Satoru Iwata's Investor Briefing contained some intriguing proposals, and one that may become particularly important for enthusiastic gamers is a plan to introduce a new pricing structure for titles on Nintendo's systems.
Nintendo aims to introduce new sales mechanisms to break out of the relatively flat current retail pricing structure, potentially rewarding those that promote, share and buy more games. Although a medium-term objective, Iwata-san has stated that there are plans to experiment with these ideas on the Wii U "at an early stage".
The way in which dedicated video game systems and their software are sold has not changed significantly since the business model of dedicated video game platforms was first established 30 years ago. Dedicated video game systems are sold for two hundred or three hundred dollars, on which standalone software titles are distributed for 30 or 50 dollars. This simple model received widespread support from consumers that enabled us to create today’s market. The decision to change it is the manifestation of our recognition that we cannot expect this model to work forever amid dynamic changes in people’s lifestyles.
If we succeed in the redefinition of video game platforms that I speak of today, our account-based connections with consumers will become very clear. For example, until now it has been taken for granted that software is offered to users at the same price regardless of how many titles they purchase in a year, be it one, five or even ten titles. Based on our account system, if we can offer flexible price points to consumers who meet certain conditions, we can create a situation where these consumers can enjoy our software at cheaper price points when they purchase more. Here, we do not need to limit the condition to the number of software titles they purchase. Inviting friends to start playing a particular software title is also an example of a possible condition. If we can achieve such a sales mechanism, we can expect to increase the number of players per title, and the players will play our games with more friends. This can help maintain the high usage ratio of a platform. When one platform maintains a high active use ratio, the software titles which run on it have a higher potential to be noticed by many, which leads to more people playing with more titles. When we see our overall consumers, they generally play two or three titles per year. We aim to establish a new sales mechanism that will be beneficial to both consumers and software creators by encouraging our consumers to play more titles and increasing a platform’s active use ratio without largely increasing our consumers’ expenditures.
Nintendo aims to work on this brand-new sales mechanism in the medium term, but we would like to start experimenting with Wii U at an early stage.
Some promotions from Nintendo in the past hint at the concept of rewarding product loyalty, for example offers that provided a free eShop game when a number of others were registered on Club Nintendo, eShop credit for buying certain downloads, or offering specific discounts on one title when another is downloaded. Those ideas have happened already, in limited form, from Nintendo and smaller developers on the eShop platforms, but it'll be interesting to see what the company implements that is consistently applied for multiple games on a permanent basis. The concept of rewarding those that share and convert others has also been tried in the past with the Wii Ambassador Programme, encouraging owners to help others connect their systems online.
What kinds of "sales mechanisms" would you like to see from Nintendo?