“There is still room for actual demand to be created from the female demographic.”
☆ NintendObs Event – Nintendo FY3/2015 Q&A.
Question:
I would like to clarify the current situation of Nintendo 3DS. It was mentioned in today’s presentation that there is still room for growth regarding Nintendo 3DS in the overseas markets. However, the company forecasts a unit sales decline for both hardware and software for this fiscal year. The forecast for R&D expenses does not show a large increase. Are there plans to shift development resources or are they simply conservative figures? What is the background to the company’s Nintendo 3DS sales unit forecast?
Answer:
Iwata:
First, I believe there is a great difference between Japan and overseas markets in terms of how much actual demand has been created based on the market potential for Nintendo 3DS. In Japan, Nintendo DS hardware sold more than 30 million units. Compared to this, some may point out that 19 million units are not enough. On the other hand, historically, there are not many gaming systems that have sold 19 million units four years after their launch. Also, considering the current Japanese market situation, it can be said that actual demand has been created considerably based on the market potential. However, there is still room for actual demand to be created from the female demographic. During the Nintendo DS and Wii era, the gender ratio of Nintendo consumers was 1:1. For Nintendo 3DS, this ratio has shifted toward the male side to some extent. In comparison to the gaming platforms of other companies, we have more female consumers, but I do think that this area is slightly weak considering the strength Nintendo has and also considering the trend following the gaming population expansion approach in which games can be accepted regardless of age or gender. Therefore, the challenge for the Japanese market is to be able to appeal to female consumers with ages ranging from young children to women over a certain age and even seniors. I believe this is what will determine the future growth.
As for the overseas markets, from the market potential point of view, the number of Nintendo 3DS units distributed is still small. In addition, in the overseas video game markets, consumer attention tends to focus on home consoles and we have not yet been able to overcome this hurdle. By observing the market reactions after the launch of New Nintendo 3DS, we started to see that with good software and hardware offerings we will almost be able to overcome that hurdle. This year, we intend to open that door. On the other hand, if we were to set forecasts assuming that this door is open, we could provide more aggressive figures, but Nintendo has not been able to meet its earnings forecasts a number of times during the past three periods that resulted in operating losses. Therefore, releasing a forecast resembling a target effort was not in my mind. Based on figures collected by sales teams from each sales region on “attainable targets,” the forecasts we prepared are realistic targets for which we should aim. Therefore, please consider our sales units forecast to be based on not what we believe is the maximum market potential but rather sufficiently attainable targets.
— Financial Results Briefing for the 75th Fiscal Term Ended March 2015
Source: Nintendo JP.
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