Today Nintendo published the transcript of the Q&A hosted yesterday as part of its fiscal year results announcement, providing insight from President Shuntaro Furukawa.
While the transcript is in Japanese only at the moment, it includes some interesting tidbits about the company's business and plans.
Furukawa-san mentioned that user growth has slowed done compared to 3-4 years ago, and he believes that Nintendo is at a stage where it has to prioritize maintaining high utilization rates while also attracting new users. The utilization rate of game consoles tends to be affected by the release of new major games, so the company will continue to focus on that. They also believe that they need to continue providing new opportunities for customers to play with the Switch, rather than relying solely on new releases.
Furukawa-san does not believe that there is no need to launch a next-generation console just because a certain number of yearly users has been achieved. While this is not the right time to talk specifics about the next-generation, Nintendo is always thinking about how they can bring forth new and unique entertainment experiences and developing a variety of products for the future.
When they do launch a new generation console, it'll be extremely important to do so while maintaining a high number of customers that play on Nintendo's consoles. However, at this stage the priority is to maintain and expand the usage of the Nintendo Switch, alongside the momentum of the business.
Furukawa-san was also asked about the fact that the Nintendo Switch was originally mentioned two year before its release as the NX, and whether the next-generation console will also have a two year gap between the first official mention and release. He explained that the announcement of the NX was made alongside the reveal of Nintendo's efforts on the mobile market, so the company needed to let people know that it would continue to focus on consoles as its core business. Due to that, the two year gap was a somewhat special case. Nintendo will strive to provide information for both new hardware and software at the right timing for each product.
Speaking of The Super Mario Bros. Movie, Furukawa-san mentioned that it's a catalyst for people to become interested in Mario games, which will positively impact Switch hardware and software sales. In fact, Nintendo is already seeing positive results in various areas, including merchandise and the sales of classic Mario games. In the longer term, they think the movie is an opportunity to make Mario fans of those who have never played the game or those who have played before but have since left the fandom.
For the future, the company intends to continue working on various film productions and carefully develop each IP while respecting its individuality, revitalizing the core business of gaming consoles by increasing the number of people who come in contact with the characters and worlds of Nintendo's IPs.
Speaking of hardware prices, Furukawa-san admitted that the manufacturing cost of some components has reduced, but overall costs remain high, while the company needs to keep in mind the effect of inflation and exchange rates. The company had a hard time procuring materials in the past fiscal year, so it will strive to maintain a margin of safety in the procurement to ensure the stability of production. Even if the cost of material does drop, it'll take some time for it to reflect on overall manufacturing costs. As such, there is no plan to reduce hardware prices to the customer during the current fiscal year (until March 2024). On the other hand, there is also no plan to increase prices, but will continue to monitor the situation closely since the yen has been weak for a long time and procurement costs are still high.
Furukawa-san also addressed the price of The Legend of Zelda: Tears of the Kingdom, which is $10 higher in the United States compared to its predecessor. This doesn't mean that Nintendo is increasing software prices in general. The basic policy is to determine prices on a case-by-case basis. That being said, it's true that development prices are trending upward due to technology getting more advanced, so the company will carefully consider the pricing of each game going forward.
Lastly, the executive mentioned that the target of 15 million Switch units to be shipped in the current fiscal year is easy to achieve, as it's a 16.5% drop year-on-year compared to the previous decrease above 20%. Yet, company has been working hard since the beginning of the fiscal year to achieve it. Nintendo would like to achieve its sales plans by taking advantage of the acceleration created by The Super Mario Bros. Movie and The Legend of Zelda: Tears of the Kingdom and aims to maximise sales during the Holiday season.
