Reggie Fils-Aime

Reggie Fils-Aime

Reggie Fils-Aime

Next Generation is today publishing the detail of Nintendo sales and
marketing boss Reggie Fils-Aime’s presentation at the UBS Global Media
Conference. It includes Nintendo’s stated direction, some fascinating
stats and third party reaction to Revolution.

Speaking to delegates made up from the world’s media
industries, Fils-Aime talked up Nintendo’ need to innovate as well as
the market and demographic forces which were driving this strategy.

He offered some stats showing Nintendo’s strength in the handhelds
market and he also pulled some quotes from third-parties about
Revolution.

These are the 20 main points from his PowerPoint presentation…

1. Quote from the movie industry: “It makes no sense to continue aiming
all your films at the same demographic quadrant. Eventually, they
become stale and lack originality.” Hollywood is suffering from a lack
of originality.

2. Similarly, Sony and Microsoft are going in a straight line. Nintendo is taking a new turn, seeking new audiences.

3. Hardware and software sales in Japan have decreased significantly in
the last decade. In 1997 the market was worth nearly 800 billion Yen.
It’s now worth less than 500 billion.

4. The majority of sales have traditionally been earned through very
strong second half sales. This pattern has been consistent throughout
the console industry’s history, but second-half sales have been
decreasing for the past three years, showing a weakness in the market.

5. The 8-bit market was worth 31 million hardware units followed by
16-bit (42M) and 32/64-bit (48M) and current generation of 53 million
units.

6. Despite increased sales of units, household penetration of game consoles has hardly risen from around 30% in the 1980s.

7. The number of U.S males in the target demographic for games consoles
has been rising through this decade, but has now peaked (at 10.86
million) and is declining.

8. A year ago, 29% of U.S. teenagers said their interest in videogame
was increasing. That number is now down to 25%. 75% say their interest
is declining.

9. Quoting a business guru: Expand market boundaries. Create new demand. ‘What can be,’ not ‘What is’.

10. Iwata quotes:

"If we cannot expand the market, all we can do is wait for the industry to slowly die."

"It is our responsibility to make games for all skill levels…including people who are not playing games now."

"Technology alone can’t advance videogames…which is why we plan to take Revolution in a dramatic new direction."

"Revolution…does not follow the conventional path of new game systems."

11. Quote from management guru Jack Welch: In real life, strategy is
actually very straightforward.   You pick a general
direction—and implement like hell."

12. GameBoy unit sales have increased from 1.5 million units in 1995 to 7.5 million in 2004; peaking at 8 million in 2003.

13. Nintendo DS is a Technology and Market ‘Disruptor’ offering two
screens, microphone and touch screen. It’s the market leader.

14. Total U.S. / Japanese retail sales are at 6 million, compared to PSP’s 4.26 million

15. Likewise, Nintendogs has opened up new markets. "Not a Traditional
Game – Social Appeal  – U.S. Sales: 950,000+. 2x Female Purchase
Rate."

16. August to October handheld units sales (USA). GBA has 41%; DS has 31%; PSP has 28%.

17. Benefits of WiFi and success of Mario Kart DS / Animal Crossing  explained.

18. Revolution: is all about "New Players / New Thrills. Backward
Compatibility makes it a  "Virtual Console" catering both to a
market for  Nostalgia and for something Brand New.

19. Third party reaction:

Creative Liberation
Easy to Port
Traditional Controller Cradle
Developer Enthusiasm

20. Third Party Quotes:

Sega: "I don’t think there’s a creator who doesn’t get tickled after getting their hands on this."

Square Enix: "You have to start by looking back at your play as a kid
and think of what kinds of things you could do…you will be able to make
a completely new form of play."

Namco: "There are great possibilities hidden within this controller."

EA: "Our sports titles might be the first to immediately take advantage
of what this controller has to offer. It’s a brilliant controller, and
as usual we can credit Nintendo with being innovative and neat and
fresh and fun.  They continue to pioneer in our industry…they make
some of the best games in the industry…and we look forward to
partnering with them."

Activision: "It’s designed with an eye on enticing new players to the industry…something we firmly support."

THQ: "THQ is very focused on creating unique and innovative game play
in this next console generation…and Nintendo’s new controller
fundamentally alters the interface between gamer and game in a unique
and compelling way."

Ubisoft: "We were among the first publishers to see it in action, and are looking forward to taking advantage of it…"