"Can portable gaming devices be more expensive than home console gaming machines?" That was a question Nintendo president Satoru Iwata said his company was contemplating the answer to, at Nintendo’s investor Q&A last week.
Late into the conference, the subject of competing with the iPhone was brought up once again when an investor inquired if Nintendo were interested in increased connectivity with their portable devices, going forward. To this, Iwata replied that, while he wasn’t a fan of services where consumers would have to shoulder a monthly fee, he was interested in a [Amazon] Kindle-like service and touched upon the subject of pricing portable hardware.
"On the other hand, I find the business model of Kindle rather interesting. Once you buy the hardware, the 3G communication functions are already inside, so you are able to do a sort of the cell phone’s packet communications. However, the customers do not pay money (directly for the communications.) When the customers make the download purchase of a book, that packet fees are included in the charge of the book. On the other hand, I read somewhere that they are yet to make a profit. Nevertheless, in this business model, customers are not required to shoulder the cost. And the service is now being expanded beyond the U.S. to the world. I do not know if the Japanese companies, say, telephone carriers, are happy about the business model. Probably, they are unhappy. Still, I think they were able to come up with a business model which is not bad.
"We have to set the price of portable game machines that are affordable to the customers. Today, some people are already starting to criticize by saying that Nintendo, whenever it launches new model, is increasing the suggested retail price. Including the need to assess such questions as, "can portable gaming devices be more expensive than home console gaming machine?," as one of the future possibilities, we would like to review the possibility of being able to be connected wirelessly and how the trend in the technologies evolve in order for us to come up with our own solutions that can smartly take advantage of new technologies but does not require monthly payments by the customers. Wireless communications and portable game devices go hand in hand very well. We would like to continuously think about that in this fashion and hope to have our answer."
Iwata concluded by stating, "Whenever I received the question, ‘Won’t Nintendo integrate cell-phone functions to its portable game devices?’, I always answered, ‘It will be OK if our customers do not have to make monthly payments.’ Basically, I have not changed that answer."
Readers might want to note that the DSi LL already costs as much as a Wii in Japan at 20,000 yen.