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Iwata, Miyamoto Discuss Wii, NDS, More 2

Nintendo of Japan has made available the full transcript of the firm's Corporate Management Policy Briefing, during which company president Satoru Iwata and other senior ...

Jason Dobson, Blogger

June 20, 2006

5 Min Read

Nintendo of Japan has made available the full transcript of the firm's Corporate Management Policy Briefing, during which company president Satoru Iwata and other senior Nintendo execs responded to questions regarding Nintendo's upcoming Wii console, the overwhelming demand for the Nintendo DS platform, and disappointing sales of the Game Boy Micro. In comparing the initial launch and sales of the GameCube with what Nintendo expects of the Wii, Iwata stated: “When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down.” He continued: “To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” Developer Shigeru Miyamoto, who noted that he is working on a secret project that will be announced within the next six months, also chimed in with regards to development resources, stating: “While I feel that we need more internal software development resources at Nintendo, we have not increased the number greatly. When we combine the total number of people working for Nintendo's first-party and second-party titles, however, there are far more than 1,500 people working on the titles today.” Regarding software prices, specifically concerning the trend of software being introduced at a higher price, but then dropping to a much lower price in the months to follow, Iwata noted that this is an “unhealthy product cycle.” He commented: “We believe that each software should have its own price point depending on its volume, theme, contents or energies and time spent for the development, namely, the development costs...once the suggested retail price is announced, we should stick to it.” He added: “Of course, we should be flexible. If the software was first introduced 5 or 10 years ago, we don't need to stick to the original price. However, if the suggested retail price of any and all software is marked down in 6 months or 9 months, the customers will learn the cycle and wait for the discounting, which will simply aggravate the decreasing sales of new software.” Concerning how the Wii will be positioned in competition with console offerings from both Sony and Microsoft, Iwata noted: “As long as the home console business is concerned, Nintendo has been a challenger during the past 10 years. Our priority is to determine the strategy from the challenger's perspective on how we market Wii to make it the best-selling machine.” In describing the thought behind the Wii's unique name, Iwata commented: “I am one of the people who have decided this final product name. Of course, I am not the only person to make this decision, but I have never thought that it was a mistake to name it, "Wii." I understand that a great many people have already accepted this product name. When someone has some hesitation today, we'd like to make efforts so that they will come to like this name in the end.” Turning to the Nintendo DS, Iwata was asked the reasons behind the shortage of the DS Lite units in Japan, to which he responded: “A major issue we faced was that we could not achieve the expected level of the yield ratio with the bi-color molding. We could have made a lot more DS Lite if we had had compromised on the quality level, but we have never wanted to do so. We do not want to compromise on the quality level of our commodities. Because we wanted to market only the commodities that we could be satisfied with, the initial shipments were limited.” Similarly regarding the upcoming launch of the Wii, he then confirmed that while there will be no way to overcome the demand of early adapters for the new hardware, the company nonetheless expects to “ship 6 million Wii hardware during this fiscal year and, among them, we are intending to ship 4 million or more by the end of this calendar year...” Iwata added: “If we can ship this number and if no product shortage will be experienced anywhere in the world, it can be regarded as a failure for a new game machine's launch. In other words, we will be making efforts to keep the constant shipment to the markets so that severe shortage situation will not go on for a long time.” Concerning the disappointing cumulative sales of the Game Boy Micro, Iwata stated: “The sales of Micro did not meet our expectations. Micro showed different sales in and outside Japan. In Japan, initial sales of Micro were rather good and it did become a rather hot topic. So, there was the possibility for this product to grow in Japan. However, toward the end of 2005, Nintendo had to focus almost all of our energies on the marketing of DS, which must have deprived the Micro of its momentum. This is why Micro couldn't meet our expectations in Japan.” He added that “overseas, we were unable to dispatch the real attractive nature of this product in the first place,” and that “the actual consumers had to evaluate Micro without touching them. In the end, we failed to explain to consumers its unique value and they concluded that Micro is not worth the price they have to invest.” Finally, touching on the controversial topic of the Wii's fundamental power when compared to that of other consoles such as the PlayStation 3 and Xbox 360, Miyamoto replied back, stating: “What we are trying to do is to create brand new freestyle entertainment that can be enjoyed by all the family members as well as by a single player. In making such entertainment, I have never felt stress about the power of Wii. Honestly, I have not been able to use 100% of GameCube's power yet, so I am very happy with Wii's far superior functionality.” The full four-page transcript, including plenty more details, can be read at Nintendo's corporate website.

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