Company president Satoru Iwata attempted to allay concerns that Nintendo's growth has peaked, following the firm's decision this week to scale back Wii shipment forecasts and earnings projections for the current fiscal year, which caused shares to slide Friday morning.
He addressed fears that Nintendo's slowing domestic business could be an indication that sales may peak this fiscal year, which ends in March. "I think it is true that new information penetrates through the Japanese market very quickly and that Japanese people tend to get tired of something new very quickly," Iwata stated. "It is also true that the population is smaller when compared with that of other major markets, so it is inevitable that the market starts to feel saturated earlier than others."
Citing previous hardware generations, he noted that the U.S. has twice the sales potential of Japan. Europe, where Nintendo's marketing has improved since the GameCube days, also presents growth opportunities.
"It is not impossible for the Wii's total sales to exceed the final installed base of PS2. Wii still has much more room for expansion," he said.
Nintendo is taking steps to counter slowing Japanese DS sales. In November, the company introduced the DSi, which added more media functionality to the handheld. "We were able to reactivate the Japanese DS market," Iwata noted. The device is expected to release later this year in the West.
Iwata also claimed that many people who are concerned with sales slowdown are using past five-year hardware cycle theories that aren't as applicable to Nintendo's current hardware. For instance, the DS just saw its fifth holiday season and continues to top sales charts.
"I don't think any hardware can enjoy eternal life," Iwata conceded. "Someday, we'll need a new platform for sure, and of course, Nintendo is always preparing for that. However, now that our customer base has expanded this drastically, we do not think it's appropriate to conclude that past platform lifecycle theory can or should be applied to the current generation."
Nintendo said this week that as of December 2008, the company has sold 45 million Wiis and 96 million DS handhelds.
Iwata also said he expects Nintendo to sell more software in the next fiscal year than the current year. "With what kind of software is Nintendo going to achieve this goal? Well, it will be shown at E3 to be held in the U.S. this June."