Satoru Iwata's Investor Briefing this week included a few surprises and, in limited detail, some of Nintendo's key strategies for the coming year and beyond. Yet it was the final announcement that caused the most head-scratching and, not surprisingly, didn't prompt investors to rush to buy up Nintendo shares; Nintendo does plan to buy up to ten million shares before 1st April, so perhaps that'll be unintentionally beneficial. Satoru Iwata gave an exceptionally vague outline of a Quality of Life (QOL) business platform, with an emphasis on "non-wearable technology". While the Nintendo President likely didn't literally nudge and wink, that was the effect of the tease, with the statement that this platform will be entirely separate (at least initially) from Nintendo's console business, demonstrating that the company is ready to diversify its portfolio of products.
The language around the announcement was undoubtedly positive, and Nintendo seems confident that this product could be a major worldwide success, as Iwata-san highlighted how the exceptional popularity of the Wii and DS — with unique related software such as Brain Training and Wii Fit — had formed new audiences through innovation. The term "Blue Ocean" was used multiple times, and most strikingly the promise is that this product will bypass current technology trends, being neither console, smart device or "wearable" technology. As this QOL platform will be focused on health and well-being, that immediately brings to mind the current wearable trends of pedometers, sensors and various gadgets (from prominent companies such as Nike) typically strapped to the arm or elsewhere when exercising. Beyond that, Google Glass is all the rage, for those that like the idea being "connected" all of the time — that seams like another step towards an Orwellian dystopia, with the NSA no doubt spying on your eyeballs, but we digress.
This health-focused platform from Nintendo isn't a particularly distant project, either, with confirmation that'll it'll be revealed in detail this year, along with a planned release in the 2015 / 2016 financial year — in the 12 months after 1st April 2015, in other words. And so it won't be long before we're contemplating Nintendo's innovation and anticipating a market-disrupting product, or wondering if it's a platform destined to struggle. With Nintendo, it can be exceptionally difficult to speculate on what's next.
Yet still, we've done a little digging and considered what "non-wearable" technology could mean in this Quality Of Life context, and explored how Nintendo may bring its expertise as an entertainment business to existing and developing health products that fall under that context.
If you can bear with us, let's consider some technology and platforms that are relatively recent innovations in health care, and which appear relevant to what Nintendo seems to be aiming to achieve. We'll consider two major companies and their products — Alere Ltd and Johnson & Johnson.
You've likely heard of the second name, as Johnson & Johnson is a major player in mainstream consumer products, including shampoos, cosmetics etc. Beyond that public face, however, is a significant business in medical devices, with corporate and public health products. One example of its various health products relates to managing diabetes with easy to use testing equipment for checking blood sugar / glucose levels. For those suffering from diabetes, checking these levels is absolutely vital for day-to-day well-being, and portable, instant results devices have been around for a number of years.
However, as you can see in the video below, new products such as the OneTouch Verio Sync allow users to not only record their results over a number of days, but to check trends and results in a smart device app while also being able to easily send data to others by text or email, be they friends, family or medical professionals.
Now, let's move onto Alere Ltd. One primary part of its business is Telehealth Managed Services; in basic terms this is a combination of hardware and software (online-enabled, particularly) that opens up possibilities for patients to use equipment for monitoring conditions in the home, and the device in question automatically sends the results to the relevant nurses and doctors. It's a little like OneTouch Verio Sync, but focused more on automation and replacing trips to clinics and hospitals with a remote diagnostics approach. For example, someone with a heart condition can measure key symptoms with an easy-to-use piece of equipment in the home, and if any results are of concern the relevant medical professionals see the data and can act accordingly. In some case nurses may visit homes to use the technology, but the emphasis is increasingly shifting to patients using the equipment themselves.
For an example of how this approach is becoming a reality, Alere Ltd products are being implemented in the UK with Local Care Direct, with the below text being a mission statement, of sorts, for its Telehealth service.
Local Care Direct is leading the way in the development of innovative services to support people with long term conditions at home, empowering them to manage their own health and avoiding unnecessary hospital attendances and admissions.
What do these technologies and products mean for Nintendo? Well, let's take "non-wearable" a little less literally, and consider that this could relate to activities being unimpeded by any gadgetry, and then equipment coming into play at key points — in the home — to assess progress. With the medical industry having portable devices for measuring aspects from blood sugar, blood pressure, heart rate and various key areas of diagnosis, perhaps this Health product from Nintendo will focus on specific areas after prompting the user to do various activities as they please, and then check-in with their QOL hardware — which is set to be entirely separate from the Wii U and 3DS, remember — to get results, readings and participate in activities.
In fact, these ideas sound like a more hi-tech, actually useful version of the much-maligned and never-released Wii Vitality Sensor. Let's not forget that only last Summer Satoru Iwata highlighted that the sensor was dropped in its initial form as the technology wasn't reliable enough — it only worked roughly 90 out of 100 times — but that Nintendo would "like to launch it into the market if technology advancements enable 999 of 1,000 people to use it". This wasn't a wearable device that you'd wear all of the time, but one you'd access at appropriate moments.
We're not suggesting that the Vitality Sensor is this QOL platform — especially as it was to be a Wii accessory, not a standalone platform — but that it was an early indication of the product ideas within Nintendo over a number of years. Technology has advanced a great deal since then, and with major medical device companies producing ever-cheaper, multi-functional and small devices that measure key aspects of our bodies and their health, Iwata-san's words about working in more detailed collaborations with other companies provide a potential indication of what's happening behind the scenes; this, again, is from this week's Investor Briefing.
After Nintendo started the manufacture and sale of Hanafuda (traditional Japanese playing cards) 125 years ago, it has innovated itself from a playing card company to a toy company, a toy company to an electronic toy company and an electronic toy company to a company running video game platforms. What has remained the same, however, was we always tried to create something new from materials and technologies available at that time and to position entertainment as our core business.
...In addition to self-innovation, we have shaped our future by collaborating with various outside partners which we saw as appropriate at the time in order to adapt to environmental changes. Such collaboration has been a part of all our operations from research and development to manufacture and sales. In addition to our own efforts, collaborating with good partners will be one important way to adapt to the recent dynamic changes surrounding video games.
And below, a key segment about the goal of this new product.
However, what is generally good for health requires some kind of effort to be made by the individual, and, as I am sure that many of you have experienced this, it is sometimes difficult to stay focused and engaged, and it is not uncommon to give up after a few days. This is where our strength as an entertainment company to keep our consumers engaged and entertained comes into play, assisted by the non-wearable feature, which is the biggest differentiator of this new business field, as well as user experiences that integrate into people's daily lives, all of which help us overcome this difficulty. If we do indeed succeed in doing so, we will be able to provide feedback to our consumers on a continual basis, and our approach will be to redefine the notion of health-consciousness, and eventually increase the fit population.
While it's indeed reasonable to speculate that this QOL product could be a Kinect-style camera that tracks the consumer during exercises, there are two aspects that make that seem unlikely. It wouldn't be much of an innovation and market-changer, and Nintendo repeatedly states that it seeks to innovate and go its own way. In addition, that would seem more like a Wii U add-on, not an entirely new platform.
And so, the non-wearable medical technology we've referenced seems like a reasonable deduction, based on what's been said. Satoru Iwata has made a number of key points central in his briefing.
- The company is developing a new "Blue Ocean" platform that will be innovative, and separate from existing Nintendo hardware.
- It will focus on Quality Of Life and Health, will be "non-wearable" technology.
- Nintendo will utilise its experience as an entertainment company to keep users engaged with the technology.
- He emphasized that Nintendo has a history of innovating with available technology.
- It was made clear that Nintendo will continue to form partnerships and work with external companies, utilising their expertise.
We may be entirely wrong, as Nintendo can be notoriously difficult to predict in the Satoru Iwata era, but these ideas of small, accessible devices in the home for checking an individual's health is an industry increasing in size. From a medical device perspective, companies such as Alere Ltd and Johnson & Johnson — along with others — are reacting to increasingly strained health-sectors around the world. Populations are increasing, people are living longer, and unhealthy lifestyles increasingly make issues such as obesity expensive to treat. Hospitals, clinics and medical professionalw will continue to face increasing demand and stretched resources, so it's no wonder that devices that allow patients to monitor themselves from home are valuable; it frees up time for doctors and nurses, and is invaluable to patients that can't easily travel, in particular. With wireless communication, hardware and software, procedures that used to require patient visits can now be performed remotely, quickly and with far greater convenience.
Nintendo, for its part, is an entertainment company, but these trends and technologies could conceivably lead to a platform that helps consumers to monitor their health, aligned to enjoyable exercises. It could be like a more advanced, multi-dimensional Wii Fit Meter, in practice — that device, with the software, takes your steps and exercise data and converts them into a mini-game of walking to virtual landmarks. Nintendo's idea is likely to be far more bold, but the concept of taking what can be a dull experience of monitoring health and applying the process of gamification — to make everyday activities more fun — certainly has potential. The fact it'll be its own platform will also allow Nintendo to broaden its horizons and, importantly, make the product accessible to everyone. By not limiting the technology to console owners, it could be that "Blue Ocean" product that Nintendo desires.
If Nintendo can make improving and monitoring an individual's health "fun", while utilising technology that is convenient and unobtrusive in day-to-day lives, then we certainly have interesting times ahead.