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Nintendo Investor Briefing: October 2017 Q&A now available in English

Lite_Agent ,

Last week, on Tuesday, the usual Nintendo Investor Briefing was, 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 the presentation from the Nintendo Investor Breifing, please check out the following posts:

For the Nintendo Investor Briefing Q&A, 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: Will you sell Nintendo Switch in China? What is your view of China in the long term as a market for Nintendo Switch?

Question 2: I found the data on the “Nintendo Switch Gameplay Trends for Japan, the US, and Europe” slide (as shown in the presentation) to be very interesting, showing “Gameplay in TV mode is primary” at under 20%, “Gameplay in tabletop mode or handheld mode” at around 30%, and “Playing in both modes” at over 50%. Now that you can tell how users are utilizing their Nintendo Switch systems in the past half-year since launch, donʼt you have any ideas about adding other features like video viewing outside of gameplay?

Question 3: Nintendo Switch sales have been favorable since the beginning for both hardware and software, but it remains difficult to purchase the hardware, and now ahead of the holiday season it seems that inventory levels are unusually low. What are your thoughts at present about what the bottlenecks are in the production system, and what are you thinking about ways to increase or decrease production volume in the future?

Question 4: In the presentation you explained that in Japanese market, Nintendo Switch user demographics are expanding to include more female consumers and more families. Are you increasing the lineup with an eye to capturing these largest demographics next year? The Animal Crossing application is out. Are you planning on any tie-ins between the smart-device applications and dedicated video game systems? In addition, are you considering any means of leveraging tie-ins to lead children or female consumers to your dedicated video ga me systems (from smart devices)?

Question 5: The presentation explained that the continual release of software would lead to an increase in hardware use among the Nintendo Switch systems connected to the Internet. I would like to know any specific figures you have, such as the number of units in operation or the Internet connection rate. Also, apparently Nintendo will be moving its online service for Nintendo Switch over to a for-pay model in 2018. What kind of reaction are you getting at this point? Please also tell us what changes you expect to see in the ratio of systems connected to the Internet once these services are for-pay.

Question 6: There have been past questions about your plans to release smart-device applications in China, but do you think it will be possible to release smart-device titles in China perhaps in the next fiscal year?

Question 7: In attending presentations in various places, Iʼve heard that Nintendo had a very negative outlook about the Nintendo Switch manufacturing plan at the start of the fiscal year. Iʼd like to hear the reasons within the company for this, such as whether this was because the
management team was being very conservative about Nintendo Switch sales projections, or because of weak projections from the parts procurement team or sales team. And, considering the sales trends going into the holiday season starting soon, it looks like you need to substantially increase (manufacturing and shipping) volumes in the next fiscal year, and Iʼm personally very concerned that miscalculations arising at the start of this fiscal year could lead to bottlenecks in efforts to increase production next fiscal year. Iʼd like to hear your opinions about this point.

Question 8: In the presentation we just saw, you made the point that Nintendo Switch sales could potentially catch up with Wii sales levels, depending on growth in the holiday season. The Wii hardware was really excellent, one could say legendary, but even so, after a certain point, sales dropped off rapidly. Looking at Nintendo Switch, it is selling not just on the novelty of the hardware but also on the attractiveness of the
software, and it looks like third-party support will also increase going forward. However, if it does catch up to Wii, what kind o
f strategy are you looking towards past that point that would be different from Wii? And what do you see in the external environment surrounding Nintendo Switch that is different from the Wii period?

Question 9: It appears that the company will be able to exceed 100 billion yen for operating profit this fiscal year, but what are your thoughts on “Nintendo-like profits”? And the balance sheets show that you have very ample cash reserves. Iʼd expect that all your investors are hoping for share buyback, but perhaps you are thinking instead of putting that towards M&A or R&D for further company growth. Iʼd like you to explain your current standpoint on profit levels and how best to utilize cash reserves.

Question 10: In Nintendoʼs position as a platform manufacturer, its dedicated video game platform business generates income received from third-party developers to produce games on the Nintendo platform, in the form of fees for contracted manufacturing. However, for smart devices, Nintendo pays some of its revenues as fees to Apple and Google. Please tell us about your thoughts on the future, and whether Nintendo might become a platform provider for its own smart-device applications.

Question 11: According to todayʼs presentation, over 300 developers are working on the Nintendo Switch games. What is the momentum among third-party developers compared to Wii, your past hit system? Are there many third-party developers working on new titles exclusive to Nintendo Switch?

Question 12: It looks like Nintendo has set specific agendas for each Nintendo Switch software title so far. For example, as I understand it, 1-2-Switch was about getting users to experience the Joy-Con, The Legend of Zelda: Breath of the Wild was about getting core gamers to purchase the Nintendo Switch hardware, and the large number of one-on-one titles was about getting users to understand Joy-Con sharing. Iʼd like to hear about the agendas for the titles coming out through the end of the year. And what agendas are you thinking about for next year and beyond?

Question 13: The e-sports genre appears to be quite popular outside of Japan, and Iʼd like to ask about Nintendoʼs opinions on this genre. For instance, even in Japan, recently thereʼs been Splatoon Koshien, and there also have been e-sports pro teams established for Splatoon and looking for members, with the field looking quite active. What can you tell us about Nintendoʼs efforts going forward in relation to these activities?

Question 14: (In this revision to financial projections) Nintendo has substa ntially increased its forecast for advertising expenses. What was t he reason behind this increase?

Source: Nintendo Investor Briefing Q&A

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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