the progress being made as a result of that unification. We are also making steady progress in working with our partners in a variety of businesses. Of course, gaps in communication that may arise from reorganization could hinder plans that require timely execution. This is why our Corporate Planning Department is also implementing organizational reform that allows for precise understanding of progress across the whole company. The General Manager of the Corporate Planning Department has a lead role in this project. To achieve Nintendo-like profits, one important factor will be establishing a solid launch for our NX and smart device businesses. I believe the key to doing this is to allocate our resources appropriately to proceed with hardware and software development on schedule and deliver our products to our consumers in a timely manner. |
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In the next fiscal year, I understand that some up-front costs will be incurred, particularly in the first half of the fiscal year, as you will invest in new businesses before their actual execution. Could we estimate that the new businesses will contribute to the overall profits for the full fiscal year? If that is the case, should we expect that new businesses will drive results in the next fiscal year? On the other hand, I believe that you will have results from the holiday season and you are able to see the pipeline for the next fiscal year. Do you expect that the existing Nintendo 3DS and Wii U businesses will continue to contribute to profits, for example through sales of current titles? Please share whatever you can about where you expect to see profits over the next fiscal year. |
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Kimishima: First, I'll address Nintendo 3DS and Wii U. As I described in the presentation today, Nintendo 3DS has sold over 20 million hardware units in Japan and over 54 million units globally. This presents an excellent chance to increase revenue through software sales in the Nintendo 3DS business. We presented a number of titles today that show what kind of software can drive our business. We have not yet announced all of the Nintendo 3DS software for the next fiscal year, but we are proceeding with development, including major titles. The Nintendo 3DS will continue to be a major pillar of our business in the coming fiscal year. As for the Wii U, we have just passed 10 million units worldwide, so it is not quite on the level of the Nintendo 3DS. However, we have received a great response for titles such as Splatoon and Super Mario Maker, and we would like to continue to release titles we expect to be received positively in the next fiscal year. As for new businesses, we will present further information when we go into details about our forecasts for the next fiscal year. We do not plan to speak about NX today. We continue development and planning efforts for NX in preparation for launch, so it will require additional investment. Our expansion into smart device applications will depend on what kind of response we get from consumers. We will also be licensing our IP to partners for other business opportunities. We believe these endeavors are important to spreading awareness of our IP among consumers, but we do not expect that they will drive a major share of our business immediately. That's all I can share about the next fiscal year at this time. |
https://www.nintendo.co.jp/ir/en/library/events/160203qa/index.html
