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Nintendo Investor Briefing: April 2018 Q&A now available in English

Lite_Agent , ,

Last week, on Friday, the usual Nintendo Investor Briefing was held, following the presentation of the latest financial results of the company. The briefing is made of two parts: the presentation by the president, and a Q&A session with investors.

For details about the presentation from the Investor Briefing, please check out the following posts:

For the Q&A itself, you can find the official English translation of the transcript on this page. Nothing really new was revealed during this Q&A, but it still makes for a pretty interesting read (provided you have time for it, and can stomach the very corporate-style answers from the Nintendo executives!).

Here’s the questions answered during the Nintendo Investor Briefing Q&A session:

Question 1: How do you see this business partnership with Cygames differing from the one you have had with DeNA to this point, in terms of the partnership itself, the genres you will work on, and how much of the development load each company will take?

Question 2: Director Furukawa, as the new president of Nintendo, which of your roles do you consider will be most important? Also, what issues are you currently looking at, and which ones do you want to actively tackle? President Kimishima said that just building up cash reserves is not all we need to do, and that he wanted to consider ways of using that money effectively, so I wanted to follow up on how you think you would put that cash to use.

Question 3: When I look at consolidated sales by region (as described in the Earnings Release), I get the impression that sales in the “Other” region (outside of Japan, the Americas, and Europe) account for a relatively large percentage of Nintendo Switch sales compared to previous platforms. I would like to hear about your efforts in these “Other” regions. What specific countries and regions are included? And has your thinking about their business changed? Going forward, how do you envision the “Other” region and how large do you think it will grow?

Question 4: Given the ways you are changing how Nintendo IP is presented with your smart-device business and theme parks and a movie, why did you decide to replace the person acting as president and representative director at this time? I’d also like to hear your reasons for deciding that Mr. Furukawa was the right person moving forward.

Question 5: You sold 15.05 million Nintendo Switch hardware units last fiscal year and you forecast sales of 20 million units for this fiscal year (ending March 2019). What is the basis to that estimate? I believe the stock market consensus is even higher than that, so if the demand is there, how much higher can sales go? In past comments, you have said you expect Nintendo Switch to have a long life cycle. Looking at sales to date, do you think that likelihood has increased? Specifically, do you see lifetime shipments reaching the 100 million units like Wii did?

Question 6: The collaboration between Nintendo and Cygames to develop and operate an original smart-device application called Dragalia Lost is a little different from your practice to date of developing Nintendo IP for smart devices. Has your thinking or policy changed with regards to the market for smart-device applications? Why did you select Cygames out of all the companies developing applications for smart devices?

Question 7: When the late Iwata took the post as president, the prior president, Mr. Yamauchi, was said to have claimed that “the president of Nintendo needs to be a little unusual.” So, I want to ask Mr. Kimishima what important criteria you used to select Mr. Furukawa to be president, and why you thought he would fit that bill. Also for Mr. Furukawa, what kind of company do you want Nintendo to become? Please describe the future direction, or touch on the organizational structure or other measures.

Question 8: As Nintendo Switch enters its second year of sales, I expect the purchase demographics are changing. Do you think Nintendo 3DS can coexist due to its differentiated price and features? You say you want to popularize Nintendo Switch to the point where every person has their own,
so do you plan to capture the demand that is now directed at Nintendo 3DS?

Question 9: Your collaboration to date with DeNA is painted as one where Nintendo takes the leadership in application development and DeNA handles the back end. But are you starting your collaboration with Cygames with that company as the driving force for planning and development of Dragalia Lost and Nintendo in a supporting role? Can we expect Cygames to release titles using Nintendo IP in the future?

Question 10: Are you still in discussions with partners in China about entering the Chinese market? Have you signed any agreements or contracts yet? Is that a high priority for your business?

Question 11: During the presentation, there was talk of dissatisfaction with the current scale of the smart-device business. Can you give us any specific quantitative targets that would be satisfactory for the smart-device business, such as sales targets or a number of titles release annually? You have said that Nintendo wants to release two to three smart-device applications per year, but only one title was released in the last fiscal year. How many titles for smart devices do you think you can release this fiscal year by partnering with Cygames? Cygames is an equity method affiliate of DeNA, so is there a chance of a three- company collaboration between DeNA, Cygames, and Nintendo?

Question 12: How will Nintendo Switch Online be positioned within the Nintendo Switch business? With service scheduled to begin in September, what contribution do you expect it to make to the financial results during this fiscal year? Also, have expenses for preparing the service been factored into the first half (April-September) forecast?

Question 13: What is your take on the digital sales percentage of 17.3% last fiscal year? Where do you expect that percentage to stand two to three years from now? If the launch of the Nintendo Switch Online service boosts the percentage of digital sales, what impact do you think that will have on the stability of revenues?

Source: Nintendo

Lite_Agent

Founder and main writer for Perfectly Nintendo. Tried really hard to find something funny and witty to put here, but had to admit defeat.

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