Thank you for taking a few minutes to chat with me today, I know you have a very busy schedule right now. One of the first things I wanted to ask you about is the new Nintendo DS Lite which was announced in Japan a couple of weeks ago. Is this what the DS should have been when it was first introduced back in 2004?
When the DS was first announced our focus really was on communicating to consumers and to developers the innovation that’s in that unit: two screens, a touch screen, voice activation. And we’ve certainly done that to the tune of multi-millions of units sold across the world. We really a leadership position in every market we compete in versus our competition.
In terms of the physical unit itself, from the day we first showed pictures we’ve been ongoing making tweaks and adjustments, looking to get it as beautiful and as distinctive as possible. What we showed at E3 ended up being different than what we launched with. And certainly what this iteration represents is our ongoing effort to leverage product design to make our innovations and products as attractive as possible.
We will continue to make ongoing adjustments and tweaks to our product design, always with the eye of the consumer in mind.
Does that mean we could probably expect a third iteration of the DS about 18 months from now?
I wouldn’t say that that’s an unreasonable assumption. Look at how many times we’ve improved on the Game Boy Advance in terms of the look, the feel, screen changes, and everything else. We believe that type of constant innovation is critical to driving this industry, and certainly if you look at the world wide sales of Game Boy Advance, I don’t think anyone would disagree.
Have you set a timetable for when the DS Lite will be available here in North America?
We have not announced the date and we won’t be announcing a date for the foreseeable future. We are working through our inventories and our allocations of product and frankly, we are doing everything we can just to meet current demand. Japan has already announced that they will launch in early March and they have the same challenges of meeting that very high level of demand.
We need to make sure that we have enough product in hand for us to launch effectively here in North America and as soon as we feel we are in that position we’ll announce it.
Do you think that announcing this new version so early, before it comes out, risks cannibalizing sales of the current DS?
Yeah, that is certainly a risk. But unfortunately it was a situation that couldn’t be helped in that our Japanese sales have been so strong, we’ve been out of stock essentially since the last few days in December. And that’s what drove us to announce the new design as early as we did so that we could let those consumers know that it was coming.
What sort of response have you gotten to the new Nintendo Wi-Fi Connection service for the Nintendo DS?
We feel the launch has gone spectacularly well. We launched Nintendo Wi-Fi connection with advertising that communicated the ease, the accessibility, and the match-up service that allowed consumers to play against people of their own skill level. The launch of Nintendo Wi-Fi Connection in the U.S., in Japan, and in Europe has been phenomenal. We are on track to break all types of records in terms of number of connections and number of unique users. And the software that we’ve launched is what’s driving really it.
The Tony Hawk title from Activision, our own Mario Kart DS, and Animal Crossing DS and we’re quite excited with the titles coming up. We’ve announced Metroid Prime: Hunters and Tetris DS, both WiFi compatible, both launching on the 20th of March. So we think we’ve launched extremely well, we’re quite happy with the numbers. And quite frankly, we’re prepared to bring out more and more titles to drive the service and ur objective is to get every single consumer to try Nintendo Wi-Fi Connection at least once, that’s our objective.
Now how do you respond to some of the criticisms of the service, like the lack of persistent friends?
Well, a couple of things. First the number of concerns or questions that have been raised by consumers who use the service are extremely modest. I mean we are talking hundredths of a percent of actual connections in terms of any consumers who are saying something negative about the service or the approach.
And the second point, in terms of having to have new friend codes for every game, quite frankly, what that does is put control in the hands of the gamer. So there are some people that I want to let into my house with Animal Crossing and others that I don’t, and that friend code set up allows me to manage that title by title. We think that’s the appropriate way to go.
Where is Nintendo right now with the development of the Revolution?
We have been sharing the controller mechanics with developers across the world. We have shipped over a thousand controller dev kits to developers so that they can begin getting experience with the controller mechanics. The response to the controller has been fantastic. Developers are truly embracing the innovation. They’re embracing the approach and quite frankly, they’re embracing our vision; our vision of creating games that are as sophisticated as the core gamer wants it to be but could also be as straightforward and as accessible as brand new gamers. And that vision, that strategy is what Nintendo is all about. We want to create a system with Revolution that appeals to all types of gamers versus going down a path that, frankly, is a bit exclusionary.
You mean in terms of the competition and what they’re doing?
Exactly. They have gone down a path that is very expensive for consumers, very expensive for developers to create content against, and they're providing a level of horsepower technology that not many consumers want. We in providing to consumers and to developers an approach that is certainly high-tech and certainly powerful enough to create the most sophisticated games, but also has an approach that is open for developers to create whatever type of content they want.
Do you think that not having support for high-definition will put the Revolution at a disadvantage with respect to the PS3 and the Xbox 360?
Not at all. Only a very small percentage of homes currently have high-definition televisions. All of the next-generation systems will look great, but HD games don ' t look as good on the majority of regular tv ' s. The question is which one will have amazing new kinds of games with innovative experience. The answer is Revolution.
You must be examining what Microsoft has done with Xbox Live and Xbox Live Arcade. At last year's E3 you announced that Nintendo was going to offer downloads of games from previous consoles directly to the Revolution, but what kind of support for the overall online experience are you building into the console?
Sure. In terms of the details of Virtual Console, how it will work, the titles available, the entire environment and experience, we plan on sharing much of that detail at E3.
I’m certainly not going to get into it today but, suffice it to say, the approach we’ve taken with Nintendo Wi-Fi Connection, which is all about great game play, ease of access, total control in the hands of the consumer and a fantastic experience, all of those principles will be applied to the virtual console. We fully expect that consumers who are exposed to the approach will love it. And we’ll be prepared to share that information at E3.
So networking and all that other stuff will be built into the console?
Well, you’ll see more at E3.
Has the release of Legend of Zelda: Twilight Princess been pushed back once again?
No, it has not. We have gone on record that we are launching it in 2006 on GameCube and that is still the plan.
I ask because some retailers are showing June 1, while others are showing May 15. Is that about when we should expect it?
No, we have not told retailers a specific launch date and we’ll be working with all of our key retailers and sharing that information shortly, getting pre-sales set up, and really driving the buzz and the interest in this title in the way our fans want it to be. We know -- and our fans know -- that Zelda certainly will be the biggest and best title ever for GameCube. And we will market it as such and we know the consumers won’t be disappointed.
Speaking of GameCube, if you play a GameCube game on the new Revolution console, will you be able to use the Revolution controller or will you have to use the older style of controller?
Well, all of the GameCube games will be compatible only with GameCube accessories, so whether it’s a WaveBird or whether it’s a wired controller, you’ll only be able to play those titles with those accessories. Essentially what we’re saying is that Revolution titles are the only ones that will leverage the new controller.
Nintendo has said all along that the Game Boy and the DS are of parallel platforms and that the DS is not the next Game Boy, but how long will it be until we see a new Game Boy come out?
You know, that’s a great question better posed to Mr. Iwata. From my perspective, our focus is on driving Nintendo DS, launching the plethora of titles that we have coming up for this platform over the next time period, as well as driving Game Cube successfully until the Revolution launch, as well as driving Game Boy Advance.
We’ve just talked to retailers about some new titles coming for Game Boy Advance; obviously Drill Dozer has just launched and is getting very positive reviews out in the marketplace. Our plan continues to be to support all three lines of our business; the home console, DS, as well as Game Boy Advance.
Do you ever think that having two different portable platforms is confusing for the average consumer, at least from a marketing standpoint?
We have not seen that at all. Consumers understand that Game Boy Advance today really is a mass market platform. The titles available, while there are RPGs and other, more complex games, but certainly what is selling most right now are games targeted to a slightly younger demographic and it’s doing extremely well. DS, with all of the innovation, commands a higher price point and has a variety of different titles to meet those consumer needs. We have not seen any consumer confusion or misunderstanding of exactly what those two platforms are all about.
How have sales of the Game Boy Micro been?
Sales of Game Boy Micro have been exactly where we predicted them to be. It's ten to fifteen percent of total Game Boy Advance sales, targeted against a very specific demographic who want something high image, who want something unique, and that’s exactly where that product has delivered. We continue to sell it and we will continue to sell it for the foreseeable future.
Earlier you touched on the difference in philosophy between Nintendo and Sony and Microsoft. Lately when people from Sony and Microsoft talk about Nintendo, it seems like they're always trying to position the company as creating games solely for a younger demographic. How do you respond to that?
It’s categorically false. I find it quite interesting that our competitors are more interested in trying to pigeonhole us versus articulating a clear strategy amongst themselves that differentiates where they’re trying to do in the marketplace. We have been very clear in our positioning. Nintendo is about innovation and bringing new and unique game play to the consumer -- both the core gamer, as well as new gamers. And we view that mission as critical because as you look at all the demographic data, this industry can no longer rely simply on more and more young men coming of age to try gaming, and being in that, call it ten to twenty year old demographic. The fact is that that demographic is shrinking and the next cohort, their younger brothers, is even smaller.
So, for us, we view it as critical to find new ways to bring gaming to the masses. That means women, as we’ve successfully done with Nintendogs. That means older consumers, as Japan has successfully done with Brain Age and that product’s sequel. That is exactly what we will be doing here in this marketplace, not only with DS, but with Revolution as well: bringing innovation to the marketplace that satisfies the hardest of the hardcore as well as brings new consumers into the marketplace.
Is there an over reliance on Nintendo’s long established franchises and characters, like Mario, Zelda, Metroid, and the others? It seems like we see a new blockbuster franchise like Nintendos with decreasing frequency.
Absolutely not. Nintendo has an enviable position of having the best franchises in this industry in terms of Mario and Zelda and Metroid and Donkey Kong and all of those great franchises. Together those are a library that any developer would kill for. In addition, we have the ability to create new franchises; Nintendogs, a great new franchise and the innovation that’s captured in that software is fantastic.
The Brain Training series is another new genre that has taken Japan by storm and I’m firmly convinced will take the U.S. and Europe by storm. So if anything, what we have seen from Nintendo is an ability to innovate its greatest franchise characters in brand new ways, as well as develop brand new franchises that create million unit selling titles. That’s a very enviable position to be in.
Will we see some brand new franchises for the Revolution?
Yes we will.
Something that will be as big as a Nintendogs or a Zelda?
That is certainly the goal, but you’ll have to tell me when you see it at E3. We will be showing a lot of information about Revolution at E3. You know we’ve said publicly that this year’s E3 will be Revolution’s coming out party. Now, we’ve also been quite clear that there are innovations inherent in Revolution that we will be sharing ongoing. That it is simply not a one time event for us to share information about Revolution and all of its innovation. I have seen blog entries on your site and other sites that criticize us for that, but quite frankly, it’s just good business. In terms of letting the consumer know what’s involved and sharing that information all the way up until launch.
Is Revolution going to be the final name or is it still a code name?
It is still a code name.
Will you unveil the new name at E3?
Have you played with the Xbox 360?
I have played with a 360.
What did you think about it?
Honestly, I was underwhelmed. And let me be clear: I played with pre-production units at last year’s E3 as well as at other industry events, I’ve played with production product, and while certainly some games look fantastic, I found the game play for many of the titles lacking. And so for me it was not something that held my interest for very long.
We certainly are looking at what they’re doing from an online perspective and I think to give Microsoft some credit, what they’ve done with Xbox Live has been very intriguing. But as a console, as a consumer, would I have shelled out what is close to $700 when you look at the premium unit, some software, some accessories? If I would’ve done that I’d be disappointed right now.
If you'll indulge me, I wanted to ask you something that I also asked Miyamoto when I sat down with him a few months ago, and that's about that Nintendo ON video that was circulating around E3 last year . It's the one where all the game play is done wearing a sort of virtual reality helmet. Have you seen it?
I have not seen that one.
You haven’t seen, but are you aware of it?
I am aware that it was done, but I have not seen it.
It sparked a lot of speculation and enthusiasm from the Nintendo community. Why do you that something like this resonated so powerfully with your fan base?
Well, a number of things. First, Nintendo is blessed with the best, most dynamic, most vocal community of players and fans of any brand in this space. And quite frankly, I am always in awe of what our fans come up with and share. It really is compelling and it really highlights the love that they have for this brand. And it’s a situation that most companies would, they certainly envy our position. Second, in terms of an innovation like a virtual reality helmet, I think that the industry, our fans – and even our competitors -- expect that type of innovation from us. They expect that we will be the ones pushing the industry and pushing the envelope with brand new ideas. And I think that’s another reason why that video resonated out in the marketplace. That’s my reaction.
So it wasn't passed around the office there?
I didn’t get a chance to see it but who’s to say if either Perrin [Kaplan] or some of my other executives didn’t get a chance to see it.
I know we don’t have a ton of time left, so one of the last things I wanted to ask you about was about how Sony and Microsoft are positioning their new consoles as multimedia digital entertainment devices in addition to gaming devices, something which Nintendo has not emphasized. Sony talks about the PSP and how it can play music and video, and while the DS can have those capabilities, it's not something Nintendo talks about very much. What is Nintendo's philosophy about all this stuff going forward? Do you see multimedia as a distraction from gaming?
Our philosophy is that consumers want great gaming experiences and our passion is delivering great gaming experiences. In the home console space, we believe that the best way to do that is with a dedicated machine. In the handheld space, as you’ve said, the DS does have other capabilities in the multimedia area, but we believe it’s important to first establish its credentials as a superb game playing device.
To be perfectly clear, the Microsoft and Sony strategies are based on overall corporate objectives versus what’s right for the consumer. That’s a reality. Microsoft is essentially trying to get you to put a PC in your living room because they are fundamentally a PC software company. Sony is trying to get you to put an entertainment hub that has Blu-ray technology because that’s important to their movie business and the rest of their entire electronics business.
We are a gaming company. We are gamers at heart. We love creating great, innovative content and superbly designed hardware, that’s what we do. And with that passion comes a laser like focus to do things that are right for the consumer and right for the business. That’s the fundamental difference in our strategy versus our competition.
Thank you so much for your time. I know this was very short notice, but it’s very much appreciated.
I have to tell you, I read both Engadget and Joystiq on a regular basis. So keep up the great work.