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Nintendo believes free-to-play is hurting their hardware business

by on February 3, 2014
 
Iwata voices his opinion on free-to-play games.

Iwata voices his opinion on free-to-play games.

Some readers may recall that last week there was a Q&A held between Mr. Iwata and Nintendo investors. This has been published in English today, and we can see what Mr. Iwata has to say.

Some have been wondering if Nintendo would turn into a software-only business since the Wii U isn’t selling well. Mr. Iwata says that this won’t be happening, however, stating, “It has been 30 years since Nintendo started its business of dedicated video game systems, and if I want to maintain that size for the next 10, 20, or 30 years, leading a software-only business would only put us at a big disadvantage, which is another reason why we insist on our integrated hardware-software model.”

One asked Mr. Iwata, “Finally, am I correct in thinking that the fact that the current gaming business on smart devices, in its essence, is not making people smile is why Nintendo has decided to pursue its integrated hardware-software business model?”

Mr. Iwata answered that, “Although people may actually be spending more money (to play games on other devices not dedicated to video games, it is less visible, so the hurdle we have to clear in order to encourage them to purchase dedicated game systems has comparatively become higher. As with games that are free-to-play, or “free-to-start” as we like to call it, there is a tendency within the entertainment industry to make gaming as easy as possible to start playing. Because our hardware and software are integrated, we first need consumers to purchase our hardware to get our business off the ground, a challenge I outlined when I talked about changing the way we sell our products. Our mid-term goal would be to give an answer to this question in a way that had never been seen before.”

He goes on to add, “I do not think that hardware-software integration is equivalent to making people smile, and I do not intend to say that making games on smart devices will not lead to putting smiles on people’s faces. There are games on smart devices that are indeed making consumers smile, I think.”

He quickly states, “However, only two years ago, many people urged Nintendo to follow other companies into what was then a very lucrative area, but no one says so any longer. In a similar vein, those who now claim that we should make games for smart devices might or might not be saying so in three years. It is our determination for our mid-term future to make efforts to devise our own solutions different from others.”

For the full interview, you can check here.

What do you think of Mr. Iwata’s answers?

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