“We see that our smart device business has the potential to become this next big thing.”
☆ NintendObs Event – Nintendo Q2 FY3/2016 Q&A.
Question:
I understand that you are developing roughly two types of smart device apps: one that you are aiming to earn profits from directly and another that you are prioritizing contribution to the revenues of your existing dedicated game device business. In the mid-term, how much are you expecting your smart device applications to contribute to your sales and profits?
Answer:
Kimishima:
Because, other than Miitomo, we cannot discuss today what kind of applications and with which Nintendo IP we will release, we need to refrain from discussing their revenue forecasts now. On the other hand, revenue is gained at different times on free-to-start applications and the ones we will ask consumers to pay a certain amount of money for when they download them, and we are planning to apply different revenue systems for each of the approximately five titles that we are aiming to release by the end of March 2017.
While we have not changed our policy of wanting to grow our smart device business into one of the pillars for revenue, the dedicated video game system business remains to be the core of Nintendo’s business, and we do not expect our smart device business to immediately constitute half of our revenue.
Miyamoto:
Nintendo is not a company that deals in daily necessities. Because we are engaged in the entertainment business where no one can forecast what will be the next big thing and where we have to create the demand ourselves, our job is to always evaluate the situation from time to time and increase the possibility of creating the next big thing. Just when Nintendo started to earn stable revenue with the hit of GAME & WATCH, our sales doubled with the Donkey Kong arcade game. And when we were able to earn rather stable profits from the arcade game business, because our Famicom (known as Nintendo Entertainment System overseas) business started to get on track, we ceased our arcade business and started focusing on the home entertainment business. I believe Nintendo has shown results with its core dedicated game business by flexibly deciding how to allocate its limited human and other resources, but we are also always challenging ourselves with projects that have the potential to become the next big thing. And now, we see that our smart device business has the potential to become this next big thing. We are simultaneously working on the multiple projects with different possibilities. Due to their unprecedented nature, each one of these challenges has to be exposed to and actually experienced by consumers in order to tell if it has been nurtured well, but we are making efforts so that some of them will eventually become the next big things.
— Semi-Annual Financial Results Briefing
Source: Nintendo JP.
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