Nintendo CEO Satoru Iwata has been hauled over the coals in a new investor Q&A, wherein he remains defiant in the face of accusations of flip-flopping on stereoscopic 3D and failing to secure third party software support for the Wii U. Their ¥100 billion operating income projection remains unchanged.
When grilled about the ambitious forecast and lack of third-party support in a particularly vicious question, Iwata suggested that the Christmas season will play a huge role for the 3DS and Wii U, and that he believes that continuing to deliver quality software is the key to getting consumers to spread the word via social media and word of mouth.
“I believe that my ultimate responsibility is to maximize the long-term corporate value of Nintendo," Iwata said. "That is how I view my role, but on the other hand, I am not saying that the current financial forecast has become unattainable. As I remarked just a while ago, the annual financial performance of a video game company rests heavily upon its success in the year-end sales season.
“There would of course be a significant difference between the most optimistic and the most pessimistic scenarios. This is the inevitable fate of any video game company, and even if one may hope it to be more foreseeable, we operate in an environment where it is impossible to know the outcome of a product we have produced until consumers have tried it for themselves.
“What is more, how players influence the value of our products and turn them into hit titles through interacting with each other, and thereby creating buzz in society, is simply beyond our reach. All we can do is offer the best entertainment that we can and do our best to motivate our consumers to talk about our products, but there is inevitably a fair degree of uncertainty in our performance. Therefore, I do not think that it is the right time to change our financial forecast.”
As far as third-party support is concerned, however, Iwata notably side-stepped the question. "In terms of how we view our relationship with third-party publishers, I think it is natural that there is a difference between publishers who have the software development resources like Nintendo’s to build a software lineup of their own and publishers who do not. Since former President Yamauchi passed away, I have been considering what he taught us in the end, and his words that the worst thing we can do in entertainment is to follow what others are doing spoke directly to my heart.
"Following and imitating others is the kind of reasoning that Nintendo tries to avoid the most, and while we certainly do not have a negative attitude toward strengthening our ties with third-party publishers, employing the same methodology as the other manufacturers would only lead to the most simplistic competitive approaches, such as price wars or money-giving that would never end. We would like to take a unique approach of our own and build sustainable relationships with our third-party publishers."
Tackling the issue of whether Nintendo might need to downsize or streamline their staff, Iwata suggested that it would only occur in the worst case scenario, and that the current workforce is already operating efficiently. “I would like you to understand that this is because we do not see a dark future for Nintendo,” he said.
Iwata also fielded questions about whether the 2DS shows a lack of faith in the 3DS' stereoscopic 3D, stating that the newly-released 2DS has been in production for 18 months and was always intended to be an entry-level product, while the stereoscopic functionality is still being well supported by upcoming titles. The rise of mobile gaming was also brought up, causing Iwata to point at smartphones and tablets as opportunities to create social buzz around products rather than a major threat - citing games like Animal Crossing and Monster Hunter 4 as games that cannot be found on other platforms.
You can read the entire Q&A here. It's clear that Nintendo are worried about a very slow year in terms of Wii U sales, especially heading into a new console generation, but we suspect that this Christmas will treat them fairly well. Either way, we'll have to wait and see what their next financial report has to say.