Following last week's annual financial results and the President's Presentation, Satoru Iwata faced the music in an investor Q&A to address important issues for Nintendo's prospective return to substantial profits. This was published promptly in Japanese, but we now have the official English translation to consider, and as always it includes some clarifications and revelations on what could be coming from Nintendo in the next year.
One topic that came up regularly both in Iwata's presentation and this Q & A was that of download games, with Nintendo being clear in its ambitions to maximise sales and profits from its eShop stores. In last year's meeting Satoru Iwata made the point that the Wii U eShop, in particular, would support models such as free-to-play which we've seen, sort of, with titles such as Tank! Tank! Tank! and Zen Pinball 2. When addressing the topic again, however, the Nintendo President not only re-emphasized that the relevant infrastructure for these kind of offerings is in place, but also that Nintendo itself has plans to produce downloads that will follow free-to-play and subscription based models. His focus is not only on expanding download sales, but using them as a method of advocating ideas such as NFC and the strengths of Wii U.
We think that digital distribution of packaged software is only the first step in expanding our digital business. We will not simply change our existing packaged software distribution channel. Rather, we might have many other types of business models in addition to packaged software. For example, we might see more games that are similar to free-to-play games, games that cost much less or games that require a monthly subscription fee. Digitalization allows for greater flexibility, whereby having more ways to make payments, both software developers and consumers have more options. And Nintendo 3DS and Wii U have flexible systems to handle such trends, so it is now a question of putting these ideas into action. I can definitely say that Nintendo will make new offers that go well beyond simply replacing packaged software with digital software.
...Also, I talked about JR East’s public transport e-money card "Suica" today, and I feel that the impediments to making small payments on Wii U will be reduced dramatically if one can make payments in this fashion. If this becomes a reality, it will be easier for consumers to pay for products and services such as, "Wii Street U powered by Google," add-on content for games or pay-per-view options in VOD (Video on Demand) services, and I feel that there will be more ways for consumers to take advantage of these options.
I think that those who already own a Wii U system are starting to understand the advantages of having a game console that is connected to a TV as well as the Internet and, together with a device with touchscreen controls that you can hold in your hands, integrate to form one system. As a platform holder, Nintendo anticipates that as the system becomes increasingly convenient for consumers, the number of business opportunities taking advantage of these features will grow. We do not do business under the concept that "digital business" equals simply replacing packaged software with digital software, or, put another way, changing our distribution channels.
This is all a far-cry from the Nintendo of relatively recent times that seemed resistant to keeping up with online trends. In terms of how this affects games, meanwhile, Iwata has made it clear that Nintendo itself will be exploring alternative payment models and structures, rather than simply giving third-parties the option and staying away.
What do you think of this? Do you think there are some Nintendo games or services that would work well with free-to-play or subscription models, or would you rather just see more conventional prices and offerings? Let us know what you think in the comments below.