Fiscal year meeting QA highlights released by Nintendo

Highlights: (rough trans)

Q1: “The line up for this year seems very weak, are all resources devoted for the Nintendo Switch successor?”

A1: “Since it takes years to develop a new successor, it is true development resources are being considered for it at the moment. However we’re still developing new software for the Switch so please look forward to the June Direct. We believe that it is inevitable that game development will become longer, more complex, and more sophisticated in the future, but our lifeline is to offer new and unique proposals to our customers through game development, so we will continue to invest, including investment. We will actively work to expand our development resources. ”

Q2: “Expected hardware sales for this FY does not include the Switch successor. Is it to show the decline for the Switch sales are small? Even if a successor is announced, do you think it will impact the Switch’s momentum?”

A2: “The expected sales volume for the current fiscal year does not include the successor model of Nintendo Switch. Although sales of the Nintendo Switch hardware have remained relatively strong, it is now eight years since its release. As a result, we recognize that it is becoming increasingly difficult to maintain momentum as time passes. We do not believe that the announcement of a successor model or the release of related future information will have any impact on Nintendo Switch sales, but we would like to maintain a good balance between new demand and demand for multiple units this fiscal year and maximize unit sales.”

Q3: “Please tell us about the relationship between the use of cash on hand and the successor to Nintendo Switch, which was mentioned in previous management policy briefings. At the management policy briefing session in November last year, the existence of a successor model was announced. Will the current Nintendo accounts be used for the successor model?”

A3: “Regarding the use of cash on hand, we focused on “accumulating software assets” and “maintaining and expanding relationships with customers.”

We are currently considering or already implementing a variety of initiatives in each of these areas: “Fundamentals for Sustainable Development.” However, the development of a successor to Nintendo Switch is an investment we have made as part of our normal business activities. Therefore, investment in successor models is not the main use of cash on hand. Nintendo Account has been in place since before the release of Nintendo Switch in order to maintain long-term relationships with customers across hardware generations, and we will continue to use it for successor models as well.”

Q4: “During the Nintendo Switch life cycle, one of the key factors was the remarkable growth in digital sales.

I think it’s a big change. After looking back at the progress and contribution of the digital business to the company’s results to date, please tell us what expectations you have for the digital business in the life cycle of the successor to Nintendo Switch.”

A4: “Our basic policy is not to simply increase the ratio of digital sales, but to maximize sales of game software, including sales of packaged software, and this policy will remain unchanged in the future.

Under these circumstances, we need to increase convenience for both customers who play the packaged version of the software and customers who play the downloaded version, and we hope to continue to make further improvements and innovations in the future. Compared to when Nintendo Switch was released in 2017, digitalization has progressed in many aspects of our lives. As the convenience of digital content continues to improve in the future, we currently believe that an increasing number of customers will choose digital products for successor models, just as they did for Nintendo Switch.”

Q5: “Regarding hardware sales volume, the forecast for the current fiscal year of 13.5 million units seems to be a fairly high target considering the sales situation in the fourth quarter of the previous fiscal year. Are you considering measures to achieve this? In addition, regarding the supply of hardware, the Company has previously mentioned that when releasing new hardware, it would like to produce and ship a quantity that can meet customer demand from the perspective of preventing resale. Considering the recent improvement in the semiconductor market situation, it seems likely that the successor model to Nintendo Switch will be able to ship a certain amount to meet demand from the time of its release.”

A5: “Considering the recent sales situation, we recognize that this is not an easy number to achieve. In the previous fiscal year, hardware sales picked up due to the success of “The Legend of Zelda: Tears of the Kingdom” and the movie “The Super Mario Bros. Movie” so we ended up achieving sales of 15 million yen, which we had expected at the beginning of the fiscal year. Sales exceeded the sales mark of 15.7 million units. In order to sell the number of Nintendo Switch hardware that we expected this fiscal year, we will need to implement a variety of measures. During last year’s year-end sales season, in addition to selling hardware bundled with software, we made proposals that would make customers want to buy a second unit. In the current fiscal year, we continued to increase sales volume through various initiatives.

Regarding the supply of the successor model to Nintendo Switch, we have not yet talked about the release timing, so we cannot give a specific answer, but at this point there is no shortage of supply of semiconductor parts, etc., as there was until the year before last. We do not anticipate that the supply of such products will become a major problem when a successor model is released.”

> Our basic policy is not to simply increase the ratio of digital sales, but to maximize sales of game software, including sales of packaged software, and this policy will remain unchanged in the future.

> Under these circumstances, we need to increase convenience for both customers who play the packaged version of the software and customers who play the downloaded version, and we hope to continue to make further improvements and innovations in the future. Compared to when Nintendo Switch was released in 2017, digitalization has progressed in many aspects of our lives. As the convenience of digital content continues to improve in the future, we currently believe that an increasing number of customers will choose digital products for successor models, just as they did for Nintendo Switch.

Nice to hear they’re not going the all-digital route, at least for now. Would’ve been the only thing to stop me from buying the new system.