Posted by: seanmalstrom | January 31, 2014

Nintendo Investor Meeting January 30, 2014

It’s on like Donkey Kong! I type my responses live as I read what Iwata is saying.

…unexpectedly weak sales particularly in the overseas markets in the last year-end sales season.

Nintendo actually did believe that Super Mario in 3d World would catapult hardware sales! But when has 3d Mario ever catapulted hardware sales?  It never has before, why should it start doing so today? Miyamoto: “We need to make 3d Mario again so the masses can understand its brilliance.” It never ends!

I am here to tell you about our future, and to begin with, I would like to mention what Nintendo will not change.

How many news outlets have reported Iwata’s line here? That’s right. None of them. What we see reported instead are some analyst’s creative writing exercise into science fiction and fantasy instead of what Nintendo actually says and does.

We therefore believe that dedicated video game platforms which integrate hardware and software will remain our core business.

Iwata says Nintendo isn’t going third party! News at eleven!

Naturally, we are moving ahead with research and development efforts for future hardware as we have done before and we are not planning to give up our own hardware systems and shift our axis toward other platforms.

It makes me happy to hear this.

Furthermore, even after we established the business structure of video game platforms, we did not stop innovating ourselves. For instance, home video game consoles were born to play coin-operated arcade games at home, but we have evolved them into something uniquely appealing. Another example is the games to expand the gaming population that we have offered with Nintendo DS and Wii in the last decade, which were clearly foreign to the mainstream video games at that time but were accepted by a great variety of consumers. In this way, we will continue to value self-innovation in the future.

Hmm, this is an interesting statement: “video game consoles were born to play coin-operated arcade games at home, but we have evolved them into something uniquely appealing.” The Atari Era video games were mostly home versions of arcade games. Space Invaders. Donkey Kong. Pac-Man (LOL at the Atari 2600 version!). And, true enough, games like Super Mario Brothers, Metroid, and Legend of Zelda were not arcade games but something unique to consoles.

However…

The Atari Era also had games designed for the console and not arcade.

Yar’s Revenge was completely original to the Atari 2600.

Pitfall was a huge blockbuster on the Atari 2600.

River Raid was awesome! Did you know that the game was programmed by a girl?

While there were original games for consoles during the Atari Era and not just arcade ports, there was also a ton of arcade ports for the 8-bit and 16-bit generation. Most of your favorite games back then came from an arcade port. Street Fighter 2. Final Fight. Gradius. Teenage Mutant Ninja Turtles: Turtles in Time (and II for the NES). The list goes on.\

I don’t think it is Nintendo’s ‘integrated hardware and software’ that created the console game. I believe the business model of console games allowed the console game to be made. Arcade games had a different business model which is why arcade games are short burst play and very difficult.

One more thing, we will continue to value the motto which we inherited from the company’s former president, Mr. Yamauchi: The True Value of Entertainment lies in Individuality.

Uh oh.

We cannot achieve a strong presence by imitating others and simply competing in terms of size. We have often received advice on overcoming our weaknesses in comparison with other companies and have been questioned about why Nintendo doesn’t follow suit when something is already booming. 

While we agree with Iwata on principal, Steve Jobs said it best when you only imitate when the standard has already been established. Apple doesn’t seek to be ‘different’ than competitors, it seeks to be better. There are some standards of gaming that Nintendo refuses to accept. The online experience is one of them.

Instead, we should continue to make our best efforts to seek a blue ocean with no rivals and create a new market with innovative offerings as a medium- to long-term goal.

Oh, there’s that phrase! Iwata said it! Is Iwata looking to the Seventh Generation for inspiration? I hope so.

Wii U is currently in a very difficult position. 

Indeed.

We also realize that we have not been successful in answering consumers’ questions such as, “What is the difference between Wii U and the previous platform, Wii, and what is the benefit of upgrading it?” By looking at the current sales situation, I am aware that this is due to our lack of effort. What’s even worse is that there even appear to be not a small number of consumers who think the GamePad is one of the accessories for the previous platform, Wii.

Iwata admits people don’t understand the Wii U is a new console. This is greatly amusing to me because everyone has been confused about the Wii U since it’s E3 unveiling. A photo of Iwata holding the console had to be tweeted by NOA to show that, yes Virginia, there was a new console.

Our top priority task this year is to offer software titles that are made possible because of the GamePad.
We have managed to offer several of such software titles for occasions when many people gather in one place to play, but we have not been able to offer a decisive software title that enriches the user’s gameplay experience when playing alone with the GamePad. This will be one of the top priorities of Mr. Miyamoto’s software development department this year.

So this means multiplayer games are out. There is only one Gamepad per console, right?

You know, why wasn’t Mr. Miyamoto doing this earlier? Why was Mr. Miyamoto making games that didn’t really use the Gamepad such as Pikmin 3 or Super Mario World 3d? Why must Mr. Miyamoto have this priority in year two? Why not in year one?

This year, we will make full use of this function by preparing multiple proposals, including the implementation of NFC payments with JR East’s “Suica,” which we announced on a previous occasion. We will showcase our detailed propositions for utilizing the NFC functionality at E3 in Los Angeles in June.

Ugh, NFC will be the focus at this year’s E3. Of course, the E3 presentation will be a dumb video trailer. So lame. Gaming needs its stagecraft.

We are now sure that we can solve the technical problem of displaying Virtual Console software from Nintendo DS on the GamePad.
The dual-screen Nintendo DS, one of which is a touch screen, has a very strong software lineup, and so we plan to add the Virtual Console titles from Nintendo DS software to the future Virtual Console lineup for Wii U.

Oh my goodness, Nintendo is actually going to do this!? Wii U is, in a way, a monster sized DS. It’d be impossible to play Contra 4 on the thing.

While I think DS games on the Wii U is… hilarious… I don’t see any added value. Why would I want to buy handheld games to play on my home console? How about some GBA games instead? Are those on the Wii U VC yet?

To create huge momentum, we would like to ensure that the release of titles such as “Mario Kart 8” is not a one-off event.

Iwata always announces a new game or give a release date during bad news at the corporate briefing.

As I repeatedly stated, if one considers that apart from Nintendo DS and Nintendo 3DS, no other game system in its peak years has achieved annual sales of 4 million units after the year 2000, we can say that the domestic sales of Nintendo 3DS remained at an extraordinary high level in 2013 as well. In the U.S. market, an independent market research company called NPD publishes data which shows that Nintendo 3DS became the game device with the highest share in the last calendar year with lifetime hardware unit sales exceeding 11.50 million units.

But what about the profit-share, Iwata? The profit-share of the 3DS is extremely different from the DS or even GBA and Gameboy.

Now that they have observed the success of “Puzzle & Dragons Z,” the number of companies who have approached Nintendo with an offer to provide Nintendo 3DS with the titles which they originally designed for and grew on smart devices has been increasing. As this example illustrates, the Nintendo 3DS platform has already reached a scale with enough business potential for not only the titles invented for game devices but also the ones originally made for other platforms.

Here is what is going on. Smartphones or tablets should be renamed as ‘handheld PCs’. That is what they are: handheld PCs. The relationship between handheld consoles and handheld PCs will be exactly the same as home consoles and home PCs.

Back after the Atari Crash in Generation 2, every analyst said that no home console would ever exist due to the growth and proliferation of the home personal computer. When the NES began selling extremely well, PC game companies began porting their top selling games to the NES. These games included ones such as Shadowgate…

…or Prince of Persia…

Electronic Arts was the last hold out. They only ported games when the Board of Directors at EA threatened to get rid of its president, Trip Hawkins, who believed that game consoles would collapse again.

The home console and home PC dynamic is identical to the handheld console and handheld dynamic. The only difference is that home consoles crashed which meant they saturated the market at the same time as the home PCs did. The handheld console had already found market saturation before the arrival of handheld PCs. The BOOM in handheld PCs SEEMED like handheld PCs would gobble up all handheld consoles. The truth is that handheld consoles don’t have as much room to grow because of market saturation.

Currently, Samsung and Apple are in very big trouble due to handheld PCs beginning to reach market saturation. People will keep upgrading their handheld PCs for a while until we reach ‘good enough’ (just like people stopped upgrading Microsoft Office once the versions became ‘good enough’). Then what? The next generation of gaming dedicated hardware will still find a sizable audience.

What is really interesting is that the home PC market is decreasing. No one is saying, “Gee, maybe these dedicated home game consoles are cannibalizing the home PC market!” No one says this. From tech sites, dedicated game hardware is always doomed. It was doomed in 1985 so it must be doomed today. PC market can only go up, up, up! Except now they talk as if PCs never existed and only talk about smartphones and tablets.

Let me first talk about redefining the concept of a video game platform.
This medium-term goal is not expected to come to full fruition within the timeframe of this current calendar year. However, I feel that this is going to play an extremely crucial role in deciding whether dedicated video game platforms can adjust to rapid environmental changes in today’s market and can develop as a sound business.

This should be interesting!

The slide shows all Nintendo platforms that were launched in the past ten years. While we have tried to achieve, among other things, software-driven connectivity between handheld devices and consoles, handheld devices and consoles were in principle separated completely in terms of our ability to connect with our consumers.

It’s because there is no fucking account system, Iwata.

I understand a ‘different relationship’ in the past when the SNES console uses different cartridges than the NES console. I understand ‘different relationship’ when the Gamecube uses optical discs while the N64 uses its cartridges.

But why does this ‘separation between generations’ apply to digital games? You might say, “Because, Malstrom, it is due to games being designed for that particular hardware!” But this doesn’t apply to Virtual Console games. How many times do I have to buy Super Mario Brothers? Why would I buy more hardware where I have to buy the same exact game I have bought for the past twenty five years??

On Wii U, we launched Nintendo Network IDs, which are abbreviated as NNIDs. This is the first step of our efforts to transform customer relationship management from device-based to account-based, namely, consumer-based, through which we aim to establish long-term relationships with individual consumers, unaffected by the lifespans of our systems. 

Oh! Tell me more!

Our future platform will connect with our consumers based on accounts, not devices.

on accounts, not devices…

…on accounts

…accounts

Fiesta time! Could this be the preview for Generation 9?


Of course, when we do launch new hardware in the future, rather than re-creating an installed base from scratch as we did in the past, we wish to build on our existing connections with our consumers through NNIDs and continue to maintain them.

I like the sound of this! Nintendo can start with us NOT HAVING TO BUY SUPER MARIO BROTHERS AGAIN AND AGAIN AND AGAIN! This also solves the dilemma of having to remake the same games. If we want Super Metroid, we can play Super Metroid. I would want the next 2d Metroid to be spectacularly enough to not be confused with the SNES version. I want differentiation in content with the games. No one confuses Super Mario Brothers 3 with Super Mario World.

I’m fine with a PREMIUM price on VC games so long as I get to fully OWN it going forward. Since all the games were based on a device, emulating the device should allow most of that platform’s games. My PC can do it. Why can’t the Nintendo platform?

Even if Nintendo makes stupid and crappy games, I would keep buying the Nintendo platforms because my game collection would be there. I’ve noticed on Apple devices that while movies and music from the iStore go from device to device, the games don’t. How about the games transferring over, Nintendo? No one has done this. Not Sony or Microsoft. Start with the simple NES games and do the rest of the VC collection. Put up the Wii Ware stuff. Let’s get this stuff going!

Given that the competition for consumers’ time and attention has become fierce, I feel that how we will take advantage of smart devices is an extremely important question to answer. However, in order to be absolutely clear, let me emphasize that this does not mean simply supplying Nintendo games on smart devices. Taking advantage of smart devices means connecting with all consumers, including those who do not own Nintendo’s video game systems, through smart devices and communicating the value of our entertainment offerings, thus encouraging more people to participate in Nintendo platforms. I will elaborate on this point later.

Here is the answer to that.

INPUT INTO SMART DEVICES: The game should send over the MANUAL and HINTS and generally show stuff that makes you WANT TO PLAY IT MORE. All that content Nintendo puts on the game’s websites can find an audience here. Like imagine the Smash Dojo website and all its content. The game could be using this content to SUPPLEMENT the game experience. People underestimate how much Nintendo Power helped enhance the overall game experience.

OUTPUT FROM SMART DEVICES: Perhaps have my music stream into the game? Have my contacts stream into the game?

In other words, our platform will not be bound to physical hardware and, instead, will be virtualized.

I like the sound of this. Therefore, if a cat knocks over my chocolate milkshake over my game console (a constant tragedy that occurs each generation), I should not have to rebuy all by digital games just because the hardware crapped out.

My Wii hardware crapped out making me lose a HUNDRED of Virtual Console games. I won’t buy anything Nintendo without an account system from now on.

Therefore, we would like to, instead of directly expanding our business on smart devices, focus on achieving greater ties with our consumers on smart devices and expanding our platform business.

I like this way of thinking.

However, if you report that we will release Mario on smart devices, it would be a completely misleading statement.

Iwata knows the media is full of crap. Hahaha, he is warning them beforehand!

The environment in which our users can download paid software is one example of where we should aim to make more off-device improvements than on-device ones.

Yeeeeesssss.

Based on our account system, if we can offer flexible price points to consumers who meet certain conditions, we can create a situation where these consumers can enjoy our software at cheaper price points when they purchase more. 

Interesting.

We aim to establish a new sales mechanism that will be beneficial to both consumers and software creators by encouraging our consumers to play more titles and increasing a platform’s active use ratio without largely increasing our consumers’ expenditures.

I like this, but I am worried that my play habits and all will be broadcast to all game industry companies. Privacy is going to be an issue. If people don’t wish to participate in this ‘smart account’ system and want to pay full price for everything, why not let them?

I, however, would be interested to see this account system. Instead of going to Gaming Message Forums to find out what games are ‘like’ Metroid, the account can say, “You’ve bought a ton of Metroid. Here are some other games that are like Metroid.” Or “people who bought 2d Mario also bought Mega Man”. The problem with many people is that it takes considerable time to research information about games. Usually, people like a few games, and it takes word of mouth to say ‘if you like this game, you will like that game’.

While Nintendo may see the account system as a way to sell more games, I see it as a way to buy the games I want to play. If the account notices I keep playing RPGs, I wouldn’t mind Nintendo pointing out some other RPGs that I might have missed including ones on the VC.

In other words, we think that spending time to develop our approach of having our characters appear mainly in our carefully selected games has created our current fortunate circumstances. However, we are going to change our policy going forward.

Hmmm….

By moving forward with such activities globally, we aim to increase consumer exposure to Nintendo characters by making them appear in places other than on video game platforms.

Didn’t Nintendo always do this? With Nintendo Power, the cartoon shows, and the movie? Perhaps we will see a Zelda movie after all.

We plan to take significant steps toward such a new market approach in the year 2015.

Is Iwata’s boldness a return to 7th Generation thinking or just saying what the investors wish to hear at a very disappointing quarter? We shall see…

The theme of “health.” Of course, defining a new entertainment business that seeks to improve QOL creates various possibilities for the future such as “learning” and “lifestyle,” but it is our intention to take “health” as our first step.

Please note, however, that rather than simply setting health as our theme, Nintendo will also try to expand it in a new blue ocean.

I really like this QOL (Quality of Life) thing Iwata is saying. It reminds me of that post I made on Francis. The person who plays Francis (who is a joke character)  said that he realized quality of life was more important than quantity of life. It is why someone goes to the gym to get fit or why someone reads literature. While going to the gym or reading literature takes time, the rest of your life is enhanced by doing those things.

Nintendo received tons of good press, customer goodwill, and sales with the making of Wii Fit and Brain Age.

One of the reasons why I despise the Game Industry is because they are like Big Food. Instead of making nutritious food, the food is full of sugar and other crap that makes one addicted to empty calories. People get fat eating that crap. (Notice how there were little to no fat people in the 1960s or earlier. Look at the public photos, and you will see very few fat people.)  The Game Industry is putting out unhealthy games that is designed to create disastrous addictions. Everyone is emulating World of Warcraft’s MMORPG features. I don’t like what is happening to games at all. I prefer my ‘clean’ games of the past than these ‘unclean’ games that declare when you’ve gotten an achievement and play psychological games on you to waste ALL YOUR TIME. (30 hours is my max for a video game playthrough and that is reserved for big budget RPG like Final Fantasy. Games should not take that long!)

Please note, however, that rather than simply setting health as our theme, Nintendo will also try to expand it in a new blue ocean.

Oh! Blue Ocean! How I missed thee! Say it again, Iwata. Say it!

Including the hardware that will enable such an idea, we will aim to establish a blue ocean.

Yay!

BTW, Iwata speaking so much on why Nintendo won’t make games for mobile PCs is a WASTE OF IWATA’S TIME. Why does Iwata have to respond to such retard talk? It’s like demanding Iwata respond to why Nintendo won’t make software for Sony’s platform.

However, what is generally good for health requires some kind of effort to be made by the individual, and, as I am sure that many of you have experienced this, it is sometimes difficult to stay focused and engaged, and it is not uncommon to give up after a few days. This is where our strength as an entertainment company to keep our consumers engaged and entertained comes into play, assisted by the non-wearable feature, which is the biggest differentiator of this new business field, as well as user experiences that integrate into people’s daily lives, all of which help us overcome this difficulty. 

I like this.

If we do indeed succeed in doing so, we will be able to provide feedback to our consumers on a continual basis, and our approach will be to redefine the notion of health-consciousness, and eventually increase the fit population.

I LOVE that line. “Increase the fit population.”

Do you know what that means, reader?

Do you?

That means INCREASE THE NUMBER OF BABES IN THE POPULATION! There is an unacceptable number of hot girls in society. By increasing this number, Nintendo makes women happy, makes men REALLY happy, and makes the world a prettier and more joyous place to live in.

And if that wasn’t good enough, they will be HOT BABES WHO PLAY VIDEO GAMES.

This is my dream for Generation 9’s Nintendo console to do:

Make fat women hot. Wii Fit was a good start, but more must be done! Obesity must be destroyed! This is something even the hardcore gamers can get behind.

On the other hand, while we feel that this is going to take two to three years after its launch, we expect the QOL-improving platform to provide us with new themes which we can then turn into games that operate on our future video game platforms, too. Once we have established such a cycle, we will see continuous positive interactions between the two platforms that enable us to make unique propositions.

Hmm, I didn’t realize Iwata is talking about a separate platform. Is this wise? Hardware is expensive. One of the reasons why Wii Fit sold so well is because people liked having an excuse to get a games consoles. “It’s a health thing. AND IT PLAYS GAMES!!!” People always look for an excuse to buy the game console.

Nintendo should give gamers an excuse to get the QOL platform. Maybe have QOL platform act as a unique game controller?

I’m not so sure this will work as separate hardware. Do people get a ‘quality of life device’ to replace their iPhone in the gym? No. They use the iPhone. Why not just use the game console? Or is the QOL platform a really cheap device? Game consoles these day have to have ‘HD graphics’ and other bells and whistles that a QOL device wouldn’t need.

It’s hard to say anything until we know what the hell the platform will do.

I am happy that I heard nothing about returning to the GAMECUBE or looking at the VIRTUAL BOY for inspiration. What I heard was a ‘big picture’ view of all the generations and citing the Seventh Generation successes.

I’m also happy that Nintendo is returning to the Blue Ocean.


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