Earlier this month, on November 1st, 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, you can check out the full thing on this page! Unfortunately, no significant announcement was made during this presentation.
For the Q&A itself, you can find the official English translation of the transcript on this page. Again, 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: Looking at the sales units for Nintendo Switch Lite by region, the ratio of domestic sales to sales outside of Japan is 2:8. Considering that Nintendo Switch Lite is dedicated to handheld gameplay, my impression is that sales outside of Japan are even greater than expected, but how would you rate overseas sales in comparison to Nintendo’s expectations? Also, the presentation showed that the percentage of people purchasing Nintendo Switch Lite as their first system was not much different from those buying it as their second system. Were there any regional differences in this trend?
Question 2: I’d like to hear more about the Nintendo Switch Lite users who are first-time platform purchasers. I understand that you use their Nintendo Accounts to track software sales trends, and I was wondering if there are other differences in software purchasing trends, such as if they are purchasing previously released software at a different pace than Nintendo Switch users.
Question 3: Please talk about the impact of digital sales on profitability. The ratio of digital sales has grown this fiscal year as a result of actively promoting digital sales by bundling coupons with the Nintendo Switch hardware that can be used to download software, etc. as well as through sales of Nintendo Switch Game Vouchers. Looking at the financial results for the six months ended on September 30, I was impressed with the high gross profit ratio, but have there been any specific changes in the numbers, like in the download ratio of new software compared to previous fiscal years, for example? Entering the holiday season, do you think that this expanding contribution from the digital business will be reflected in profitability?
Question 4: What will be your approach to software development going forward now that Nintendo Switch Lite has launched? Software from series that were originally on handheld systems have shown particularly strong sales this fiscal year, so I can imagine you might remake some titles that were released on handheld systems in the past. Given the improved specifications of Nintendo Switch, as well as new features like online multiplayer, you could combine old nostalgic IPs with new features to provide various ways to play. I’d like to know what kinds of discussions are taking place internally about software development.
Question 5: The initial shipment of Nintendo Switch Lite to the Americas was 0.8 million units, and I cannot imagine shipping that many units if retailers did not think it would be a big seller. Earlier (Q&A1), you talked about how the sales units reflected the momentum of Nintendo Switch, but looking at past trends, retailers in the Americas would have no reason to think that a handheld system would sell, so what led to this outcome? Also, is there any difference in the profitability of the hardware between Nintendo Switch and Nintendo Switch Lite?
Question 6: Sales have been strong for The Legend of Zelda: Link’s Awakening after it was released on Nintendo Switch this fiscal year. And Pokémon: Let’s Go, Pikachu! and Pokémon: Let’s Go, Eevee!, based on Pokémon Yellow Version: Special Pikachu Edition, were a hit in the previous fiscal year. What is your analysis regarding the strength of sales of titles originally released for past platforms and newly remade for Nintendo Switch? With the upcoming release of titles in the Famicom Tantei Club series, is Nintendo planning to continuously release past popular titles on Nintendo Switch?
Question 7: I’d like to check on the progress of your business plan in China. There was a recent media report that software had been approved, but there doesn’t appear to be much change. Are there any obstacles? Going forward, when do you expect to see the effect of this initiative on earnings
Question 8: Mario Kart Tour is off to a good start, but do you think implementing multiplayer will increase sales in the future? Also, I’d like to hear about the plans for mobile applications after Mario Kart Tour.
Question 9: Spending on research and development expenses and advertising expenses up through this second quarter seems slower than anticipated in the financial forecast for this fiscal year. Are they expected to increase as we approach the holiday season? Or is it possible that they will be lower overall than the full fiscal year forecast?
Question 10: Are there any plans to release Mario Kart Tour in China? I’d like to know if there is anything you must prepare upon releasing mobile applications in China.
Question 11: With the release of Nintendo Switch Lite at a different price point from Nintendo Switch, I don’t think you’ll need to lower the price of Nintendo Switch itself in the next year or two. I know that the profitability of hardware will increase as time passes after launch, but how much will it increase? I’d also like to hear about Nintendo’s pricing strategy.