A little over a year ago, TIME engaged Nintendo President Tatsumi Kimishima in a wide-ranging conversation about the company's fledgling mobile strategy, its struggles with the Wii U, the rise of its toys-to-life Amiibo figurines and a mystery-cloaked next-gen platform then known only as "NX."
Three mobile apps and a sold-out "classic" version of its 1980s NES console later, with a $299 hybrid/TV games console dubbed Nintendo Switch due on March 3, TIME caught up with Nintendo's principal figure to talk Switch, mobile profitability, how he's liking the job so far and more.
TIME: What's your relationship with Nintendo Director and Entertaining Planning and Development boss Shinya Takahashi like?
Tatsumi Kimishima: Mr. Takahashi started out as a designer, and then as far as his career at Nintendo, he really worked with various development teams, where he worked as a coordinator for different environments. He was the guy they would bring in to pull all of these disparate things together. That was his main job while working with development teams.
One thing that's a little bit different between [Donkey Kong and Mario creator] Mr. Miyamoto, say, and Mr. Takahashi, is that Mr. Miyamoto is of course known as the father of Mario, as well as for the characters and games he's helped develop. Mr. Takahashi, by contrast, is someone who really covers everything. Not only does he know an individual game, he knows the direction in which the development took place as well as the environment that was behind it. He's been someone who knows the overall workings of each individual game. Because he has this history and this vast knowledge, he has all of my confidence in his ability to continue to do that job.
As far as my relationship with Mr. Takahashi goes, when Mr. Iwata was our president, Mr. Takahashi was there as his right hand man, supporting him, giving him information on progress through development and different directional advice, and so my relationship was through the window of Mr. Iwata. I wasn't directly connected. It was through Mr. Iwata that I knew Mr. Takahashi, and we interacted that way. However, with the passing of Mr. Iwata [in July 2015], I'm now receiving the same support from Mr. Takahashi that he previously provided Mr. Iwata. So I now have a direct relationship with him, much in the same way that I previously had with Mr. Iwata.
One thing that's different from when Mr. Iwata was president, is that Mr. Iwata was a developer, so in some ways hardware development also ran through him. Now, as I don’t have that background as a developer, Mr. Takahashi also works with Mr. Shiota [Ko Shiota, head of Nintendo's Platform Technology Development Division], who is in hardware development. Mr. Shiota works under Mr. Takeda [Genyo Takeda, Nintendo's "Technology Fellow" and counterpart to "Creative Fellow" Shigeru Miyamoto]. So Nintendo’s hardware and software development and its overall entertainment development happens under Mr. Takahashi, with this constant communication between software and hardware development. That’s different.
When we spoke in late 2015, you told me mobile was a means to drive people back to Nintendo's core platforms. That was before the mania around Pokémon Go and Super Mario Run. Has your mobile strategy evolved in light of their success?
With our mobile business, we have three goals. One, of course, is because there are so many mobile devices in the marketplace and in the hands of consumers, this is a great tool for us to push our IP to a large number of people. This is a great way to introduce them to our franchises and characters, and thereby bring them back to Nintendo's dedicated hardware as well as introduce them to Nintendo's expanded software library.
Number two, we'd like mobile to be a pillar in and of itself—a business pillar that is profitable.
And the third goal for our mobile business, in the same way it worked for Pokémon, is to use games on mobile devices to increase the sales of other games we develop with the same characters. This is synergy, right? In this way we hope customers will purchase other related goods and services, too. We want to use this synergy.
I've spoken with publishers in the West who claim even the most popular mobile games are less profitable than many think. Can you comment on that in view of Super Mario Run's numbers?
At this point Nintendo has launched three mobile titles, Miitomo, Super Mario Run, and Fire Emblem Heroes, which launched on February 2. With Miitomo, which was a game that involved Mii characters and communication, we really wanted to see how we could with this first foray into the mobile market communicate with the public. More than looking at profit we were wondering if we could get people interested in Nintendo characters on their mobile devices. And the result is that we think we’ve seen a commensurate expansion in that interest.
We haven’t reached 20 million downloads yet, but I think we’re around 18 million downloads for Miitomo, which shows how many customers we’re reaching. With regard to Super Mario Run, as of the day of our latest financial announcement, we’ve had 78 million downloads. With regards to how many people have paid money, we’re hoping for more than 10%, and while we haven’t yet reached 10%, at this point we’re somewhere north of halfway there.
However, if you analyze this, it’s pretty interesting. The game is being distributed in more than 150 countries, but it’s the top 20 countries that account for more than 90% of the total revenue. If we look further at the people who are paying for the game within those 20 countries, we’re not at 10%, but the number is rising. So what is it that I’m trying to say? If we look at the countries where the game is on sale, how many people are paying for it, the way the game is being monetized, for 1,200 yen in Japan and for $9.99 in the U.S., and we look at how customers are reacting to a one-time payment option, I think we can see that this a viable way to do business. I would also add that this is a new way of monetization and so not yet popular.
Lastly, Fire Emblem Heroes is a free-to-play style game in which you can purchase items. Less than a half-day after its release, it had been downloaded over a million times, and we’re seeing revenue today at $5 million U.S. dollars. The point I’m making is that we’re experimenting with different types of monetization. There’s the type I mentioned we’re using with Super Mario Run, and the different style we’re using with Fire Emblem Heroes. As a result of these experiments with monetization styles, we’re gaining what you might call confidence in our mobile business efforts.
Am I right in thinking of Switch as a kind of stealth campaign to deliver something core gamers will buy up front, then literally carry to a broader audience?
We looked at the launch of Wii, we looked at the launch of Wii U, and over the course of launching those games and supporting those products, we gained a lot of insight and experience. The entire time we were doing this, we were looking forward and saying, "Okay, how are we going to present and introduce and launch Switch to the public?" I think the public sees that Nintendo is doing something different. They can look at it and they go, "Okay, that's a different-looking console." They look at the third-party support, they look at what the developers are bringing to the platform. That's different, and then the folks who are getting hands-on time with Switch are then having those beliefs confirmed through their own experiences.
I do believe that career gamers are going to need extra time to understand that we're doing something different [with Switch]. They really need to get the opportunity to play. We need to get this into people's hands. And so we are really, as you said, running a guerrilla marketing program where we're just dashing around and trying to have as many events as possible and get it in the hands of players so they can experience the difference.
Now they're going to be saying to each other, "Hey, this is a different gaming experience. This is something we haven't seen before. I just played it, I did it, and I'm going to tell my friends and they're going to tell their friends, and then the next person's going to play it." And if you're watching the Super Bowl, you're saying, "Wow, look, Nintendo really is going all out." We've been trying all kinds of different ways to get that message out, so that people understand it is different.
Can you say any more about what Switch's online service is going to look like?
So far we have announced that from the fall, Nintendo's online service will be a paid service, and we have announced that the price range will be between 2,000 and 3,000 yen [$18 to $27] per year for that service. We've also announced that friends will be able to play online, and they'll be able to use a dedicated smartphone application that enables voice chat during those games.
More details are forthcoming, but I just want to make sure that everyone understands that we will be going above and beyond to make sure that our customers are getting a service that is worth paying for, so we're paying special attention to make sure that this is, again, a valuable service that they will appreciate from us.
How are you able to offer something ostensibly comparable to what your competitors do at that price?
I think if you look at some of our competitors, you think that when I say 2,000 to 3,000 yen per year, that's a bit underpriced or cheap. But we are really dedicated to bringing our online business to the consumer at that price point. Online play with Switch is going to be something that's key to the business, and we had a ton of discussion internally within Nintendo to come up with what we thought was a reasonable price on how we can connect with our consumers.
We really think that regardless of what others are doing or what services are being offered, it comes down to a battle of content. We feel it's a matter of getting our content to the consumer at a price point that will make them happy, and then we're willing to look at what else we can do going forward. This is just the starting point for us, so again, it's a battle of content. We think we have what we need to win the battle on that front, and we hope to provide more details about the service going forward.
Is Switch powerful enough to emulate Wii U games, or would they have to be ports, like Mario Kart 8 Deluxe?
We can take games and bring them and make them playable on Switch. So they can be remade for Switch, yes.
That said, Switch is not backward compatible with games designed for other systems, and is not currently compatible with controllers designed for other systems. Support for certain controllers may be considered for a future update. In some cases, games from past systems may be re-released for the Nintendo Switch system as either enhanced or original versions.
Will Wii U apps like Miiverse, Mii Maker and Wii U Chat make an appearance on Switch?
In terms of the applications available on Wii U, all of those are not necessarily transferred or installed. In principle, we think about which application needs to be improved or discontinued by looking at consumers' reactions. Mii characters can be used to represent a user profile, for instance, but are not required. Users also have the option to choose a profile picture from an included library of Nintendo character images. Mii characters can still be used in games if developers choose to include them.
As for Miiverse, while Miiverse will continue to be supported on the Wii U and Nintendo 3DS systems, our approach with the Switch is to make greater use of other established, broadly used social platforms. For example, capturing gameplay screenshots to share on popular social networks, and social features such as voice chat are possible with smart devices through our app.
Concerning Mii Maker, on the Switch the software to create Mii characters is now located in System Settings, and no longer resides on the Home menu as a standalone application. You can also create a Mii character from the Profile screen. Making Mii characters is similar to the method used on past systems.
Next, whether Nintendo eShop is fully supported and functioning for Switch at launch, we can confirm that it will be possible to purchase and play downloaded software at launch, but we are not sharing further details at this time. And in terms of the Internet browser, since all of our efforts have gone toward making Switch an amazing dedicated video game platform, it will not support it, at least at launch.
What about virtual reality? Is the launch version of Switch powerful enough to support it?
The very simple answer is yes. We've said this before, and I feel like we're saying it a lot, but we are interested and doing research into this field. The question, of course, is "What is the best way to bring virtual reality to our customers as a form of entertainment?" Not just, "Hey, look! It's realistic!" or whatever, but what is the best way to use this technology to bring something fun to our consumer base? We are definitely looking at that.
Thinking about 3DS and Wii U, do you still believe in the two-screen approach? Will we see a direct successor to the 3DS?
We are not creating a successor to the 3DS right now. We are, however, still thinking of portable systems. We are thinking of ways that we will be able to continue bringing portable gaming systems out, so yes, we are thinking of different ways to continue the portable gaming business.
Your mobile device history, from the original Game Boy to the New Nintendo 3DS, has seen you release new models more frequently than with your TV consoles. Since Switch is of both worlds, will it look more like your handheld or TV systems when it comes to newer versions?
We want Switch to sell for a long time, of course, and we hope it has really long legs. That said, technology, of course, advances quickly, and so I'm not going to say that we have a team working on the next thing. But we obviously have people looking at new technologies and thinking of new ideas even now as we speak.
You've said that your biggest worry about Amiibo is that buyers are collecting instead of using them in games. Have you figured out how to solve this?
As far as having people who are trying to collect Amiibo, it doesn't mean that we're going to be making a ton of Amiibo. With Switch and the Joy-Con, we do have an NFC [Near Field Communication wireless] reader. And so our goal, rather than producing mass amount of Amiibo for collectors, is to forge a better connection between gameplay and Amiibo itself.
Is the "quality of life" initiative still underway?
The development is continuing. Our challenge is to create a Nintendo product that will satisfy consumers.
We haven't heard much about Miitomo lately [Nintendo's first mobile app]. Is it something you intend to support going forward?
The number of Miitomo downloads is gradually but continuously growing. Many people are playing with Miitomo every day. It will soon be a year after its release and this app has played an important role as the first Nintendo smart-device application. We will continue to thoughtfully think about the role of this app for the future.
Is eSports going to become a Nintendo pillar?
We think eSports is the business that many consumers expect us to engage in now and in the future. We think titles such as Splatoon 2 and ARMS for Nintendo Switch have suitable elements for eSports. On the other hand, we are considering what Nintendo-like eSports can be in terms of the business model, and the rewards for the outcome of the battle.
You told me a story last time about solving Wii shortages in 2008 and 2009. Any thoughts on Switch availability solutions as the launch nears?
Looking at responses from consumers, we are seeing that launch day preorders have nearly reached the maximum available. We will deliver Nintendo Switch orders as early as possible after the launch. Our plan under the financial forecast is to ship two million units by the end of March, and we are increasing its production. We hope to see strong sales momentum like we saw in 2008 and 2009 [for the Wii]. Based on this experience, we have already started to think about how we should plan our production of Switch for 2017.
For years Nintendo has talked of revitalizing local face-to-face interaction. With Switch, you're offering experiences so "local" that they literally take the "video" out of video games. We've heard a lot lately about the perils of social media, the chaos and noise and the siloing of thought. I know Nintendo isn't into social engineering, and that in the end you think of yourself as an entertainment company, but is there any part of Switch that involves you trying to think at the level of social responsibility?
This is just my personal opinion, but of course, Nintendo, as you say, is an entertainment company, so we ask ourself, "What is entertainment? What is it to begin with?" It's not just enough for us when we bring content to consumers, but we want to bring something that is comforting or comfortable. I think comfort is a word that comes up when I think about what it is that we have to provide for our consumers.
Now comfort might be too limiting of a word in English for me, but it's enjoyable, it's pleasurable, so all of these things together. Of course, there are different ways that people experience that, and there are different ways to bring that out. One of those ways would be, of course, a single player sitting in front of their TV playing a game. That's an option. That can be enjoyable for them. But when I think of what it is that makes people happier, when I think of what is a pleasurable experience, I think of people working together to solve a problem or to overcome a challenge.
For example, if you have friends who are playing together to solve something, or I see parents and their children working together to accomplish a specific goal, it's something I would put into my definition, that slot of what is comfortable, what is happy, what is pleasurable. Also, seeing other people happy. Being in a room where people are happy is a source of happiness, is a source of pleasure.
With Switch, it's not just something that you'll be looking at a screen to play. In certain cases you don't even have to look at a screen. Again, we're seeing people face-to-face as you said. We're seeing that gap between people become smaller.
Mr. Yamauchi [Nintendo president from 1949 to 2002], towards the end of his life, said that if Nintendo was ever unable to go its own way, it would have to end. Do you think that's still true today?
I heard this directly from Mr. Yamauchi. He said "This is up to you guys, but you have to create unique experiences, you have to do things that other companies cannot imitate, that is your mission." And that is what we are planning to do.
The word he used was cleverness or craftsmanship, this ability to create something new that we haven't seen before. We have this DNA running throughout the building, running through our company, not only with the hardware or the software, but in whatever we do. And part of what we bring to it is, of course, the IP that we have.
We have to be very diligent and very careful about how we use that IP, because it is a finite resource in my opinion. So we're going to have to expand and change how we look at our IP, how we use it, how we come up with new IP. We have to think about the process by which we are cultivating that creative spirit, using our DNA to create unique things that others can't imitate. And then we have to look at other people, not just the ones we're raising up within the company, but those outside with great skill and ability and creativity.
When we spoke last, you'd just become president. What's it like a little over a year on?
As we talked about before, my assignment here at Nintendo is multifold. One of the things that I have to do is, of course, to monitor our projects and make sure they're going well and that we're bringing them to fruition in the way we'd originally hoped. One of those, of course, is Switch, and we're getting ready to bring it out, so that is one dream that I think we've accomplished at this point.
The other thing to talk about is nurturing the young talents we have within the company. These different developers that perhaps the public hasn't seen but we have, and now we've been able to bring some of those guys out and introduce them to you. That is an ongoing portion of my role here as well, and of course, something else I'd like to add is just thinking about the future, what unique things, whether those are businesses or services or whatever that we can bring from Nintendo. It is, of course, a very tough business, and it's a tough job, but if I can help create at least one more unique thing for Nintendo to bring to the world, I think I'll be really happy.