Satoru Iwata, the president of Nintendo, and Isao Moriyasu, the president of DeNA, held a joint press conference today to announce their plans for a collaboration on mobile devices, and to explain their business and capital alliance. You can watch video of the conference, translated into English, above.
Iwata began by acknowledging the general outlook for the video games industry. He noted that people have been pessimistic about the future of dedicated video game systems. Blaming the company’s shaky transition from the DS to 3DS and the Wii to Wii U on a strong yen, he pointed out that the handheld had been a success anyway. “We recognize that our business model of producing both video game hardware and software is effective even today, and we do not share this pessimistic view of the future for dedicated video game systems.”
However, in order to deal with “developments of the internet and social media as well as the changes in […] lifestyles”, Nintendo’s business strategy has become to more actively utilize Nintendo properties and to take advantage of mobile devices, as had previously been announced in a January Corporate Management Policy Briefing.
If we are to maximize the value of Nintendo IP while the competition to attract consumers’ attention is fierce, we must deliver the value of Nintendo IP in a stress-free fashion to our consumers around the world who are living in varying environments. This is why Nintendo has decided to utilize smart devices aggressively.
Iwata compared this change in policy to the way Nintendo took advantage of TV when it had become the dominant communication channel.
Among the variety of different communication media, smart devices show outstanding strength when it comes to global use rate, contact frequency and total contact time even though each contact period is short. [However] the value of content can easily be deflated in the digital world and, especially on smart devices, it is not easy to maintain content value since the lifespan tends to be very short as much content is released and then replaced so quickly.
In order to take advantage of the new market, which is foreign to the company, Nintendo will partner with DeNA, a publisher-developer focused on the mobile gaming market.
Nintendo and DeNA will jointly develop new games for the global mobile device market, with Nintendo assuming a supervisory role; and create a new, online membership service, to which DeNA will lend their expertise mostly on the back-end, which will be accessible from mobile devices, PCs, and Nintendo systems, which Nintendo will operate. This membership service is intended to launch this fall.
Iwata was careful to make assurances that their dedicated gaming devices would continue to be supported:
We will continue doing our best to develop dedicated game titles for our dedicated game hardware platforms just as we have been doing. For smart devices, even in the case where we utilize the same IP, we will create completely new game software that will perfectly match the play styles of smart devices.
They also announced a “new hardware system with a brand-new concept” at the press conference, which is currently code-named “NX.”
As proof that Nintendo maintains strong enthusiasm for the dedicated game system business, let me confirm that Nintendo is currently developing a dedicated game platform with a brand-new concept under the development codename “NX”.
It’s worth mentioning the press release given to Niche Gamer is just as ambiguous, so it’s not clear what was meant when Iwata said they would be creating a new hardware system. The following statement by Iwata at the conference doesn’t make things any clearer:
Also, until now, when we said, “platform,” it meant a specific video game platform. Now that we are going to release games on smart devices and make use of globally widespread PCs and smart devices for our new membership service, we would like to offer more consumers with software that is suited to their tastes. In other words, we are challenging ourselves to redefine what “Nintendo platforms” mean.
Nintendo will acquire 10 percent of DeNA’s outstanding stock, while DeNA will acquire 1.24 percent of Nintendo outstanding stock, both of which represent roughly the same value, 22 billion yen. This will make Nintendo the second-largest shareholder in DeNA, and DeNA the 10th-largest shareholder in Nintendo. The payments are due April 2, 2015.
We’ll keep you guys posted.