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Nintendo discusses plans for smartphones, helping the Wii U rebound

Nintendo discusses plans for smartphones, helping the Wii U rebound

January 29, 2014 | By Christian Nutt

Today in Tokyo, Nintendo held its first shareholder briefing following its disappointing third quarter results, which showed poor Wii U sales.

President Satoru Iwata took the stage to address a packed room, according to live reports from the Wall Street Journal and Macquarie senior research analyst David Gibson, who livetweeted the event.

Iwata told the crowd that Nintendo has no plans to abandon its home console business, according to the Journal, and instead intends to refocus efforts on making the Wii U more appealing to consumers via its games, marketing, and improved responsiveness via firmware updates.

"The Wii U GamePad needs titles to take advantage of pad, [this] is [the] company's highest priority," Gibson tweeted. He reported that Iwata wants to see the profile of the touchscreen Wii U GamePad increased -- consumers believe that it's an accessory for the Wii.

The company also has plans to introduce an NFC title for the pad. Disney Infinity and Skylanders use this technology, which is also built into the GamePad. Nintendo has so far dabbled in it with downloadable game Pokemon Rumble U.

According to Gibson's tweets, Iwata said that a Wii U price cut is not an option for the company.

The company also announced the addition of the original DS to its Virtual Console service for the Wii U.

Nintendo's plans for smartphones, while its console business continues

Iwata denied that the company would make either full games or demos for smartphones but instead use the devices to drive interest in its own consoles. "It doesn't make sense for us not to do business in smart devices, [we] want to establish connections to users to drive to own devices," Gibson tweeted, paraphrasing Iwata.

"Short answer, he’s not going to release Nintendo’s titles on other platforms," the Wall Street Journal's liveblogger Kana Inagaki wrote.

[Update: In a transcribed version of Iwata's results briefing, the president expands on Nintendo's smartphone plans, explaining that, the company has assembled a "small, select team of developers" to explore opportunities on mobile to help create "stronger ties" with customers. That doesn't necessarily mean Nintendo mobile games, but it doesn't rule it out, either.

He says, "In the current environment surrounding smart devices, we feel that we will not be able to gain the support of many consumers unless we are able to provide something truly valuable that is unique to Nintendo."

He adds, "Accordingly, I have not given any restrictions to the development team, even not ruling out the possibility of making games or using our game characters. 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, so I would encourage you to see how our approach yields results."]

Nintendo's future hardware plans seem to revolve around convergence between its handheld and console devices, according to Iwata's comments, in the manner of smartphones and tablets. "Apple has one iOS platform as does Android, Nintendo has to do the same," Gibson tweeted.

Though handhelds and consoles were very divergent in the past, "Mr. Iwata says... technological advances have narrowed the architectural difference between the two," Inagaki wrote. "He adds he doesn’t know yet whether the two hardware will be merged in the future, but the two will become more like 'brothers.'"

Nintendo merged its console and handheld divisions almost a year ago.

Instead, as expected, Nintendo hopes to get people to sign up for Nintendo Network IDs on smartphones and interact with the company that way. According to Gibson, Iwata said NNIDs, which are already used on the Wii U and 3DS, will be used in its future handheld and console devices -- confirming the company has no plans to give up its core hardware business.

Instead, it plans to create new services based around the Nintendo Network to build network-based, not device-based, relationships with its customers, Gibson wrote. This service will not be designed to make a profit, but "advertising is not enough, it needs to be fun and engaging."

Nintendo may have no plans to go third-party, but according to the Wall Street Journal, Iwata mentioned plans to license its characters to new partners -- to "expand exposure," per Gibson. However, if this will undermine its own titles, Nintendo will not sign a deal. The company is already in talks with partners to do so, Iwata said.

Sailing Back to the Blue Ocean

The company found great success with the original Nintendo DS and the Wii by targeting a consumer base which had not approached video games before -- and Iwata said at the meeting that over the next 10 years, the company hopes to find more success by creating a health-based business.

The goal is "enhancing the quality of life through entertainment," wrote Inagaki, by creating what Gibson called a "quality of life platform" that will "propose [a] healthy structure for day-to-day" life via non-wearable devices -- though the company wouldn't explain what "non-wearable devices" are. Iwata expects "synergies between games platform and QOL platform," tweeted Gibson.

Nintendo's game design guru Shigeru Miyamoto promised that the company is building a "flagship title" to demonstrate the power of its quality of life platform, Gibson wrote.

Further details about these devices will be revealed later in the year, Iwata said. The quality of life platform will roll out in April 2015, Gibson wrote.

Looking Ahead

Over the next fiscal year, which begins this April, the 3DS "will be the driver" of Nintendo's business, wrote Gibson. The Wii U "will not provide big profit but software titles will drive restoration," he tweeted.

Iwata has "never considered quitting," reports the Wall Street Journal, though he has taken a pay cut as an admission of responsibility for the company's poor performance.

While the transition to the HD Wii U was rough for Nintendo, the Wall Street Journal's Inagaki wrote that Miyamoto promised that "there’s been an internal improvement in conditions for creating new titles."

Iwata expects increased interest in the Nintendo 3DS from global development teams thanks to its large install base, and as the Wii U rebounds, "third party will follow," per Gibson.

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