Investor Meeting Q&A: Iwata on amiibo attach rates, profitability and 3DS compatibility
In order to explain the varying attach rates for amiibo in the various regions (Japan, North America, Europe), Satoru Iwata begins by reminding us that, as opposed to franchises like Skylanders or Disney Infinity, amiibo are compatible with various games. Before they were launched, they were even known as “Nintendo Figurine Platform”, which highlights the fact amiibo are more akin to a brand new entertainment platform than just mere figurines.
Iwata then explains that in Japan, the Toys to Life product category isn’t as well know, as in Europe or North America (even though both Disney Infinity and Skylanders have launched in Japan, they are much less well-known). What’s more, figurine based on video games characters are usually smaller and cheaper in Japan: in fact, distributors even advised Nintendo that amiibo were a bit too big and pricey for the Japanese market. Nintendo still went with the original size and price, as they had to keep in mind the global market, and not just Japan: with over 5.7m figurines sold worldwide, it certainly was the right decision to make.
Therefore, the main reasons for the amiibo attach rate in Japan (vs Europe / North America) are: the Toys to Life product category isn’t as well-known and popular as in the West, and figurines are a bit too expensive and big for the market. Yet, Iwata believes that the gap can be closed, though it will definitely take a little more time.
Satoru Iwata is also aware that Nintendo cannot quite convey the full potential of amiibo just yet. Since their uses vary depending on the software they’re used with, it can be quite difficult to explain to users what the figurines do exactly (compared to Skylanders or Disney Infinity, where they simply unlock a new character to be used in those games). They allow you to train your own fighter in Smash Bros., they unlock special challen ges in Captain Toad, etc… Iwata also reminds us that Nintendo is planning to launch a free application for the Wii U, that will allow users to unlock some portions of NES and SNES games just by scanning an amiibo with the GamePad.
In the end, even though there’s more and more ways to use amiibo with Nintendo (and some third-party) games, the fact is that many people still wonder what those figurines are for and how they are used. For Satoru Iwata, there’s only one thing to do: to persist and to keep on explaining that users only need to scan their amiibo for various things to happen in-game. Only then will they realise how valuable those figurines are.
That being said, initial sales for amiibo were pretty good in North America and Europe, even though they were mostly unknown to most people: word of mouth really contributed to those good sales. Iwata believes that Nintendo can now take advantage of the fact that many people know about amiibo and their various uses, and by increasing the amount of compatible software, they can dramatically improve their sales.
That’s the reason why Nintendo is really banking on the New Nintendo 3DS, with which amiibo can be used without any accessory: by making more and more 3DS games compatible (besides Super Smash Bros. for 3DS and Ace Combat : Assault Horizon Legacy+), amiibo will become more and more valuable to users, and their sales should therefore increase.
In Japan, Nintendo paid particular attention to amiibo sales following the release of the new update for Smash Bros. for 3DS (which adds amiibo compatibility). They noticed a small increase in sales for some of the most popular figurines, but since a lot of them were sold out, they were unable to make a week by week comparison. With the launch of the New Nintendo 3DS, Nintendo was able to multiply the number of amiibo-compatible devices in Japan by 2, so its impact on sales is definitely there. And of course, the amiibo reader/writer, which should be launched this Summer, will make even more consoles compatibles with amiibo, which should lead to even better sales for amiibo.
Finally, Satoru Iwata talks about profitability, and explains that even though all figurines are sold at the same price, their production costs are quite different (the amount of colors for the paint varies, just like the complexity of the figurines themselves). But Nintendo chose not to have varying price points for amiibo, in order to avoid any misunderstanding: having a figurine much cheaper than another might make people believe Nintendo doesn’t really care about this very character, which is something they wanted to avoid. That being said, none of the figurines are sold at a loss, though the level of profits varies.
As for the amiibo themselves, Satoru Iwata reminds us that Nintendo is planning to launch amiibo in card form in the future, which will have much lower production costs and delivery time (which should result in less frequent shortages, and also better sales). The development team is also looking into various forms of amiibo, other than plastic figurines: unfortunately, Iwata doesn’t give any more details about that.
Source: Nintendo
