Nintendo Has An Action Plan Which Includes Discounts For Regulars
Nintendo is in a bad way. They’re having financial troubles with CEO Satoru Iwata even taking a pay cut to keep his job and do his bit to help the company out. It’s a combination of things that’s putting Nintendo under strain but the biggest finger could easily be pointed at Wii U and its lack of sales.
That doesn’t mean a price cut is imminent anytime soon.
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“Under the current situation where the company has to report an operating loss, simply executing a price reduction as a way to defuse the situation is not an option,” he stated. “In the short-term, Nintendo will focus on thoroughly enriching the value of the most significant feature of Wii U, the Wii U GamePad,” Iwata said.
“Our top priority task this year is to offer software titles that are made possible because of the GamePad,” said Iwata. “We have managed to offer several of such software titles for occasions when many people gather in one place to play, but we have not been able to offer a decisive software title that enriches the user’s gameplay experience when playing alone with the GamePad. This will be one of the top priorities of Mr. Miyamoto’s software development department this year.”
Nintendo will also license its characters rights to new development partners in a bid to boost Wii U’s game library further. The company will not be bringing its games to smartphones but realises the importance of interacting with smartphones. The firm will “start a new service that enables us to connect with our consumers on a continuous basis on smart devices within this year.”
Iwata said, “Let me emphasize that this does not mean simply supplying Nintendo games on smart devices,” he said. “Taking advantage of smart devices means connecting with all consumers, including those who do not own Nintendo’s video game systems, through smart devices and communicating the value of our entertainment offerings, thus encouraging more people to participate in Nintendo platforms.”
Nintendo will “use a small, select team of developers” to run its smartphone service, pledging to “provide something truly valuable that is unique to Nintendo”, possibly including actual games. “I have not given any restrictions to the development team, even not ruling out the possibility of making games or using our game characters,” said Iwata.
“However, if you report that we will release Mario on smart devices, it would be a completely misleading statement. It is our intention to release some application on smart devices this year that is capable of attracting consumer attention and communicating the value of our entertainment offerings,” he added.
Nintendo also has plans to expand into health improvement with its Quality of Life platform using non-wearable hardware and software.
“What Nintendo will try to achieve in the next 10 years is a platform business that improves people’s QOL in enjoyable ways,” said Iwata, revealing a plot to launch a health-focused “hardware-software platform business”.
Iwata says the firm will “leapfrog” the recent surge of wearable devices by providing ‘non-wearable’ products related to health.
“Following others into the exceedingly crowded market of mobile applications or the market of wearable technology that is expected to become increasingly competitive and fighting with brute force is not our way of doing business,” he commented.
“With that said, we wish to achieve an integrated hardware-software platform business that, instead of providing mobile or wearable features, will be characterized by a new area of what we like to call ‘non-wearable’ technology,” explained Iwata.
Iwata admitted that many people find it difficult to stay committed to activities related to improving health, but Nintendo can help keep users engaged.
“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,” said Iwata.
It’s an interesting move from Nintendo and perhaps one that will pay off considering the success of Wii Fit and other active games such as Zumba Fitness or even Dance Central. Of course, Iwata was decidedly vague so we have no idea what Nintendo has planned.
Hey, we’re almost at the end.
This is the part where you find out about that discount pricing structure we teased in the headline. Essentially Nintendo wants to reward regular buyers of their games with discounts.
“Until now it has been taken for granted that software is offered to users at the same price regardless of how many titles they purchase in a year, be it one, five or even ten titles,” said Iwata at an investors briefing on Wednesday.
“Based on our [Nintendo Network ID] account system, if we can offer flexible price points to consumers who meet certain conditions, we can create a situation where these consumers can enjoy our software at cheaper price points when they purchase more,” he revealed.
“Here, we do not need to limit the condition to the number of software titles they purchase. Inviting friends to start playing a particular software title is also an example of a possible condition.
“If we can achieve such a sales mechanism, we can expect to increase the number of players per title, and the players will play our games with more friends. This can help maintain the high usage ratio of a platform.”
A lot of ideas and some potentially viable strategies from Nintendo but is it enough to turn their financial failings around?