Dante Posted February 5, 2009 Posted February 5, 2009 Iwata: On the video game software business in the current economy: For sometime now, I have repeatedly said that the game business is comparatively less susceptible to the changes in the economy but the gap between what sells and what doesn’t sell become obvious (in an economic downturn.) The products that are listed at the top of a consumers’ wish list can sell at the same level in a good economic time as during a bad economy. But those ranked #5 or #10 on the list become the receiving end of the impact of the changing economies. As a result, I am pretty certain that there must be software that our third parties have prepared to sell, which did not live up to their original expectations. The rather conservative impression Nintendo received during our preliminary meetings with software publishers must have reflected such background (as software publishers are making a purchase order plan based upon the intentions of their distributors and retailers as well as by taking into considerations the situations surrounding the distributors.) When we analyze the Japanese market, for example, and look at the top 100 best selling software in 2008, last year’s sales of the top 5 software were even more than that of a year ago, but other software around the middle of the list showed significant sales decreases on a year-on-year basis, which attests to our point that the gap between what sells and what doesn’t is widening. On the appeal of Wii Music : I agree that Wii Music, as of now, has not achieved its true potential. On the other hand, I feel that “Wii Music” is a software that elicits largely two extremely different reaction from consumers. There are people who highly appreciate it and those who do not appreciate it at all. Usually for other software, if there is a fair amount of people who evaluate the software positively, the appreciation level of that software becomes slightly skewed toward a positive note, but on the other hand, if a number of people evaluate it poorly, the overall reaction to the software is bad. For “Wii Music,” the impression seems to completely depend on each individual player. It is unfortunate that “Wii Music” was not immediately appealing enough to some consumers, but it simply might have not been the right game for them. However, I would like you to recall the case of “Brain Training” software. Nintendo launched the first “Brain Training” software in May in Japan, and it was only around the time Nintendo launched “More Brain Training” at the end of the year, when the original “Brain Training” started to show explosive sales. Currently, I think that the appeal of “Wii Music” has not yet been fully conveyed and accepted by those who could be interested. We do not like to think that we failed with Wii Music nor that we should abandon sales support. If we had approached “Brain Training” with that mentality, the software would have not achieved the current sales situation. The first week unit sales of the original “Brain Training” in Japan was just around 45,000. We should not have the attitude that a game does not have sales potential because the first week or first month sales were small. On the other hand, the comment that it is difficult for a software to become popular unless it is easy to be understood is right on target. Something good can spread when a cycle is born where people who have hands-on experience can immediately understand its appeal, easily explain the positive experience they had to those around them, who then spread that information to the others. Nintendo was blessed with certain products that created this positive cycle, which has made Nintendo what it is today. In that sense, I feel like we need to reevaluate why the software (“Wii Music”) has not been able to clear that hurdle. On the home console market and the disappointing sales of Animal Crossing and Wii Music in Japan : Another thing I would like to explain is the home console market. Perhaps, the Japanese market is the least robust market in the world today with regard to home console systems. In the U.S., the home console market is very robust. If the U.S. sold two or three times as much as Japan, it would be tolerable. Yet, I feel that something is wrong when the U.S. is selling ten times as much as Japan on a weekly basis. So, I do not believe Nintendo should be content with the current situation in the Japanese market and believe that we have other methods to confront this. One thing I can tell you about this is that, compared to the past when home consoles were selling better in Japan, all the Japanese are getting busier for a number of reasons, so we are seeing an overall lifestyle shift where many forms of entertainment are enjoyed while on the go or during spare time. In these times, we need to provide the Japanese market with entertainment that only a home console can realize. At the end of last year, Nintendo launched two Wii titles, “Animal Crossing” and “Wii Music,” in hopes that the Japanese consumers would appreciate them and revitalize the Wii market in Japan. Our efforts have not lived up to our expectation. While Wii had very strong momentum in the overseas markets, the Wii market in Japan (during the year-end sales season) showed a slow start, did not show sharp trajectory in sales, and ended up moving back to the sales level of non-sales-season level quickly. Nintendo has always tried many unprecedented things. As we offer new proposals one after another, sometimes they are accepted just as we had expected, sometimes it falls below our expectations, and sometimes it explodes far beyond our expectations. After all, in the video game market, I believe that a company which successfully creates just one product with astonishing sales. I shudder at the thought of what if Nintendo DS had not had “Brain Training” or “Nintendogs,” and if Wii had not had “Wii Sports” and “Wii Fit.” For each of these products, we create them hoping for a winner, but it is impossible to hit a bulls eye every time. So, what happened at the end of last year in Japan was simply that it did not go as we had planned. To generate strong sales, we need to effectively communicate Nintendo’s messages to our consumers. Of course, the level of sales of “Wii Music” and “Animal Crossing” are nowhere near that of failing software. However, because there is a software that clicks with everyone, you get one consumer after another who want to play with it by purchasing the hardware. As these people invite those around them to have the same positive experience, a product spreads. We have observed what they call DS phenomenon and Wii phenomenon precisely because such a cycle was in place, and we need to make an effort to create yet another one. This is not a structural issue which can happen on home console alone. Rather, what matters here is whether or not we can periodically deliver such a product and/or service. Of course, we will offer new proposals and try to live up to people’s expectations this year again. On DSi: I am imagining that launches of DSi overseas will be in the first half of the next fiscal year. As for change on production ratio of DS Lite and DSi, I would like to cite a historical fact that in Japan, DS Lite was more expensive than the original DS but the total demand converged on DS Lite very quickly. But in Europe, it did not happen so fast and these two had been sold together side by side for a long time. And in the Americas, as the total momentum of DS was very weak then, we had to set the price of DS Lite the same as the original. As a result, the demand converged on DS Lite early on. This time, considering the current foreign currency exchange rates, there is no possibility of selling DSi overseas with the same price as DS Lite at all. There will have to be a difference in price. With this price difference, I think that the DS Lite and DSi will be sold side by side in the Americas and in Europe, but I will not be able to comment on their ratio today as we have not announced the prices and we will have to see how people react to the announcement. More of Iwata talks can be found here.
Blue_Ninja0 Posted February 7, 2009 Posted February 7, 2009 I can't say I'm too sad about disappointing sales of Animal Crossing and Wii Music, not that I don't like the games, but it doesn't hurt them at all at this point, and maybe they'll direct more efforts to the hardcore market.
Teppo Holmqvist Posted February 7, 2009 Posted February 7, 2009 ... and maybe they'll direct more efforts to the hardcore market. FYI, From over twenty teams that Nintendo owns / controls, only one is dedicated for casual games, and that is EAD4. People really lack perspective on these things, and remember previous consoles in far better light than they actually were. I mean, six releases more, and Nintendo has already surpassed its output for Gamecube. Ten releases more, N64 is left behind. And number of those dreaded casual games? 12, with two being japan only, one is exclusive for Europe, and one is pack-in. Nearly all other games released so far are Nintendo IPs that have been around more than one generation. Pretty damn good for console that has been out only for two years, and has at least three, perhaps even four years left.
Blue_Ninja0 Posted February 8, 2009 Posted February 8, 2009 FYI, From over twenty teams that Nintendo owns / controls, only one is dedicated for casual games, and that is EAD4. People really lack perspective on these things, and remember previous consoles in far better light than they actually were. I'm aware of that. I've read what each team from EAD is responsible for what quite recently in fact. And I'm not talking about past consoles. I'm talking about the present. I just said I'm not too fussed about it since I'm not a big fan of casual games, save some good exceptions. So watching it in a cold way, the more resources they direct at hardcore games, the happier I'll be, as long as it doesn't damage Nintendo's budget, which does not seem to be a problem at all at the moment.
Goron_3 Posted February 8, 2009 Posted February 8, 2009 FYI, From over twenty teams that Nintendo owns / controls, only one is dedicated for casual games, and that is EAD4. People really lack perspective on these things, and remember previous consoles in far better light than they actually were. I mean, six releases more, and Nintendo has already surpassed its output for Gamecube. Ten releases more, N64 is left behind. And number of those dreaded casual games? 12, with two being japan only, one is exclusive for Europe, and one is pack-in. Nearly all other games released so far are Nintendo IPs that have been around more than one generation. Pretty damn good for console that has been out only for two years, and has at least three, perhaps even four years left. Well only one team may be making casual games but that said a few of the games they've released have still been dumbed down a bit (Galaxy see was incredibly easy, despite it being amazing, Mario Kart, Brawl, AC wasn't a big improvement). But yeah he brings about a good point when it comes to Wii sales in 08, i think everyone was expecting bigger sales. They dropped quite quickly after the holiday period too.
Blue_Ninja0 Posted February 8, 2009 Posted February 8, 2009 I felt that the latter half of Mario Galaxy was much harder than M64 or Sunshine. They made it in a way that anyone can complete the final boss and then you have the hardest stars to get if you want them. I'm not even going to start on what you said about Brawl. A game is not only comprised of it's core gameplay.
Emasher Posted February 8, 2009 Posted February 8, 2009 EAD4. Actually its EAD2. EAD4 is mostly DS games. Some are casual but a few more are hardcore.
Fierce_LiNk Posted February 10, 2009 Posted February 10, 2009 Well only one team may be making casual games but that said a few of the games they've released have still been dumbed down a bit (Galaxy see was incredibly easy, despite it being amazing, Mario Kart, Brawl, AC wasn't a big improvement). But yeah he brings about a good point when it comes to Wii sales in 08, i think everyone was expecting bigger sales. They dropped quite quickly after the holiday period too. What age were you when you played Melee, Mario Kart on the 64/Snes, or Super Mario 64? Have the games been dumbed down, or you have just grown up with all these games around you, meaning that you've improved as a gamer? People see these "casual" games as too much of a threat. It is not the fault of the games, but the fault of the audience. Why are more people choosing WiiSports over Brawl?
Emasher Posted February 10, 2009 Posted February 10, 2009 What age were you when you played Melee, Mario Kart on the 64/Snes, or Super Mario 64? Have the games been dumbed down, or you have just grown up with all these games around you, meaning that you've improved as a gamer? People see these "casual" games as too much of a threat. It is not the fault of the games, but the fault of the audience. Why are more people choosing WiiSports over Brawl? Probably because Wii Sports is a pack in. But if you change Wii Sports to Wii Play, nobody is denying that there are more Wii players who are casual, And they are more likely to buy Wii Play than brawl because Brawl is intimidating to them. I'd bet most of the people who bought Brawl also bought Wii Play though, but many of them bought it for a Wii Remote. I think its obvious why Wii Fit is selling as well as it is, and other casual games like Wii Music and Carnival Games didn't sell as well as brawl.
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