Tuesday, February 6, 2024
Attendees: Representative Director and President Shuntaro Furukawa, Executive Officer Hajime Murakami
*The main questions and answers at the financial results briefing (online) are as follows. Regarding the contents of the description,
Some additions and corrections have been made to make it easier to understand.
*When quoting part of the text, please be sure to clearly indicate the source or link to this file. Please...
Q1: The Nintendo Switch is now in its seventh year since its release, and was previously described as entering "uncharted territory."
Looking back at the period leading up to the end of the sales season, please tell us your evaluation of the Nintendo Switch business during the current period. Also, The strong Nintendo Switch business has an impact on the release timing of new hardware. I would also like to know if it works.
A1: 1 Representative Director and President Shuntaro Furukawa:
Last year, as Nintendo Switch celebrated its seventh year since its release, we celebrated the history of our dedicated game console business.
The company expects to sell 15 million hardware units and 180 million software units in the seventh year.
I explained that we were entering ``uncharted territory'' because there had never been a similar case. Under such circumstances, the sales letter for the current period
Looking back at the current situation, hardware sales have been steady since the first half, and there was a certain level of sales during the year-end sales season.
I think we were able to achieve results. Seven years after its launch, the platform continues to attract new customers.
However, by creating a good balance between new demand and demand for multiple units,
We have previously stated that we would like to continue the momentum of the business. During this year-end sales season, especially new
Many of our customers have picked up Nintendo Switch, and this will affect the future of Nintendo Switch business.
We also see this as a positive element.
Regarding software, although the overall sales volume was slightly lower than the same period last year,
"The Legend of Zelda Tears of the Kingdom", "Pikmin 4", "Super Mario Bros. Wonder"
We released new titles from our representative IP, such as Yahoo!, which were played by many customers. own company
From the perspective of continuing to release software, we will increase the popularity of these series going forward.
In that sense, I believe it has been a significant year.
Regarding new hardware, we are constantly researching and developing new hardware and software.
However, there is nothing more I can tell you. Also, as I mentioned earlier, recently,
Articles and speculations are reported, mainly on the internet, that appear to be information published by our company.
You may. However, all customers and investors are responsible for information that has not been officially announced by the Company.
It may also confuse you. Check out the information we send from our official website and SNS
We hope that you will make an appropriate decision based on this information. In addition, preparation of new hardware and
This is something that takes a long time and is carefully planned, so it is important to keep in mind the latest business situation.
Therefore, such plans will not be affected.
Q2:
In the current fiscal year, "The Super Mario Bros. Movie" was a hit, and "mobile/IP-related revenue, etc."
Sales have been strong, but what was the impact on profitability? Also, initiatives other than movies
How do you think sales of “mobile/IP-related revenue, etc.” will trend over the medium term?
Will it be?
A2:
Furukawa:
In addition to the increase in regular royalty income, the
Mobile/IP-related revenue, etc.'' sales decreased from the same period of the previous year due to sales related to
-B''.
There has been a significant increase in the ratio. Some of the revenue related to movies continues to be generated even after the movie is released in theaters.
Although there is some revenue, most of it is box office revenue from showings at movie theaters. Therefore, in the current fiscal year, we
We believe that the increase in sales of "Image/IP-related revenues, etc." is largely due to a temporary factor due to the release of movies in theaters.
vinegar. Billing revenue from mobile apps has decreased compared to the same period last year, but there is also the effect of movies.
Number of downloads and active users of `Super Mario Run'' and
`Mario Kart Tour'' increase
doing.
In the current fiscal year, operating income was
Profits increased. The reason for this is not only the exchange rate impact of the weaker yen, but also the
We believe that this is largely due to an increase in "related income, etc."
From a medium-term perspective, compared to when we began our full-fledged efforts to ``expand the number of people exposed to Nintendo IP,''
The amount of royalty income other than movies is also increasing and is continuing to grow. IP exhibition
Our top priority in our development efforts is to increase the value of Nintendo IP and create points of contact with customers.
The goal is to revitalize the dedicated game machine business, and in this field that has grown to its current scale,
We would like to work to ensure that we can generate stable profits.
Q3:
Regarding software sales, the number of sales for the popular title "Pokémon Scarlet" in the same period of the previous year was
Despite the release of ``Violet,'' sales have not fallen significantly compared to the same period last year.
I think "Super Mario Bros. Wonder" made a big contribution during the three months of the third quarter (October to December).
However, classic titles such as "Super Smash Bros. SPECIAL" and "Mario Kart 8 Deluxe"
It appears that sales of the product were also strong. Was it supported by increased exposure, including movie distribution?
A3:
Furukawa:
In the current fiscal year, we released `The Legend of Zelda: Tears of the Kingdom'' and
`Pikmin 4,'' which were released in the first half of the fiscal year.
The company's new releases such as "Super Mario Bros. Wonder" and "Super Mario RPG" released in the third quarter
Software sales were strong. In addition, with the release of the movie, Mario related products released before the previous
Sales of series titles also increased. “Splatoon 3” and “Pokémon
Compared to the previous fiscal year (ended March 2023), when “Scarlet Violet” was released,
Although the overall sales volume of clothing has decreased slightly, I believe that we have been able to maintain a certain level of sales.
“Super Mario Bros. Wonder” was the biggest driver during the year-end sales season, but at the same timeSales of titles by software manufacturers are also increasing, with a good balance of sales of both our own and other companies, new releases and standard titles.We were able to increase sales.
``Super Mario Bros. Wonder'' is growing sales at a faster pace than previous Mario series games.
I am. In addition to the fact that the content of the game itself has been well-received by customers, the game can be played by two or more people together.
I think the title is also a factor. Approximately half of the users of this title play multiplayer.
The game was played at the end of the year, and it probably matched the needs of a large group of people playing together at the end of the year, when people gather together.
I see it as a squid. In addition, ``The Super Mario Bros. Movie'' is being streamed around the world.
Streaming distribution is underway. Even though the theatrical release has ended, more and more people are seeing the new Mario movie.
We believe that this is one of the reasons behind the strong sales of ``Super Mario Bros. Wonder.''
I am.
Q4:
By subtracting the sales results up to the third quarter from the revised full-year forecast sales volume, the sales volume for the fourth quarter (January to March
It can be calculated that the expected hardware sales volume in February is less than 1.8 million units. This is the fourth quarter.
Although this is a very low level, do you think it is a reasonable number? In addition, the expected sales volume of hardware for the next fiscal year
I would also like to know your thoughts on this.
A4:
Furukawa:
Hardware sales are generally progressing as expected, but we would like to discuss the sales situation for the third quarter.
In light of this, we have increased our forecast sales volume for the year by 500,000 units. The outlook for the fourth quarter is basically the same as at the beginning of the period.
No changes have been made from the point. We hope that sales of the Nintendo Switch, now in its 8th year of release, will remain at the same level as before.
We believe that it is not easy to maintain this standard.
Regarding the expected hardware sales volume for the next fiscal year, we will announce the business results forecast for the next fiscal year when we announce the full-year financial results for the current fiscal year.
I would like to explain my thoughts on this, but basically the Nintendo Switch sales stand is already in "uncharted territory".
I think it will be difficult to increase the number next fiscal year (at the same pace as in the past).
vinegar. However, during this year-end sales season, many customers around the world are newly picking up the Nintendo Switch.
As a result, we were able to continue to maintain a high level of hardware operation. Next term too
Many companies and software manufacturers are planning to release new software, so
By continuing to emphasize the appeal of already released software, we will increase the momentum of the Nintendo Switch business as a whole.
We would like to maintain this.
Q5:
Since the release of Nintendo Switch, Nintendo's approach to the life cycle of hardware has changed.
I think it is. Differences from past platforms and what to focus on as we proceed with research and development of next-generation machines
I would like to know what you are doing.
A5:
Furukawa:
The major difference between Nintendo Switch and past platforms is that it differs from traditional handheld game consoles to
This is the integration of two platforms, the tabletop game consoles, into one. Thereby, soft
We are now able to concentrate our software development resources on Nintendo Switch. Continuously new software
The fact that we are able to release new products has resulted in a longer life cycle than in the past.
What we value most as we look to the future is to create new entertainment that is uniquely Nintendo and offers surprises.
Our goal is to provide the following. As we continue to offer Nintendo's unique entertainment, we are currently focusing on hardware.
We believe that a dedicated game machine business that integrates software and software is optimal, and we will continue to conduct research based on this policy.
We will continue to work on development.
Another point that is different from past platforms is that the Nintendo Switch
In collaboration with N.A., we have worked to popularize Nintendo Accounts. D
Tendo accounts are important points of contact for maintaining long-term connections with customers, and
Not only can it be used during migration, but it can also be used to help customers who have been away from the game for a while.
When a customer becomes interested in Nintendo's unique entertainment offerings, we connect with them again.
I believe that it is also important as a means to achieve this goal. From that perspective, a Nintendo Account is important.
I believe that this will continue to be the case.
Q6:
(At a management policy briefing held last November)
There was also talk about ``The Super Mario Bros. Movie'' being watched by many people. Movie
Based on the success of the Nintendo Switch, we plan to expand the Nintendo Switch console to regions where it is not currently sold.
Are you thinking of expanding your business?
A6:
Furukawa:
In the regions where "The Super Mario Bros. Movie" is shown and distributed, we will contact Nintendo.
It's much wider than the countries and regions where Switch is sold. Under such circumstances, Central and South America, especially Messenger,
In response to the favorable reception of ``The Super Mario Bros. Movie'' in Mexico, this year-end sales season
carried out promotions that focused more on Mexico than ever before. As a result, the hardware
While overall sales volume decreased, sales in Mexico increased. We also have sales channels in Southeast Asia.
We are expanding our business and are working to help more customers learn about Nintendo.
Masu. In these regions, we will first create connections with customers through Nintendo Switch and build upon that foundation.
I would like to utilize this knowledge in my future business.
Q7:
Please tell us a little more about how you would like to use the movie as an opportunity to expand sales in "other" regions.
I want to dig deeper. I think there are various bottlenecks when developing business in "other" regions.
I would like to know what kind of problems there are and whether there is a possibility of fundamentally solving them. In particular, hardware
I think the price of A is becoming an issue.What do you think?
A7:
Furukawa:
In "other" regions, the price of hardware is an issue for business development.
Up until now, it has been difficult to find a way to develop our business centered on dedicated game consoles, but this fiscal year
We now have an opportunity for people to experience our IP through a different medium: movies. games, including mobile apps.
Activities to increase awareness of Nintendo in such areas by utilizing means other than dedicated game consoles
It is becoming possible to do this.
Last year, we opened pop-up stores of the official store in Japan, in South Korea, Hong Kong, and Singapore.
The event was also held at malls, etc., and a large number of customers visited and purchased goods. Ma
Also, regarding theme parks, there are `Universal Studios Japan'' and
`Universal Studios''.
Following `Super Nintendo'',
`Super Nintendo'' will also be held in Orlando, USA, and Singapore.
- World” is scheduled to open.
Even in regions where hardware prices have been an issue up until now, IP has encouraged people to become familiar with Nintendo.
We hope that customers will be able to own and ultimately play on dedicated game consoles, which is our core business.
We will continue to carry out various initiatives in the future.
Q8:
Will The Legend of Zelda movie's story be based on an already released game or an entirely new one?
I would like to know if it will be a story.
A8:
Furukawa:
In November of last year, we began planning and developing a live-action movie based on The Legend of Zelda.
I announced what I had done. The producers of this film are Shigeru Miyamoto, our representative director and fellow, and Arad
Co-directed by Avi Arad, president of Productions Inc. and producer of many blockbuster movies.
To do. There is nothing I can discuss today regarding the release date or content of the movie, so please wait for further updates.
Please wait.
Q9:
Nintendo has a solid system in place for both dedicated game consoles and IP development efforts.
looks like. However, looking back at the past, we see that there have been many changes such as the introduction of other companies' hardware and the expansion of mobile games.
I think external factors also had an impact on Nintendo's business. Recently, new entertainment has appeared.
The field, and the game itself, continues to change. In the external environment surrounding Nintendo's business,
Please let me know if there are any risks that I should be especially careful about in the future.
A9:
Furukawa:
We always approach our business every day with a strong sense of crisis. Dedicated game machine business
Changing the generation of platforms is not an easy task. A successful platform
I have experienced many difficult times after the form, so I have no idea that the current situation is rock solid.
there is no. Furthermore, as you have pointed out, our business is constantly exposed to intense competition. widely entertained
- In terms of entertainment, it's not just video games, but a lot of other forms of entertainment that are competing with each other.
It's an ugly industry. Under these circumstances, we will continue to offer unique proposals so that our customers can choose us.
Now more than ever, you need to be a brand that stands out.
In order to continue proposing original entertainment that can be enjoyed by customers all over the world, we must continue to develop both hardware and software.
We believe that the best strategy at this point is to continue our integrated dedicated game machine business. That idea
We are conducting a variety of research and development activities under the company, but our products, which are not daily necessities, need to be interesting.
If you do that, they won't turn around right away. Therefore, we want to make Nintendo familiar even in places other than dedicated game consoles.
We will continue our efforts to make Nintendo IP feel good, and we hope that customers who continue to support Nintendo IP over the long term will continue to do so.
We recognize the importance of increasing our customer base and maintaining connections with our customers.