Highlights from Nintendo's Analyst Presentation at E3 2010 - News
by VGChartz Staff , posted on 22 June 2010 / 4,170 Views
Nintendo presented some interesting information at an analyst briefing at E3, before answering questions regarding the 3DS and its strategy. Here are some highlights:
Note: Other home consoles does not include PS2. A quick check reveals PS3 sold 3.20m in the USA, and X360 sold 3.41m in the USA over the last six months (6.6m combined) while Wii sold 6.8m. So it is really 'other home consoles released this generation'. With PS2, the figure would be 6.8m for Wii, and something like 7.4m for all other consoles.
Nintendo also noted that in November 2009 to April 2010, Wii has outsold PS3 and X360 individually in all of 2009 + the first four months of 2010 by NPD figures. Again, some research indicates that NPD had PS3 at 5.47m in January 2009 to April 2010, while X360 was at 6.05m in January to April 2010 - both figures are less than what Wii sold in the last six months.
Wii is also roughly 5.0m ahead of PS2 in the USA by NPD figures according to Nintendo.
Year one corresponds to 2000 / 2006, with year four corresponding to 2003 / 2009 in the PS2 to Wii comparison.
Reggie Fils-Aime noted "The relative impact is seen best by comparing sales of Wii during its first four years on the market…to the track record for other leading home consoles. As you can see, the PS2 is the only other meaningful competitor. But Wii continues to extend its advantage. After year two, Wii had outsold the PS2 trendline by one-point-two million units in the U.S. After year three, the difference grew to one-point-seven. But after last year’s record holiday, Wii has now outsold the PS2 by nearly five million systems at the same point in its life cycle."
Nintendo also talked about its demographics in the United States.
"The blue bars here aren’t much of a surprise. They show the U.S. life to date share of installed base, according to NPD, among the three current home systems. The Wii share is just about that of the two others combined. But adding the orange bars may create something of a surprise. In February, Ipsos asked adult players…those 18 and older…how often they played their home system at least an hour or two a week. Here, not only does Wii outpace the others in terms of play time…
But among the respondents, Wii owners actually prove to be MORE active in playing than other owners. The share of play on Wii…is higher than its share of ownership.
Purchase intent for Wii also remains high in the USA (portables aren't included).
Nintendo closed with some new information as well (note: this briefing was on June 16, 2010).
"We entered the year with continued strength from both New Super Mario Brothers Wii the best selling game so far in 2010 as well as Wii Sports Resort, which is the fourth best selling game year to date (in the USA for both).These titles are two of only four titles which has sold more than a million units from January through April according to NPD.
The Netflix arrangement has resulted in a clear increase for our connectivity efforts.
In May, we launched both Super Mario Galaxy 2 and the new Wii configuration…featuring either black or white hardware, as well as both Wii Sports and Wii Sports Resort.
Super Mario Galaxy 2 is approaching 900,000 units here in the U.S. And the black bundle is also selling quite well. We’ve now sold well over 300,000 units at this point."
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After the presentation, Nintendo answered some questions from analysts too. Highlights are below.
Are you planning on releasing any of your previously launched games or new IP for any of the mobile devices that are currently available in the market?
We think Nintendo is a company whose value is recognized by the way that we combine great software experiences with particular hardware capabilities that only we can offer. Therefore, my feeling is that offering our IP on other devices would have an adverse impact on the overall value of our company and at the same time I think that it’s not something that would add value to Nintendo.
I would like to answer your question from two different perspectives. Given my development background, the first will be from a developer’s perspective, and then I’ll also try to answer the question from the perspective of a representative of the company that is the platform holder. First, I’d like to talk about how much development resources are required in order to take a game and create it in three dimensions.
As long as you are already creating a fully rendered 3D world, all you have to do in order to create the 3D visual effect is to capture the same images with two cameras, one for right eye and the other for left eye. From a development perspective, it actually does not make much of a difference in terms of development costs to create the 3D visual effect.
On the other hand, because the visual capabilities of Nintendo 3DS are more powerful than the existing Nintendo DS, if you are going to take full advantage of the graphics capability of Nintendo 3DS, the development cost is also expected to rise.
Therefore, if developers decide to try and maximize the graphical powers of the system, then the cost would be more expensive than what it is currently for Nintendo DS and may potentially approach the cost of developing Wii software.
Next, I would like to provide my perspective as the president of the company of the platform holder. While I do not think that you simply have to increase the cost of your development in order to create compelling software on Nintendo 3DS, it would also be a lie if I said that any software can be developed without spending a lot of money.
I think it’s ok to see a broad range in development costs from title to title. I believe it’s possible for developers who have great ideas to be able to find ways to develop those ideas at a relatively low cost and make the resulting game a hit due essentially to the quality of the ideas.
On the other hand, I believe there will be developers who will use a similar amount of resources to create games as if developing for a home console, and such games also would result in satisfaction to our consumers.
I see the possibility for a broad range of software development costs to increase the possibility of satisfying Nintendo 3DS owners and really appeal to a very broad audience. That would be the ideal situation for Nintendo 3DS. We intend to exemplify this with our first-party titles.
The question of what our plans are for digital distribution is one that’s very important to us. And I do think that we do have some topics of discussion for ourselves in terms of how we can, with WiiWare and DSiWare, try to capture and focus consumer attention on those products. Of course, I think that it’s very difficult to devote significant marketing dollars to individual titles. So I don’t think there is a whole lot of reality behind the idea of us doing a lot of TV commercials for specific DSiWare or WiiWare titles.
The other thing that we feel quite strongly about is that we need to find ways that platforms like Wii and Nintendo DS can appeal not only to people who are proactively going out and seeking that content, but also to those who are not actively seeking them. So in the presentation yesterday, I spoke about some new attempts that we’re doing with Nintendo 3DS on the communication front that would allow the device to receive information without the consumer having to actively download it. Instead, it would happen automatically and update itself.
I can’t go into detail on what the plans are today, but of course, with a device like Nintendo 3DS, we do intend to offer some type of digital distribution. What I can say is that if that type of digital distribution is not something that is very new and fresh compared to what we have done with Nintendo DSi, then I think we’re going to have a hard time reaching out beyond the audience that actively seeks out that type of digital content.
So up until now, much of the digital distribution focus has been on more of a "pull type" where the consumer goes out, gets the content and pulls it to themselves. With Nintendo 3DS, we’re looking at a model that would be more focused around the "push type," where we’re able to push information or content out to the device. And with a model like that, what it means is that because the consumer doesn’t have to actively seek out the information themselves, it gives us a venue for creative new ideas of our company or of our developers to reach consumers much more easily.
And ideally, if it is possible, we would like to try and find ways to customize that functionality as much as possible to meet our consumers’ tastes. Unfortunately, we can’t go into detail on that today because there’s still a number of questions about the degree to which we’ll be able to do that. But I would like to say that we are thinking seriously about strengthening digital distribution.
It’s been more than 15 years now since we first started focusing on 3D. I’m sure all of you here are aware of the Virtual Boy. And even back in the Nintendo GameCube era, we were experimenting with 3D functionality as GameCube, with its 3D compatible circuit, was able to output 3D visuals to a 3D LCD screen attached to GameCube.
But unfortunately, considering the current penetration rate of 3D television sets in ordinary households, we don’t think that there’s much reality in creating a new hardware system that would support 3D visuals as a home console.
Of course, at some point in the future, when the installed base for 3D televisions is such that it’s no longer a rarity for people to have one, then certainly, when that point in time comes, whichever console Nintendo would release at that point would most likely take advantage of 3D technology.
On the other hand, the advantage of a handheld device is that the hardware of the handheld device and the screen are a single unit. And what that means is that anybody who purchases that device, or 100% of the installed base of that device, can experience the 3D visuals. This is the reason why Nintendo is first introducing 3D games with a portable game system.
Because a 3D home console video game machine can really be created at any point in time, once there is an installed base of 3D TVs that would be able to support such a console, we would like to think about what we will do. For now, we would like to think about functionality for sharing 3D photos taken by a Nintendo 3DS with other Nintendo 3DS. We currently have a very hard time seeing any other type of standard coming about. Once a standard arises, then perhaps we’ll look at what we can do to allow our 3D content to be shown by that standard on other devices.
And then the second question is, as you think about the next home console platform, the next Wii hardware cycle, is it solely based on the velocity of hardware sales or does a slowing software volume, and a lessening of the momentum of that platform, start to drive the timing of the next Wii console?
Let me first address software sales from a U.S. perspective. We could have just as easily put a chart that shows that life-to-date software sales for the Wii, which are dramatically higher than a similar point in time for the PS2, as well as where we stand versus the other two home consoles, which again is dramatically higher in life-to-date sales so far.
I would ask what is the right measure in looking at what software sales should be for a platform. Certainly, we are at a high-water-mark in the absolute. If you look at the number of million-unit-sellers, it is quite impressive. If you look at how we’ve had longevity in sales for titles like Wii Fit, Wii Fit Plus, New Super Mario Bros. Wii, and Mario Kart Wii, these are titles that launched multiple years ago that continue to sell exceptionally well today.
I think the bigger challenge is how we enable our third party developers to have similar performance on the platform, have similar long-tail performance, have similar high absolute levels of sales. And we’re beginning to see that trend. You look at a title like Just Dance that started -- and I think they would even say quite modestly initially, but has now gone on to sell multiple million units across the world. It’s those types of initiatives that will continue to drive overall software sales for the platform.
In terms of whether we should be looking at software sales or hardware momentum, I’ll let Mr. Iwata speak to it in terms of how we think about hardware transitions and when is the right time to transition. As we look at the platform, the Wii business certainly has a tremendous amount of life left. And we will see that with titles like Donkey Kong Country Returns, GoldenEye 007, Disney Epic Mickey, and certainly the new Zelda coming in 2011.
Iwata:
I do not think that there is an immediate need to replace the Wii console, but of course, at some point in the future, that need will arise. So I will answer your question from the perspective that we currently do not have an answer as to what point in the future that need will come.
This is something that I mentioned yesterday on stage as well, but when we first launched Nintendo DS and Wii, very few people in the industry thought that we would achieve the results that we have so far. Because of that, with those two platforms in particular, we had no choice but to try and create the market for those platforms by ourselves with the first party software.
However, if you recall our Nintendo 3DS announcement yesterday, we were able to announce the lineup that we did yesterday because the third party developers felt the possibility of a particular platform and came ready to support it from the launch time.
I think when that time comes and we are able to garner that type of support from the third parties, coupled with our own software contents, then naturally, we will be able to create a situation where many software become available and various types of people start to participate. We will also be able to create a good cycle for that new platform, which encourages consumers to buy software. When we’re able to do that, then I believe some of the challenges that you pointed out will start to move in a positive direction.
I think we need to clarify that there’s a big difference between growth and absolute units sold. The fact is, when you look at the absolute number of units sold, it is clear that our pace is dramatically better than the other home consoles. As we showed on the chart, it’s also very clear that as you look at what’s been happening month-to-month, the absolute level of sales continues to widen in our favor versus the other home consoles. So it’s easy to talk about growth when you’re working off of a very low base.
In terms of where we go in the future, our path is very clear. We want to provide compelling experiences for the consumer. We want to do that in a way that has tremendous value for the consumer and that one-two punch, we believe, is going to continue to drive our business. The consumer today can get a Wii configuration that has two fantastic pieces of software and a Wii Motion Plus for $199, and the consumer is responding. We believe that the consumer will respond to METROID: Other M, Wii Party, Kirby’s Epic Yarn, Donkey Kong Country Returns, and to all of these fantastic franchises that we’re bringing to bear.
If we continue to execute that, we will continue to widen the gap versus the other home consoles and that is the key because as you drive the installed base -- to the point made earlier -- that’s how you drive software sales and monetize this business moving forward. We believe that’s the right formula.
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Yeah, RolStoppable is definitely joking...those arrogant jerks! ;-p
I always enjoy reading Iwata's comments/interviews. Hearing him compare piracy to a game of whack-a-mole put a smile on my face. (it's in the original article: Q&A section: Page 3: Q8/A8: http://www.nintendo.co.jp/ir/en/library/events/100616qa/03.html). It's just enjoyable to hear a successful company president discuss ideas, technologies, and future directions.
Good Read.
I have a feeling RolStoppable is Sarcy lol anyway I think it's interesting to know the latest news and figures.
@RolStoppable Why? They need to do this sort of thing occasionally in order to please people investing in them. Otherwise, how would people know they're worth the money?
Where do they get their survays from?
