Reggie Fils-Aime shares Nintendo strategy and “game plan”

Reggie Fils-Aime was interviewed at the recent Game Developers Conference (GDC) 2007 by Mike Antonucci and Troy Wolverton of the San Jose Mercury News. The main message from the interview: Nintendo’s current success may just be the beginning.

Wolverton and Antonucci described Nintendo’s recent success as a “resurgence.” Nintendo wasn’t doing so well with Sony’s PlayStation 2 beating the Nintendo Game Cube. Sony’s powerful multimedia PSP looked like it could seriously damage the market position of the “dim-screened, underpowered” Nintendo DS.

Despite that gloomy past, Nintendo now outshines the competition. DS and DS Lite sales far outstrip PSP sales, and the Wii outsells Sony’s PlayStation 3 (Mercury News also said that the Wii outsold Microsoft’s Xbox 360 in January of 2007).

Nintendo will continue its “full-court press” to address Wii shortages. Reggie Fils-Aime reminded us of what Satoru Iwata (CEO of Nintendo Company Ltd.) said: Nintendo is doing all it can to churn out more Wii units. “More so than the core gamer, the casual gamer will get frustrated if they cannot get their hands on the product.” Still, they’re not doing so bad: 494,000 Wii units were sold in January (although a recent analysis by Deutsche Bank insists that Nintendo must address the shortage problem soon).

Game publishers and developers continue to shift resources to the Wii and DS. Reggie said that ever since E3 2006, publishers and developers have been shifting resources towards games for the Wii and DS (Mercury News mentioned Electronic Arts and Pandemic). Reggie explained that publishers and developers see a business opportunity: sales of Wii and DS units are very high, and development costs for Wii and DS games are low – and that means high profits. (This should be good news for those who fear the Wii and DS will simply become a dumping ground for ports.)

The Game Boy also had a resurgence. Reggie explained that the Game Boy so affordable (and in some places, it’s more available than the in-demand DS) and has such a good library of games. Part of the reason was the stock shortage: most Nintendo DS stocks ran out during Christmas and were not restocked for three weeks. People bought either PSPs or Game Boys.

Europeans are buying the Wii as soon as units hit the shelves. “Well, there’s no PS3 yet … 360 is selling well only in one country: UK. Across the rest of Europe, it is not performing well. Wii, on the other hand, is selling exceptionally well all through Europe.”

The Wii strap issue: Reggie can’t say that Nintendo will replace broken TVs. Nintendo is investigating claims of smashed TVs because of flying Wiimotes. So far, a lot of it has boiled down to people not using the strap (like purposely letting go or throwing the Wii remote when playing Wii Sports).

We have a process where those consumers are contacted and the investigation process goes through. I think it’s fair to say that unfortunately there are always consumers who want to make an issue out of something that doesn’t necessarily happen to them. And as we go through an investigation process, we’re finding a remarkably small number of consumers who actually had damage.

Reggie Fils-Aime was interviewed at the recent Game Developers Conference (GDC) 2007 by Mike Antonucci and Troy Wolverton of the San Jose Mercury News. The main message from the interview: Nintendo’s current success may just be the beginning.

Wolverton and Antonucci described Nintendo’s recent success as a “resurgence.” Nintendo wasn’t doing so well with Sony’s PlayStation 2 beating the Nintendo Game Cube. Sony’s powerful multimedia PSP looked like it could seriously damage the market position of the “dim-screened, underpowered” Nintendo DS.

Despite that gloomy past, Nintendo now outshines the competition. DS and DS Lite sales far outstrip PSP sales, and the Wii outsells Sony’s PlayStation 3 (Mercury News also said that the Wii outsold Microsoft’s Xbox 360 in January of 2007).

Nintendo will continue its “full-court press” to address Wii shortages. Reggie Fils-Aime reminded us of what Satoru Iwata (CEO of Nintendo Company Ltd.) said: Nintendo is doing all it can to churn out more Wii units. “More so than the core gamer, the casual gamer will get frustrated if they cannot get their hands on the product.” Still, they’re not doing so bad: 494,000 Wii units were sold in January (although a recent analysis by Deutsche Bank insists that Nintendo must address the shortage problem soon).

Game publishers and developers continue to shift resources to the Wii and DS. Reggie said that ever since E3 2006, publishers and developers have been shifting resources towards games for the Wii and DS (Mercury News mentioned Electronic Arts and Pandemic). Reggie explained that publishers and developers see a business opportunity: sales of Wii and DS units are very high, and development costs for Wii and DS games are low – and that means high profits. (This should be good news for those who fear the Wii and DS will simply become a dumping ground for ports.)

The Game Boy also had a resurgence. Reggie explained that the Game Boy so affordable (and in some places, it’s more available than the in-demand DS) and has such a good library of games. Part of the reason was the stock shortage: most Nintendo DS stocks ran out during Christmas and were not restocked for three weeks. People bought either PSPs or Game Boys.

Europeans are buying the Wii as soon as units hit the shelves. “Well, there’s no PS3 yet … 360 is selling well only in one country: UK. Across the rest of Europe, it is not performing well. Wii, on the other hand, is selling exceptionally well all through Europe.”

The Wii strap issue: Reggie can’t say that Nintendo will replace broken TVs. Nintendo is investigating claims of smashed TVs because of flying Wiimotes. So far, a lot of it has boiled down to people not using the strap (like purposely letting go or throwing the Wii remote when playing Wii Sports).

We have a process where those consumers are contacted and the investigation process goes through. I think it’s fair to say that unfortunately there are always consumers who want to make an issue out of something that doesn’t necessarily happen to them. And as we go through an investigation process, we’re finding a remarkably small number of consumers who actually had damage.