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Nintendo FY3/2014 Financial Results Briefing, Q&A 7: Emerging Markets

NintendObserver“If we are to do business in the new markets, we have to satisfy their individual market needs.”

 

☆ NintendObs Event – Nintendo FY3/2014 Q & A.

Nintendo FY3/2014

 

 

Question:

As for the approach toward new markets, there is talk about the Chinese game market opening up to foreign corporations, and other companies are moving in to take advantage of this. What is your opinion on new markets, including China, and their potential? Also, what kinds of projects for the new markets are in motion at Nintendo? For example, will business in the new markets become another pillar for Nintendo in the fiscal year ending in March 2017?

 

Answer:

Iwata:

Previously, we distributed products to new markets after they had sold well in Japan, the U.S., Europe and Australia and a steady production scheme had been established. In other words, we have sold the same products in the new markets, at the same price range: 150-300 dollars for hardware and 30-60 dollars for software. Of course, a number of users are willing to pay these prices, including passionate Nintendo fans, and we are very grateful for this. However, in making sure that our products have a large mass-market presence in these new markets, since hardware production costs have become increasingly high compared to the selling price, and in terms of software, having users pay 30-60 dollars is more difficult in the new markets than in developed ones, we cannot simply localize the same product for distribution in the new markets as they would otherwise never become true mass-market products. Moreover, if we are to do business in the new markets, we have to satisfy their individual market needs regarding features, price range and marketing methods. We think that simply localizing the same approach that has been used in markets in which the game culture has been established for 30 years will not create a large market for our products. Therefore, as I explained at the Corporate Management Policy Briefing in January, we will be making changes to our approach for the new markets on the premise that we need something specific for them. We think we need a new approach overall, including hardware, so it will be difficult to show you a specific suggestion and produce results immediately this year.

As for the special economic zone in the Chinese market, there have been changes as reported in the news, and we are doing research into it. However, in looking at the details, there are some unclear points for us. When we made announcements about our business in China in the past, the process of translating our original Japanese statement into English and then into the Chinese languages produced misleading information on a number of occasions. So, when we are able to announce our future business activities in China, we would like to announce them in China in the Chinese languages. I cannot elaborate on the specific details today, but please note that we are now in the research phase.

Although I cannot talk about the actual approach to the new markets, or the specifics of the product, price and timing, at the moment, we would like to utilize some other occasion in the future to talk more about this topic.

 

Source: Nintendo JP.

 

 

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