Nintendo's Road Ahead: Denise Kaigler Speaks

Denise Kaigler came to Nintendo of America a bit over a year ago to fill the void left by Perrin Kaplan, the company's long-time VP of corporate affairs. In the last year, the former Reebok exec has been schooled in the ins and outs of the game industry -- though she draws comparisons between the two industries, Kaigler seems to appreciate the differences as well. Conducted at last week's GDC after Nintendo president Satoru Iwata's keynote speech, the discussion with Gamasutra touches on both those announcements, Nintendo's identity issues with being both the fanboy favorite and casual market leader, and the problems developers and publishers have had finding success on its platforms, despite their broad user bases. With the refreshed Nintendo DSi hardware launching this week in Europe, Australia, and North America, following its successful introduction to Japan last year, there is plenty of good news for Nintendo. But any company, no matter how successful, can't rest on that success. Here, in an extended version of the interview excerpted on Gamasutra yesterday, Nintendo's Kaigler also discusses how that momentum can be maintained. What drew you to the video game industry originally? Denise Kaigler: Mr. Fils-Aime called me and said, "Hey, come. If you're interested, come talk to us about possibly coming to work for Nintendo." I was at Reebok. And I flew in to Seattle to sit with Reggie and several other Nintendo execs, and weeks later, they offered me the job. I said, "I can go work for Nintendo. I can go work in this video game industry. And more importantly, I can go work for Reggie Fils-Aime." Yeah. What is it with Reebok? [EA Sports president] Peter Moore came from Reebok. DK: He did. We're very good friends, yeah. We're very good friends. There are a lot of similarities, right? There just are. One is consumer products. But as far as the products, it ends there, right? They're shoes, which is not a very immersive, emotional experience or connection with the product. [laughs] But there are a lot of things that are exciting in both industries. I think that if I see a comparison between the industries, at least, it's that they're very competitive. DK: Very competitive, yes. And, there are those three key players, right? Same thing -- there's Nintendo, Microsoft, and Sony. And in the footwear industry, there's Nike, Adidas, and Reebok. So, that whole rivalry is kind of fun. And on the footwear side, there are the Michael Jordans, the Yao Mings, and the Allen Iversons, on the basketball side. In the video game industry, there's Mr. Miyamoto, Mr. Sakurai, and Mr. [Masato] Kuwahara. So, we still have these sort of gods within the industry that people attach themselves to, that they make emotional connections to. So, that's sort of a similarity as well. I mean, obviously, Nintendo has some of the best-known developers. Something that I found interesting, something that was discussed is the balance between the core audience, the passionate Nintendo fans, and the new audience that you're attracting with the Wii and the DS. And I was wondering if you could talk about that balance and why it's important to maintain it. DK: It is important. So, being able to offer exciting gameplay experiences to a broader group of consumers seems to be working, right? For everybody, the industry, certainly for Nintendo, but most of all, for consumers. We have certainly broken down that barrier, the intimidation factor in video games. And I know for me, because I am still new to this industry, I would consider myself an expanded audience member -- I was one of those people, even though when I say grew up, I was in college when Mario came out. I was one of those... When Mr. Iwata talked about VC Arcade and Space Invaders... Loved that game when I was in college. Addicted to that game. But still, there's that wall, though, between veteran gamers, experienced gamers, and people who never played games before. It's important that we break those barriers down so everybody can enjoy the fun of video games, everyone can escape what's happening out there, because there's a lot of stuff out there that we need to escape from. If we can do that, if we can deliver the same fun that core gamers like you sort of had for so long, we want to be able to let other people get into that fun. Why wouldn't we do that, right? And, what is important for Nintendo to do, which we are absolutely committed to doing, and this is how Mr. Iwata led into the announcement of Zelda DS, is we recognize that you guys are important, right? When I say "you guys", I'm saying core, right? I hope you're okay with that because I know you're a core gamer. Actually, I am. [laughs all around] I mean, let's face it. DK: I know that. We absolutely recognize that you guys are important to us. We know that. What we absolutely don't want is the misperception to continue that we don't care about you guys because we do. It's important that the core gaming community, rather than saying that we're abandoning the core, we're not. We're simply expanding the opportunities to include more than the core. So, the core is here. We haven't done this. [gestures, showing a closing gap] We've done this. [gestures to expand the gap] The core is still here, but we just brought in other gamers. That's all. And through the Wii and Nintendo DS, and now Nintendo DSi, we're able to continue to broaden that access to more and more gamers. And that has to benefit the core as well as expanded audience. What I have found to be the thread between all gamers, whether you consider yourself a veteran gamer or a new gamer, is your need to have something fun, something that's surprising, and something that you can't get any place else. And doesn't that define what Nintendo brings to the table? I think so. It seems like consumers think so. Do you agree with that? I would say frequently, yeah. Certainly, things like Wii Fit are surprising and disruptive. I mean, it's not the first exercise game, and it's not even the first exercise game with a peripheral, but it's the first successful exercise game. DK: And you know, because you don't even think you're exercising. And that was the inspiration behind it. Mr. Iwata talked about Mr. Miyamoto about how Wii Fit came to be. I heard him tell the story, and I can never get tired of hearing him tell the story. He found it fun to get on a scale and weigh himself. And next thing you know, his family was watching him, and everybody was getting excited whenever he lost a pound or two. So, he took that and made a game out of it. Who would have thought that weighing yourself would become a game that would go on to sell millions of copies. I mean, just based on the install base that was alluded to this morning, it was over 16 million -- over 15 or 16 million -- including the most recent sales. And it was hilarious... DK: The Wii Balance Board shocked everybody, didn't it? Yeah. DK: The comparison of all, and then you've got the Wii Balance Board. The PlayStation 3 next to the Balance Board was a little bit... DK: [Laughs] Certain people will not be thrilled of the comparison that's being made. DK: It is what it is. Sure. And, sure, there has been some tension between maybe the core gamers, who have been a little unsure of the brave new world of Nintendo... DK: It's not so new anymore. True. What I would like to know is, keeping that balance and being inclusive at Nintendo, in terms of your product mix, how has that been a challenge that you've addressed? How is that, being so inclusive? DK: Let me ask you, where do you fall in this? Do you believe that we're not offering enough games. Not games that only the core care about and not the expanded audience, but games that the core care of, even including those that also the expanded audiences can... I think that Nintendo is doing a fair job of it. I think that Wii Music became sort of a badge, a target. I think that game became a target because maybe that was the least approachable one to core gamers. I mean, things like Wii Sports, everyone I know likes; it's a fresh thing. But people have short memories. DK: I'm glad you brought up Wii Music. Wii Music is certainly a game that you actually have to experience to appreciate, and we underestimated that, but once people started playing it, then they understood it. There is a challenge component to that. It's competitive among the individual player because you always want to get better and better and better. Isn't that one of the threads that connects all core gamers, that competitiveness, whether you're competing against your best friend, your spouse, or your sibling -- or you're competing with yourself? That game was all about, actually, both. How good can you be at putting your own jam together, rocking the marimba or playing the violin, whatever it is? How great can you be at that? And you're going to want to keep getting better and better. And you can share that with your friends and family. So, Wii Music is a good example of that because of those core attributes of the competitiveness of it, that I think is appealing or can be appealing to a core gamer when they try it out. It also brings up something interesting. You said that it's hard for people to understand that game. I think one of the challenges that you must face with an expanded audience or just in general with marketing to these people, who are probably a little more hesitant and probably not as willing to throw down $50 on the barrelhead as frequently as your enthusiast audience. DK: Absolutely. That hands-on experience. This isn't just games, this is just in general, right? Products, consumer products. The more we, as companies, can offer hands-on experience to our products, the better. In the case of Wii Music, absolutely. We are seeing that the more we give consumers an opportunity to try it out, we're seeing there is a connection. There's sort of this light bulb moment. "Hey, wow, this is cool. I can jam with this." Or, "This is different. I didn't expect to have this much fun with it." We have taken that game, we have done some fun work with the game, and we, as I've said, we've seen some good results by it. We are hopeful that Wii Music will continue to connect to more and more consumers, that evergreen. Who knows? That long tail. Who knows? But in general, for the platform, I think that probably the Wii is something that spreads virally between people. You know, you go over someone's house... DK: Wii parties! It's huge, Wii parties. Right. So, is there something that you can engender from your direction, or do you have to rely on the grass roots approach? Because at some point, that might break down, especially if your titles aren't quite as simple to approach conceptually. DK: We are so appreciative that consumers are continuing to find that game, and that platform. I'm sure you see the NPD numbers. I'm sure you're one of the folks who gets it every month. Yeah, that's the thing, right, because it's experiential. It's something that people come to understand... That's a challenge, I would think. DK: Well, we have 50 million! Sure. Right, but not necessarily a ceiling on the Wii platform, though there probably is one. It's not just the Wii platform; you have to sell games, and you have to sell concepts to this audience who's not as used to those methods. The enthusiast audience is going to go seek out information. Of course, marketing is relevant, but they're engaged and they're going to go for it. What about your more general audience? DK: It's certainly not up to us to make that decision, right? It's up to the consumer. The consumer is going to decide at what point -- When you said, is it going to end at some point? It's not up to us. The consumer makes that decision. At what point, is it up to us to make sure that we continue to give consumers what they need? That never ends. We are always committed to making sure that we are. So, we have the Wii platform. It's up to us to make sure that we're constantly designing, delivering, creating, and giving consumers fun experiences with our games. As long as we can do that, then we're hopeful that consumers will continue to go out and buy our products. But Mr. Iwata said it today -- we have to continue to do that. We know that it's up to us to do it. Under Mr. Miyamoto's direction as far as game development, and certainly under Mr. Iwata direction as the head of the company, we're committed to doing that. But it's up to the consumer to decide. We're going to keep working what they want, both the core and the expanded audience. We're going to continue to give them what they want. Something, to change track, that Mr. Iwata alluded to in the speech was Nintendo holding back... There's been concern, especially on the part of third-party developers, that it's hard to compete against Nintendo games. He addressed that very directly. And he talked about Nintendo potentially holding back on releases to give the market to breathe for other titles. Is that a tack you're taking right now? DK: You saw the install base. We have a 100 million DS worldwide install base with 50 million shipped Wiis. That's an incredible silver platter that we're handing to the development community. Have at it. Here you are. We're giving you, between Wii and DS, a 150 million install base. We want the development community to design and develop into that install base. The reason Mr. Iwata wanted to come here and speak as a developer is to say, "Guys, we want to help you develop games that, so far, on our experience, sell on our platforms." For him to methodically impart to the development community what Mr. Miyamoto's development philosophy is, we're hopeful that the development community will take that, go back to their offices, their teams, download the teams who weren't here, "Okay, guys, we got this sort of step-by-step guide on what to do." Now it's up to them to do it. We've handed the development community, we think, 150 between Wii and DS install base, and having Mr. Iwata himself say, "Guys, here is what, from my experience, will help you develop games that will succeed on our platform." I don't know what else it is that he can do. You make a profit on every game that's sold, whether it's first-party or third-party. But beyond that, why do you need third-party developers to be encouraged to work on the platform? DK: Because the industry needs it. Consumers need it. The more creativity we have... The more creative minds and teams and people there are developing games for any of our platforms, the consumers are going to be the better for it, right? The industry is going to be the better for it. We can't do it all, and we don't want to do it all. We're saying, "Here, we have the Nintendo DSi. We've got the camera application. We've got the DSi Sound application. Take this, and let your imagination go crazy. We're giving you these features that you can actually now..." You saw with WarioWare Snapped -- take this camera feature and make that an immersive gameplay experience. That doesn't happen -- that experience isn't anywhere else. So, we're giving the development community, "Here you go. Take this and give the consumers something that they would love more out of." So, does it benefit? It benefits Nintendo, it benefits the industry, it benefits consumers. We need the development community to support our platform, and we recognize that. Obviously, the DSi adds new features, and they're exciting, but are you worried about going into the market at a price premium over the Lite, especially with the economy the way it is? DK: We believe that consumers will recognize the value of the DSi. The reason is because of what I said. The features in this game are unlike any other platform that's out there. You're going to be able to get hours and hours and hours of gameplay out of the DSi. From taking it and just yourself, certainly making it and customizing it to however you want to interact with it, when you take your pictures of your family, you build your slideshow with your photos, you've got your music on here. So, that's one thing. Then you take it, you go to a party, you show it to your friends, you have your friends also play around with it, you share the experience with it. You saw Bill [Trinen] with Snapped. How much fun was that? You could never get tired of that. So, to have that type of experience in a system like this, add on DSiWare, this has endless hours of gameplay fun. So, we're hopeful. I mean, you heard Mr. Iwata, it's the fastest-selling video game system on Amazon ever. Pre-sales at GameStop are higher than DS Lite. So, so far, consumers are responding. It's not even out yet. So far, the pre-sales have been really, really strong, so we're pleased with that. And you heard about Mr. Iwata talking about sales already in Japan. We have sales already in Japan. So, we're feeling good. Most people [on gamer sites] are saying they're going to get one. Most of the core gaming community are absolutely saying they can't wait. A lot of them have already pre-bought it. I've seen that. They've gone on and gotten it, and they can't wait to get it. So, based on that, are you thinking people are going to be shy of the higher price point?