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[Nirolak]

Well, they are starting to recognize that a lot of kids are essentially getting free gaming devices by virtue of old smartphones.

Question: I do understand that Nintendo is planning to improve its performance with Wii U and Nintendo 3DS for this fiscal year and the next, but in the long term, I, as a video game fan who wants Nintendo to keep on running a game business, am worried that Nintendo might be going to become a manufacturer of health devices in the future. I would like to own Nintendo stock for as long as ten years, so please show game fans like me something that will convince us that the game business will have a bright future in that period. It seems to me that the hardware-software integrated platform business will not last forever. Is Nintendo not going to change this business model? If not, I am concerned that failure of the next hardware system could be critical. In order to wipe away my anxiety, I would like to hear about Nintendo’s dreams for the future, especially from Mr. Miyamoto.

Miyamoto: Thank you so much for expecting a lot from the future of the game business. My comment relates to the comment made by another shareholder today, and I believe that these kinds of questions on video games from shareholder are not irrelevant to our company management. This is because, for an entertainment company like Nintendo, the most essential question is not to improve our profitability but how to maintain a high level of sales and sustain the company over a timespan of, for example, 10 years. The entertainment business inherently has a lot of ups and downs. When I joined the company over 30 years ago, Nintendo had a great amount of debt loans. Now, it is sometimes said that Nintendo is too cash-rich, but this is essential for us to try new endeavors. I am sorry for the shareholder who just asked this question, but I cannot predict what is going to happen 10 years from now. It is true that I have a sense of fear in that “hand-me-down smartphones,” as pointed out by another shareholder, are becoming hardware systems on which to play games due to their prices being lower than that of our most inexpensive video game system in our history. However, I do not believe that will completely control the future of video games. Of course, it is important to gain profit in effective ways, but Nintendo always has to take seriously, for example, network security for children. Taking into consideration that more and more children have a good command of these kinds of media, which help these media to spread, the most important task for Nintendo is how to provide new styles of entertainment by using these technologies, and how to make these new kinds of entertainment yield significant sales and profits. It goes without saying that Nintendo has been trying to improve its profitability at the same time. For example, at E3 this year, we were able to obtain more page views on our website while considerably reducing our E3-related costs.

About the prospects of “ten years from now” (which were mentioned in the question), I believe it will work itself out because new forms of entertainment are always born. But, we always need to work with a clear consciousness that we have to act now to make that happen. This consciousness is mounting high among people at Nintendo now, so please wait for our next move. I believe the appeal of video games is not transient and human beings have an instinctual love of games. I would like to keep on producing new products that surprise people all over the world.

Source: http://www.nintendo.co.jp/ir/en/stock/meeting/140627qa/03.html

 

[Currygan]

Miyamoto's up 3%, always keeping it straight to the core point

 

[Nirolak]

Miyamoto's up 3%, always keeping it straight to the core point

If you're talking about approval ratings, Miyamoto was down 6% and Iwata was the one up 3%.

 

[TacticalFox88]

I mean there will always be a market for a dedicated handheld, but the glory days are pretty much over and will never come back.

 

[1000 Branches]

He didn't actually answer the question beyond a general 'please be excited for our next move.'
I mean, yes, it seems like they are aware of the issues, and they are working on, well, something, but he didn't really go more in depth than that, did he?

 

[Nibel]

The game has changed; next years will be super interesting.

 

[Nirolak]

He didn't actually answer the question beyond a general 'please be excited for our next move.'
I mean, yes, it seems like they are aware of the issues, and they are working on, well, something, but he didn't really go more in depth than that, did he?

Correct, that's why I said they're "starting to recognize" as opposed to actually like... responding with a significant action plan.

 

[Relaxed Muscle]

While they are acknowledging it, I feel they are still kinda missing the point.

 

[Uncle Rupee]

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

 

[Jinko]

Nintendo's move !!

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

But that seems almost like the PC space, I think it will put a lot of people off due to complexity, should be good for people with some technical knowledge though.

 

[StoOgE]

Just becoming aware of a problem eating into your marketshare for the last 6 years.

 

[Sir Blaming]

Its nice to see that Nintendo is not going the mobile route yet(and never, hopefully).
And I thought the fact that they have a buttload of cash that they could fail at least 2 generations(?) is already a fact?

 

[StoOgE]

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

Probably the same way the disposable laptop culture of the late 90s early 2000s dealt with it. Or the desktop market before that.

Eventually people will stop upgrading because they don't see the advantage of the new hardware as being worth the cost.

 

[GregLombardi]

Probably the same way the disposable laptop culture of the late 90s early 2000s dealt with it. Or the desktop market before that.

Eventually people will stop upgrading because they don't see the advantage of the new hardware as being worth the cost.

Yup.

 

[duckroll]

But there's almost no "cost" for the majority of consumers. It's not comparable because we're talking about hardware which is basically being driven by a contract service which everyone needs to have. Most people don't go out of their way to get new phones every 1-2 years because they feel like it. They do it because it's an added benefit of renewing a phone contract.

 

[Tomohawk]

I guess its good they recognize the problem, but they should have been at this stage in 2011 if not earlier.

 

[SmokedMeat]

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

I guess it's going to last until something better comes along. I don't see that happening for a very long time.

 

[udivision]

Just becoming aware of a problem eating into your marketshare for the last 6 years.

Gotta be a gen-length behind on nearly everything.

 

[McHuj]

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

I think modular phone are DOA if they even make it to market in the first place.

Upgrade cycles may lengthen in the near future as innovation slows down however.

 

[Krejlooc]

Is there any way to find out how things like the Moga Power Pro or similar smart phone controllers are selling? I'm shocked at how much content on android supports a gamepad. With a Moga Power Pro, there is honestly little difference between my 3DS and Vita and my smart phone in terms of the experience of playing games.

 

[SmokedMeat]

I'd say innovation has slowed considerably. My 4S doesn't seem to be missing out on many important features.

 

[User Tron]

I mean there will always be a market for a dedicated handheld, but the glory days are pretty much over and will never come back.

I've been thinking about this and maybe that's not true. Smart phones are quite expensive and people who buy them are less willing to buy additional hardware for gaming simply because the already spent a lot and the phone is at least good enough for some games. But cheaper smart phones are getting better and better and Joe Average doesn't need any more features. Imho the urge to buy a new phones is that great anymore in comparison to a few years ago. So there might be a chance that some of the "smart phone budget" will return to gaming if it offers something interessting.

 

[Fox Mulder]

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

it'll last until a better method comes along for the phone companies.

consumers are conditioned to get a new phone with a new contract even if it costs them more in the long run. I've done it for so long that paying retail price upfront for a phone seems goddamn insane.

 

[Currygan]

If you're talking about approval ratings, Miyamoto was down 6% and Iwata was the one up 3%.

yeah I meant it as a reference joke, implying that with such level headed comments his AR would get up again

I'm not good at those :/

 

[Mockingbird]

Nintendo was able to reduce the cost of their E3 and come out at #1 at E3 this year? Talk about winning.

 

[Krejlooc]

I'd say innovation has slowed considerably. My 4S doesn't seem to be missing out on many important features.

For conventional gaming. In the very near future (like, maybe as early as 2015) we're going to start seeing phones built specifically to interface with VR headset shells. You can bet on at least Samsung coming out with one (and given Google Cardboard, I'd imagine the Nexus line will start transitioning toward that as well).

A lot of the Galaxy S5's specs sound like they're made with VR in mind.

 

[duckroll]

I've been thinking about this and maybe that's not true. Smart phones are quite expensive and people who buy them are less willing to buy additional hardware for gaming simply because the already spent a lot and the phone is at least good enough for some games. But cheaper smart phones are getting better and better and Joe Average doesn't need any more features. Imho the urge to buy a new phones is that great anymore in comparison to a few years ago. So there might be a chance that some of the "smart phone budget" will return to gaming if it offers something interessting.

It's not a budget issue at all, it's a functionality issue. Why carry another device around just to play games if you're happy with mobile gaming for time wasting on the go?

 

[User Tron]

But there's almost no "cost" for the majority of consumers. It's not comparable because we're talking about hardware which is basically being driven by a contract service which everyone needs to have. Most people don't go out of their way to get new phones every 1-2 years because they feel like it. They do it because it's an added benefit of renewing a phone contract.

Prices for phones at renewals are getting worse and worse where I live. Lot of my friends are not taking a phone to the contract anymore.

 

[shinra-bansho]

I've been thinking about this and maybe that's not true. Smart phones are quite expensive and people who buy them are less willing to buy additional hardware for gaming simply because the already spent a lot and the phone is at least good enough for some games. But cheaper smart phones are getting better and better and Joe Average doesn't need any more features. Imho the urge to buy a new phones is that great anymore in comparison to a few years ago. So there might be a chance that some of the "smart phone budget" will return to gaming if it offers something interessting.

People aren't forgoing handhelds because of budgetary concerns, they're less willing to buy additional devices because their smart-device suffices to meet their requirements. That isn't changing as phones become cheaper, any more than a resurgence in digital cameras.

Besides for people on plans, smartphones can essentially be free. For the children of those people, hand-me-down smartphones are free.

 

[Casimir]

Just becoming aware of a problem eating into your marketshare for the last 6 years.

Or, finally admitting that there is a problem eating into their market share.

Either way its good to have confirmation that they are not oblivious to the changing market.

 

[User Tron]

It's not a budget issue at all, it's a functionality issue. Why carry another device around just to play games if you're happy with mobile gaming for time wasting on the go?

Handhelds are mostly played at home or on vacation. Even at the heights of the DS I rarely saw people play outside.

 

[Krejlooc]

It's not a budget issue at all, it's a functionality issue. Why carry another device around just to play games if you're happy with mobile gaming for time wasting on the go?

This is exactly why I play my mobile games - because they're there with me when having a 3DS or vita in my pocket would be inappropriate. I can slide my phone out of my slacks on the bus downtown, I'm much less comfortable holding a vita in my pocket along side it.

When I'm on the go, I use touch or tilt controls (and I mainly play games built for the quick bursts a bus ride provides) and then, when I get home, I throw on my gameklip or Moga Power Pro if I want to do more traditional gaming.

And if I'm going on a road trip, since I'm so invested in my phone already, it makes more sense for me to bring along my phone controller instead of a 3DS or vita.

 

[unbias]

I wonder if AT&T's contract changes will have any impact on the economy of handhelds. I wonder if there already has been an impact. Maybe there has been some research done on it already, but I cant find it.

 

[outunderthestars]

I bought one of these for $49 a few weeks ago. Let that soak in for a bit. $49. WITHOUT A CONTRACT 4.5" HD screen, quad core processor, GPS, Camera, 8GB of storage, hundreds of thousands of apps, thousands of free or low cost games, etc.

$49.

As a parent, it is hard to justify spending $130, or $200 on a 2DS/3DS and $40 on games when I could buy my kid a more versatile device for $50.

edit: added the fact that it was a non-contract phone.

 

[Abounder]

Not only are kids getting 2nd hand phones but it's arguably a much easier way to learn how to play too. Using a controller with sticks, triggers, buttons, etc. takes more time to become experienced at.

Plus phones can do so much more than a Nintendo console. They have far better value. Consoles and joysticks will become enthusiast machines by comparison.

I question how long this disposable smartphone culture can last. Already there are plans to introduce modular phones, which will help to curb this ridiculous and unsustainable practice of upgrading to a new phone every 1 or 2 years. It's so wasteful.

I think it'll keep going. Apple is just now rolling out bigger phones and their budget phones are relatively new too. And Facebook's Oculus Rift will probably be another tech race between phones because you just know someone is going to try and offer a VR-ready phone for portable experiences. Even Amazon is getting into the market

 

[Krejlooc]

Handhelds are mostly played at home or on vacation. Even at the heights of the DS I rarely saw people play outside.

My 3DS has TV out.

I can count on one hand the number of times I've played my 3DS outside the house. In fact, I prefer to play handheld system games on my TV if at all possible. I like handheld games, just not the handheld form factor. I suspect i'm not alone.

I think it'll keep going. Apple is just now rolling out bigger phones and their budget phones are relatively new too. And Facebook's Oculus Rift will probably be another tech race between phones because you just know someone is going to try and offer a VR-ready phone for portable experiences. Even Amazon is getting into the market

This is exactly what Samsung is getting ready to do with things like GearVR.

 

[L~A]

Probably the same way the disposable laptop culture of the late 90s early 2000s dealt with it. Or the desktop market before that.

Eventually people will stop upgrading because they don't see the advantage of the new hardware as being worth the cost.

Problem is: hardware manufacturers are agressively pushing for that kind of business model (replacing your phone every 1-2 years max). There's those "plans" with carriers, making people believe their brand news iPhone isn't THAT expensive.

And there's also programmed obsolescence, which is a reality.

I think we're far from being out of the "buy a phone every 1/2 years" cycle. If that was the case, battery life wouldn't suck so bad on most phones.

***

As for Nintendo, it's pretty clear we won't know about their actual strategy until they're ready to show their new consoles.

And I find it a bit untrue to say Nintendo hasn't been doing anything, or is just realising smartphones are a menace :

- ever since 2011, Iwata said that to survive against social games, they had to really focus on quality experiences that can't be found on smartphones, which is what they've been doing ever since (much less focus on Kawashima and co)
- they've been building tools to make porting from iOS/Android super easy, and that's something that will only be fully realised on their new hardware
- they've been courting indies like crazy, a good thing since consoles are much better for indies (no insane competition compared to smartphones).
- they got plans to use smartphones to promote their games
- more things they're not ready to reveal yet (because not ready, afraid they'll get copied, etc...)

Whether this is enough/adequate is open to debate, but they haven't stayed without doing anything. But since Nintendo's always shrouded in total secrecy, it does look a bit that way, I'm not denying that.

And I don't agree with Miyamoto statement that phones are less expensive than their latest consoles... because they aren't. Not the popular phones most people are buying. Far from it. The main problem is that phones are tools, allowing you to do lots of things, and is pretty much a must-have. It's virtually impossible to avoid owning a phone nowadays.

Whereas consoles... well, you don't. They've always been 100% optional, and now, the "necessary" devices can do stuff the optional ones can. This is, in my opinion, a much bigger factor is the swtich the mobile platforms.

Besides for people on plans, smartphones can essentially be free.

That's the thing: it's just an illusion. Phones aren't free, even with plans. In fact, plans often make the phone more expensive than alone without one (there was a study in France a few months ago about that... in some cases, the price of the phone was almost doubled with a plan). But of course, people don't realise that, they thing they got a real deal... hence the buy a new phone frequently.

 

[BlackJace]

Pretty freaking late to be acknowledging this, but at least they recognize that it has and will continue to encroach onto their territory.

 

[duckroll]

Prices for phones at renewals are getting worse and worse where I live. Lot of my friends are not taking a phone to the contract anymore.

Handhelds are mostly played at home or on vacation. Even at the heights of the DS I rarely saw people play outside.

This doesn't sound very accurate as far as the larger market goes.

 

[User Tron]

This doesn't sound very accurate as far as the larger market goes.

Did you see a lot of people play outside with their DSs? Average prices of usable smart phones are going down fast wouldn't you say?

 

[Krejlooc]

Do places like Europe upgrade their phones on regular cycles like we do in the US? I'm wondering if the upgrade cycle is tied to the way brands of phones are locked to carriers. That sort of thing helps breed the idea that phones are disposable. You can use a phone with any carrier in Europe, right? Does that affect the degree by which their phones are disposable? Do carriers still subsidize phones in Europe?

Did you see a lot of people play outside with their DSs? Average prices of usable smart phones are going down fast wouldn't you say?

I see way more kids - not just people but specifically kids - with ipads or iphones than DSes, 3DSes, PSPs or vitas.

 

[SmokyDave]

I refuse to believe that they're only just figuring this stuff out. I think it's likelier that they'd rather not admit they're being run over by a juggernaut and have no idea how to get out from under the wheels.

 

[orthodoxy1095]

I bought one of these for $49 a few weeks ago. Let that soak in for a bit. $49. 4.5" HD screen, quad core processor, GPS, Camera, 8GB of storage, hundreds of thousands of apps, thousands of free or low cost games, etc.

$49.

As a parent, it is hard to justify spending $130, or $200 on a 2DS/3DS and $40 on games when I could buy my kid a more versatile device for $50.

You are however, discounting the costs of a phone plan which can range from a good deal to an astronomical price tag. Still, I definitely agree with the issue here. If we assume that the handheld market should at least largely be propped up by "younger people," then yeah, most parents are going to have trouble justifying the cost.

Honestly, you see kids with iPads and iPhones everywhere. But in the last month, I've seen maybe two or three kids with a 3DS.

 

[Aaron D.]

As a parent, it is hard to justify spending $130, or $200 on a 2DS/3DS and $40 on games when I could buy my kid a more versatile device for $50.

Yeah, I saw this coming from a mile away when I noticed my friends passing down their early-adopter iPhones and iPads to their young children.

You want to quiet down a fussy 4-8 year old? Hand them an iPad. It's like magic.

Witnessing this first hand years ago was like witnessing the death of dedicated handheld gaming.

 

[Nirolak]

Just so we're all on the same page about what smartphones have done to handhelds, here's gen over gen for the US for the 3DS versus the DS and PSP: http://www.neogaf.com/forum/showpost.php?p=116963900&postcount=3002

         3DS 2013   PSP 2007   NDS 2007
January      145        211        239
February     189        176        485
March        230        180        509
April        113        183        471
May          114        221        423
June         225        290        561
July         150        214        405
August       130        151        383
September    220        285        496
October      452        286        458
November     770        567       1530
December    1100       1060       2470
            3838       3824       8430
                        
         3DS 2014   PSP 2008   NDS 2008
January       97        230        251
February     155        243        587
March        159        297        698
April        106        193        415
May           97        182        452
June                    337        783
July                    222        608
August                  253        518
September               238        537
October                 193        491
November                421       1570
December               1020       3040
             614       3829       9950

 

[Krejlooc]

I refuse to believe that they're only just figuring this stuff out. I think it's likelier that they'd rather not admit they're being run over by a juggernaut and have no idea how to get out from under the wheels.

Remember when some developer was communicating to Nintendo about how they wanted their account system to behave similar to Xbox Live and PSN, and the engineer he was speaking to said he'd never played an Xbox 360 or Playstation 3 before?

 

[Mooreberg]

On top of the "hand me downs" being very capable devices (this year it will be devices like iPhone 5, Galaxy SIII, Galaxy Note II), many people opt to get a phone that is a year older and costs close to nothing on contract. I'm not aware of a mainstream mobile game that the HTC One M7 cannot run reasonably well, and you can walk into a Best Buy right now and not pay anything for it upfront.

This to me seems like an impossible situation to compete with in terms of the casual consumer. The hardware is powerful, often close to zero dollars out of pocket, and a lot of the gaming revenue is driven by titles that are free to play. People just accept it as a fact of life that they are going to pay out the ass for limited data allotments.

 

[phanphare]

I thought this was interesting

For example, at E3 this year, we were able to obtain more page views on our website while considerably reducing our E3-related costs.

 

[unbias]

I refuse to believe that they're only just figuring this stuff out. I think it's likelier that they'd rather not admit they're being run over by a juggernaut and have no idea how to get out from under the wheels.

They've known it for a long time, but they might not have thought the gaming trend on smartphones would rise(Thanks to the F2p model I'd say). Handhelds need to find a reason to be needed besides just games or tablets will swallow up the rest of the handheld market. Tablet gaming right now is pretty solid, the handheld market is probably a zombie economic business model at this point.

 

[duckroll]

Did you see a lot of people play outside with their DSs? Average prices of usable smart phones are going down fast wouldn't you say?

Yes I saw people with DSs and PSPs all over the place back in the day. On trains, on buses, everywhere. These days it's mostly smartphones and tablets with a rare sighting of a 3DS or Vita.