Nintendo President: “We Human Beings Do Not Change Our Habits Very Quickly”

By Ishaan . October 7, 2010 . 10:21am

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From the get-go, Nintendo intended to develop their upcoming Nintendo 3DS as a console capable of better online functionality than its predecessors, the Wii and DS.

 

Nintendo hope that passive online functionality will draw more people to the system’s online features. You can read more about this and other improvements Nintendo are making to their online infrastructure for the 3DS here.

 

At a recent investor Q&A, Nintendo president, Satoru Iwata, fielded a question regarding his views on the subject of the company generating significant profits from digital distribution of games and network services. Iwata replied:

 

“As for the aspect of profit, we are expecting that profits through the network activities will grow in the long run. However, as I have often said on these types of the occasions, we human beings do not change our habits very quickly. If this world was full of the so-called “early adopters,” who are highly sensitive to information and quickly respond to anything new, the world could change more quickly.

 

The fact is, the majority of us are not in that category. Accordingly, for some time in the future as well, the packaged goods business will remain to be our mainstream business. On the other hand, network elements are very important in order to heighten the value of the packaged products or in order to offer unprecedented fun, which can be a topic in society. Our current thinking is that we would like to aggressively explore such usage.”

 

Sony already offer an alternative to buying physical copies of several games by distributing them via the PlayStation Network. No such functionality has been confirmed as of yet with regard to the Nintendo 3DS, however.


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  • http://tristsantithesis.tumblr.com/ Tsunayoshi Sawada

    Well I guess its true to an extent, didnt some report say that only 6% of console owners buy DLC?

  • Jirin

    Smart man.I think what a lot of companies aren’t really getting (Or are preferring to ignore) about the appeal of online media is the associated increase in availability. If I want to get some obscure CD from Europe, I don’t have to spend a month diligently searching import sections of a thousand record stores. I go online, and five minutes later I have it. But these companies are trying to roll out online content in a way that they have full control over the content. What’s the point of having a worldwide download network if I can’t download somebody’s fansub of a game the developer has no intention of localizing here?We need more vigilante download networks to send a message to companies that if you want to profit off this, you have to let loose your grip on data flow. You want to profit off your games, and I’d like to pay for them. But you can’t say ‘This region of the world gets this content at this time, this region gets this content at this time, this region doens’t get it at all’ and then ask for unquestioning obedience from consumers.

    • http://tristsantithesis.tumblr.com/ Tsunayoshi Sawada

      What? That doesnt make sense, what does the content creator even gain by not having any control over what they are offering. Even more, what company would even be willing to offer a fansub of a game that has little chance to maybe make profit or worst, not even break even.

      Vigilant download networks? Is that even legal?!

      • Jirin

        Yeah, the content creator benefits even more from bribing Congress to pass laws restricting competition, or preventing used game sales, or other things. That doesn’t make it okay to restrict freedom of information. And if companies continue to do so, people will realize they’re being screwed and start giving their money to competitors that offer them better deals. Why do you think the record companies and video rental companies are all going out of business? The market changed, and instead of changing with it, they tried to legislate the change away. They won the battle and lost the war, and it’s going to be the same with video game companies.

        How could they profit off of what I’m proposing? License programmers to tweak their code to make fan translations, their own levels, etc, and create an online marketplace where both the developer and the programmer share the profit. Protectionism doesn’t work in the long term. Never has, never will. Video game companies can either work with the open flow of information, or they’ll eventually be run out of business.

        • http://tristsantithesis.tumblr.com/ Tsunayoshi Sawada

          Um netflix, a video rental company isnt going out of business…the iTunes and Amazon mp3, dont seem to be losing money by selling music and video services each quarter…I havent seen any record companies claiming to be going out of business. If anything I thought they were making big money from concert revenues and other merchandises. Movie studios dont seem to be going out of business, they seem to be making money through other means, and we see DVDs/Blu-Rays making and breaking huge records even through last year.

          Your proposal just sounds a bit complicated, how would they even market these titles and how would they reach to people who still buy physical disc based media. It seems your idea would just be better suited to these companies just porting everything to the the AppStore and other device appstores and selling them there…Would fans even be that vigilant, I can only see it working for olden titles and maybe one or two current gen titles and thats it. Im quite sure the games would exceed the size allowed by Nintendo, as well as just being an inconvenience to the majority of people that just dont download games.

          • Jirin

            Um, Tower? Virgin? Hollywood Video? Blockbuster? Half the FYE stores are gone too, and it’s pretty much the last big chain standing.

            The Nintendo guy is right, people take a long time to change their habits. But, people have stopped renting videos from stores and buying records, switching them to online distribution networks, and it’s those online distribution records that are succeeding. It might not be for 10-20 years, but eventually games are going to go digital. Then, companies that try to gouge people by controlling and exclusivizing content are going to lose to less restricted distribution models.

            For the record, I’m not suggesting people start illegal online download rings. I’m suggesting people start their own game companies for semi-open source games and unrestricted distribution models. Models where, if a Japanese game company makes a game and doesn’t see profit for it in the US, the US gamers can still play it on somebody’s fansub and the company can profit from it. I think, in the long term, that’s the only way the industry will stay profitable when people do change their habits.

          • malek86

            Who would take it upon themselves on something like this? Even simple games usually take at least two years to translate. A game is not a 20-minutes anime episode.

    • http://honorless.net honorless

      While I agree with the spirit of your message…that’s not gonna work. Companies have consistently used “vigilante download networks” as a scapegoat in order to force more and more invasive DRM and idiotic restrictions on their paying customers rather than realizing they could convert many pirates into paying customers by examining their own failings. Doing the former is easy and easily justifiable to investors, while doing the latter takes time, effort and money.Slightly OT, but Gabe Newell actually comments on this phenomenon in an interview on YT somwhere. When Valve actually localized their products in Russian and made them available the same day as the English versions, the country went from “hotbed of piracy” to “really large market”. Though I’m not a fan of them or Steam, I have to admit Valve is probably the wisest company out there in this regard—and their success is obvious.I agree with your conclusion that Iwata is smart to keep Nintendo focused on physical products and user-to-user connectivity rather than their online distribution system. The DD market on consoles is still relatively small and the “tag mode” business is huge in Japan. And as conservative as Nintendo is, I’m not sure they’ll ever catch up to Microsoft or Sony when it comes to their downloadable content services. (Here’s hoping I get to eat some crow on this when the 3DS launches, though.)…Hell, most signs are pointing to the 3DS being region locked, so unless they step up their localization efforts accordingly—especially when it comes to third parties—it could be argued that they’re taking a regressive stance when it comes to worldwide availability.

      • Yusaku_Matsuda70s

        I can understand why they think DRM is helping them (even though in reality it’s not), but region locks never made sense to me. Don’t they profit off import sales? It’s not like importing is a widespread anyway.

        I hope the next PS remains region free; many games I have purchased this gen are from another region and I love it.

        • Joanna

          I’ve always thought it was so they could jack up the prices in certain regions. I mean, why would European gamers pay twice as much if the could import at half the cost? And even if only 5% imported, I would think this is more of a safety precaution. Wasn’t there also a similar situation with anime and Japanese fans importing our subbed anime?

  • http://www.twitter.com/christaran Chris Taran

    I’m not so sure it’s human’s that don’t change very quickly, so much as it is a certain nation…

    • http://www.facebook.com/people/Tommy-Lee/518924335 Tommy Lee

      It is a common perception that humans don’t adapt to change very quickly. I think whether that’s true or not would result in a very long debate.

  • malek86

    I hope he isn’t trying to pre-emptively justify himself for the 3DS not having an unified online system or something like that.

    • http://tristsantithesis.tumblr.com/ Tsunayoshi Sawada

      Just how robust do you think the Nintendo 3DS online system will be?

      • malek86

        Honestly speaking? As a general rule, I’m not optimistic about anything Nintendo ever does.

        • sfried

          So Nintendo’s doomed right from the start, is that it? I mean, I don’t expect them to be as robust as their competitors, but I’d assume they’d have a solution to the ongoing problem of friendcodes and matchmaking.

          • NeoTechni

            I don’t. Friend codes were invented because of Nintendo’s ego (they were trying to prove a previous statement that gamers dont want online) and their ego has only gotten larger

          • sfried

            If they were trying to prove that, then why have online in the first place? Clearly you are contradicting your statement here.

          • NeoTechni

            “If they were trying to prove that, then why have online in the first place? ”

            They had to have it at this point. And they wanted it to do badly.

            For the same reason they used sales of Gamecube’s component cables as proof they didn’t need HD, and removed component support from later systems. (While conveniently leaving out the fact they were only sold on their website)

            It’s like a guy who does the dishes badly to get people not to ask him to do it again.

          • Joanna

            Hmmm, I find that rather odd. Wouldn’t doing a poor job make people angry at nintendo’s service and thus lose them customers? I’ve never heard of any business models like that. I’ve always thought the rationale behind friendcodes and the restricted online was to maintain their family friendly reputation. You know, multiplayer on PS3 can have some nasty stuff. It’s like Disney and their family friendly movies. Parents know they can trust the brand and don’t have to worry about their kids being exposed to swearing and what-not.

          • NeoTechni

            “I’ve never heard of any business models like that”

            I’ve also never heard of a business model where you abandon all your customers to target a new demographic that doesnt play games. But that worked for DS/Wii.

            “I’ve always thought the rationale behind friendcodes and the restricted online was to maintain their family friendly reputation.”

            They could have still done that without friend codes. PSP and PS2 didn’t have unified online, but they were still better. Far better. That was just their marketing excuse.

            “Wouldn’t doing a poor job make people angry at nintendo’s service and thus lose them customers? ”

            I’m sure quite a few people bought multiplatform games for superior systems because of how poorly Wii did. Games have been recalled cause of it.

          • Joanna

            I don’t see how Nintendo abandoned their customers. :|
            You’ve still got your core Nintendo games on the Wii: Mario, Zelda, Fire Emblem, Smash Bros., Kirby, etc.

            And really, branching out is exactly what businesses are about. So the fact that they are making, oh what you call it, “casual games” is in no way incompatible with business.

            “They could have still done that without friend codes. PSP and PS2 didn’t have unified online, but they were still better. Far better. That was just their marketing excuse.”

            It is possible that Nintendo was thinking of implementing voice chat into their games from the start (Advance Wars: Days of Ruin has it, as does Animal Crossing: City Folk), and even if they were not, the possibility existed and they needed to account for it via some mechanism, that mechanism was friend codes. Thus, the only way to maintain a family friendly online experience would be through friend codes.

            Oh, I don’t deny that the service isn’t the best, but really, I cannot fathom Nintendo and Iwata doing something so stupid as to sabotage their own online experience. I’m sure they got grilled for it by investors and will be grilled again if their next gen systems don’t improve online functionality. I find it highly unlikely that Nintendo’s current president, who has shown countless times that he has good business sense and has brought the company back from third place to first, would be so haughty and stupid to purposefully hinder their online capability to prove some popularity contest. As for recalled games, I’m drawing a blank. I only recall there being recalls due to bugs on third party produces, which isn’t Nintendo’s fault.

    • http://www.siliconera.com/ Ishaan

      Check the Q&A out when you have the time…it’s pretty interesting. The majority of it revolves around the online stuff, actually.

      • Joanna

        I have to agree. There are some interesting reads, in particular, I was amazed that Iwata actually understood the piracy problem:Iwata, “Of course, as a responsibility of the platform holder, we will tackle piracy. For example, when we launch new hardware, such as Nintendo 3DS, it is a good opportunity to beef up the countermeasures, and we are actually working on that now. On the other hand, I do not think we should attribute bad software sales solely to piracy. Even with piracy, as long as we can create products which can attract attention from many consumers and which can greatly entertain them, that software can make it to the No. 1 position of the hit software sales chart. So, we would like to consider it from both perspectives simultaneously. It is true there is always the influence of piracy, but it is important for us to increase the number of our consumers who are willing to shell out their money to purchase our products. So, we do not intend to think that slower sales are solely due to piracy.”

  • http://thrust-the-sky.deviantart.com/ WildArms

    there just needs to be more wi-fi around the world

  • NeoTechni

    3DS only has 1.5 GB of internal memory. And only comes with a 2 GB SD card. That’s not enough to start distributing full games. If Nintendo wants to start, 3DS should have had a USB port for starters.

    • sfried

      You did catch from their press that 3DSWare games run right off the SD card instead of being loaded into internal memory, right?

      And a USB port on a 3DS is just a handheld waiting to be hacked.

      • NeoTechni

        “You did catch from their press that 3DSWare games run right off the SD card instead of being loaded into internal memory, right?

        1) Awesome

        2) I specified full games

        “And a USB port on a 3DS is just a handheld waiting to be hacked. ”

        No it’s not. It’s to make data transfer (ie: to/from the SD card) and charging easier and more convenient. That docking bay is a lot less portable than using USB would be.

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