Nintendo Investor Briefing: April 2019 Q&A now available in English

Last month, on April 26th, 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 this post!

For the Q&A itself, you can find the official English translation of the transcript on this page. It came out much later than usual, due to the Golden Week break last week. 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!).

Question 1: I’d like to hear more about the thinking behind Nintendo’s business expansion in China. Can we presume you chose to collaborate with Tencent in order to establish a solid base for your business there? Also, how long do you anticipate it will take to grow the business in China into one of the pillars of revenue?

Question 2: The sales target of 20 million units for Nintendo Switch hardware that was determined at the beginning of the previous fiscal year (ended March 2019) was set as a worthy challenge, and ultimately you were not able to reach that target. Should the hardware sales plan of 18 million units for this fiscal year be considered a “plan” instead of a “target”? The software lineup is becoming fairly clear, but besides Nintendo titles, what other strategies do you have for achieving sales of 18 million units? For example, what new marketing strategies, enhancements of online services, and initiatives with other software publishers do you have?

Question 3: In the presentation, there was discussion of the use of sales per hardware unit as a metric, in place of the attach rate of software per unit of hardware. How do you expect this metric to trend over the lifecycle of Nintendo Switch? As the hardware installed base increases, the number of software sales per hardware unit seems likely to decline somewhat compared to now, but do you think there is still room for growth in software sales per hardware unit?

Question 4: Free Nintendo Switch Online memberships were recently given to Twitch Prime members. What kind of discussions are going on within the company regarding initiatives with other platforms?

Question 5: Amid a significantly changing external environment, including cloud gaming and 5G, what are your thoughts on the future of Nintendo’s core integrated hardware and software business?

Question 6: In the presentation, you compared sales per hardware unit for Wii and Nintendo Switch. Can you explain why Nintendo Switch sales grew so much more each year than Wii did?

Question 7: The Nintendo 3DS sales plan is considerably scaled back this fiscal year. Do you intend to use Nintendo Switch to go after the handheld game system market? Iʼd like to hear how you plan to revitalize the handheld game system market.

Question 8: Regarding mobile games, two titles are scheduled for release this summer, but can we expect several more titles to be released during the current fiscal year?

Question 9: Nintendo has shown interest in China for some time now, and I assume the company has conducted market surveys, so how do you see the present Chinese market?

Question 10: The number of accounts with Nintendo Switch Online memberships has reached 9.8 million, but are there people coming and going? For example, are people joining to play Super Smash Bros. Ultimate or Splatoon 2 and then canceling their memberships, or joining just to play TETRIS® 99? Or, have most of them continued to be members once they have joined? I would like more details about the growth in account numbers.

Question 11: Can you provide some background on the recent specification changes made to portions of the game system for Dragalia Lost, including the changes to “summon” (the mechanism for obtaining characters and such at random)?

Question 12: During the presentation, you touched on the idea of targeting consumers you have not yet appealed to as a way to achieve continuing long-term sales for Nintendo Switch. But why do you think there are demographics you have not been able to approach with the Nintendo Switch hardware and the current lineup of software? Also, what do you think Nintendo can do to make purchasers out of these consumers?

Question 13: In the presentation, you reported extremely good Nintendo Switch sell-through for the fourth quarter of last fiscal year, but slightly unsatisfactory hardware unit sales (sell-in) for last fiscal year. How should we interpret the difference between the sell-through momentum and sell-in numbers? Also, what is your take on year-end inventory levels?

Question 14: This fiscal year marks the third year for Nintendo Switch, and I believe it is time for software sales to make a greater contribution to profits. Why did you settle on that level of profits in your forecast? Also, I’d like to hear about the positioning of Nintendo Switch’s third year.

Question 15: Iʼd like to hear more about your plans for expansion in China. Recently, Nintendo’s basic strategy has been to “expand the number of people who have access to Nintendo IP,” so Iʼm curious if you are thinking about bringing things like the mobile business, theme park, and official shop into China. And are you discussing these kinds of strategies with Tencent?

Question 16: My question is about Nintendo Switch usage. I can see how releasing new titles like TETRIS® 99will increase use of the hardware, but Iʼd like to know if you’ve had any success implementing measures to raise engagement rates with software that has already been released.

Question 17: Why are you doing a closed beta test for Mario Kart Tour? Will future mobile games be tested like this as well?

Question 18: Regarding your sales forecast for Nintendo Switch software, why are your current plans so conservative relative to the recent sales growth seen with the strong sell-through following the turn of the year?

Question 19: I understand that digital sales are trending upwards, but Iʼd like to hear your take on digital sales in this fiscal year. Also, do you have any initiatives meant to further increase digital sales?

Question 20: This is about the mobile business. Companies involved in the mobile business seem to operate on the idea that increasing the number of applications is the way to build up sales. When it comes to Nintendo mobile applications, do your sales pile up when you release new applications?

Question 21: What are your thoughts on the risk of a hostile takeover? Do you have any preventative measures or countermeasures against a takeover?

Question 22: In terms of business development in China, I would think that starting with mobile games would yield the greatest business opportunity. Will you be collaborating with Tencent in the mobile business as well?