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

Lite_Agent ,

Last week, on Friday, 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 (and dodged, in some cases!) during the Nintendo Investor Briefing Q&A session:

Question 1: I would like to ask about the reasoning behind the number projected for the Nintendo Switch software shipments during this fiscal year (35 million units). While you have stated that you will present new business flows in the future and expect to generate synergy between the smart-device and game software businesses, it seems that the hardware attach rate for the Nintendo Switch software in this fiscal year is low compared to the rate for Wii U from the year of launch through the end of the following fiscal year. What factors influenced this determination – was it because Nintendo Switch launched outside of the holiday season, because you expect download sales to grow, because you plan to bundle major titles with hardware, or because the software lineup is insufficient? Please provide more information on the background for determining the planned shipment numbers for this fiscal year.

Question 2: How are you estimating the contribution of the smart-device business to sales and profit in the financial forecast for this fiscal year? It seems there has been a gap compared to market expectations, so please explain in as much detail as possible. 

Question 3: If demand for Nintendo Switch reaches the same levels that Wii did, isn’t it likely that the product will be sold out during the holiday season if you can’t secure sufficient inventory levels by the fall? Are you taking any steps to address this, such as establishing an expandable assembly line? 

Question 4: I think it is incredible that you were able to predict ahead of time that shipments of The Legend of Zelda: Breath of the Wild for Nintendo Switch would surpass the number of hardware units shipped. The late President Iwata declared that you would be reconsidering many conventions, and I feel that your way ofthinking has changed considerably in areas such as hardware launch timing and price, software lineup and demand forecasting. Can you explain what kinds of changes have occurred? 

Question 5: I’d like to hear your thoughts on the profitability of the Nintendo Switch platform. You mentioned previously that hardware pricing is set just high enough to stay out of the red, but there are an abundance of accessories for Nintendo Switch, while download sales, including add-on content for The Legend of Zelda: Breath of the Wild, are shifting into high gear, with a paid online service on the way. And on the promotion side, I see your eSports and Nintendo Direct initiatives as being more efficient, and I get the impression that marketing costs are more or less under control within the second year after a hardware launch. I would imagine your revenue model for Nintendo Switch is going to be different from what it was for past hardware, but can we also expect profitability to be higher than before? 

Question 6: I’d like to know as much as you can share about the basis for your short and medium-term sales forecasts of Nintendo Switch. In particular, are you expecting 10 million hardware shipments during this fiscal year because that’s the number your total anticipated demand in each region led you to, or are you looking at your software lineup for this period and predicting how much hardware you think you can sell? Also, you have been quoted in the media as saying that you want sales of Nintendo Switch to match the Wii sales. Should we take that to mean that your sales target for hardware is going to be 100 million units? If so, then do you envision Nintendo Switch selling not just one per household, but one per person?

Question 7: Nintendo Switch sales numbers certainly resemble Wii immediately after launch, but I would guess that the favorable demand for Nintendo Switch up to this point has largely come from Nintendo fans who bought Nintendo Switch because they wanted to play The Legend of
Zelda: Breath of the Wild. I see this situation as being a little different from the huge contributions that Wii Sports is thought to have had on Wii sales at that time. Looking at the future software lineup for Nintendo Switch, I continue to see a lot of titles that cater to these long-time Nintendo fans and video game fans in general, but what is your strategy for enticing non-fans to buy Nintendo Switch, and what sort of time frame do you have for it? 

Question 8: Looking at sales results for Nintendo 3DS in the last fiscal year, how has your thinking changed with regards to lifecycles in the dedicated video game system business? You announced New Nintendo 2DS XL, which will refresh the Nintendo 3DS hardware cycle, but looking ahead to Nintendo’s medium and long-term business development, including Nintendo Switch, is it possible that you will now be continually updating hardware to extend their lifespans? 

Question 9: There are concerns that shipments of Nintendo Switch will not meet demand for up to two years, as happened with Wii. How much do you plan to increase Nintendo Switch production during the first quarter of this fiscal year compared to the fourth quarter of the previous fiscal year? 

Question 10: While Nintendo Switch has achieved great popularity and is providing new ways to play, please discuss increasing the number of people who can experience Nintendo IP from a long-term perspective. What are your thoughts on new uses for IP, such as the theme park and visual businesses? 

Question 11: Nintendo announced the retirement of Director Genyo Takeda due to the expiration of his term of office. I thought that the term of office for directors was one year, but was the age of 68 established as the retirement period due to internal regulations? Or is Takeda retiring because it is a good time to pass the torch onto the next generation? Please explain the background of this announcement. 

Question 12: The Animal Crossing application for smart devices was not discussed this time. What was the reason for this? 

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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