As the smallest of the “Big Three” companies, and the only one that’s completely devoted to the game, Nintendo has always been a bit of an oddball as compared to its main competitors, Microsoft and Sony.
At times, the company has lost its footing. While it was the first to launch a motion controller with the Wii, it’s been criticized for being slow to adopt new ideas such as the rising importance online multiplayer, as well as for a hesitance in partnering with outside companies. And it’s handheld business — the part of the company that produced the iconic Game Boy and now the Nintendo 3DS — has also faced a great threat from casual, mobile gaming on smartphones.
But Nintendo is scrappy. The company finally announced that it had turned a profit for the first time in four years last month, buoyed a series of hit games. That came close on the heels of an announced partnership with DeNA, a Japanese company, to create mobile games. It also announced this week that it would let two of its characters show up in the latest “Skylanders” game — a franchise that it does not make.
We sat down with Reggie Fils-Aime, the president and chief operating officer of the company’s business for the Americas to talk about Nintendo’s next moves. This interview has been edited for length and clarity.
We’ve seen Nintendo opening up a little bit, in the past few months, sharing more, sharing more characters. Can you talk a little bit about whether we can expect that as a future trend as well as the philosophy behind that?
I think Nintendo maybe has an unfair reputation. We’re in the entertainment business — we have been for over 125 years, starting with playing cards. Because we’re creators in this entertainment space, we take our intellectual property very seriously. And we want to make sure when we work with business partners or we work on collaborations that we’re partnering with people who understand the value of intellectual property, and can help us in propelling our IP forward.
When Skylanders was first introduced, Activision and Nintendo had already had a number of conversations. Because Activision recognized that with Nintendo’s strength with families and kids, that having conversations with us and creating a business would be effective, but it needed to fit with Nintendo’s philosophies and how we view the marketplace.
So it was the combination of Nintendo getting into the toys-to-life business [with its amiibo figures] and having the ability to have figures that work across multiple games — Skylanders included — plus an execution on the part of Activision that fit with our potential characters. That’s what enabled this idea to happen.
That’s why you see Donkey Kong as well as Bowser in Skylanders — in an Activision game. The development team there, Vicarious Visions, did a wonderful job creating a great game. But what was really impressive was the creative collaboration on the specific intellectual property --on Bowser, on Donkey Kong, on how they move and the types of vehicles they use. I believe the collaboration works so effectively because we have a company that understands IP in Activision.
I don’t think it’s so much that the approach to our IP has changed. I think maybe we’re finding more partners and we’re finding people who really share our vision for how to leverage intellectual property.
Speaking of toys to life, I’m totally fascinated by that trend. Since you launched last year, how has that been going and where do you see it going in th next couple of years?
Our amiibo business is doing phenomenally well. At the end of our most recent financial year, we announced we had sold 10.5 million amiibo across the global territories. Fully two-thirds were sold here in the Americas, in the part of the business I manage. It’s a large business, it’s a significant business, it’s a growing business.
As we look to the future, we’re going to continue to innovate in this space. And you saw that downstairs. We have fabric based amiibo with the yarn yoshi amiibo. We have cards that leverage NFC capability that we’ll be using in the Animal Crossing game.
For us, "amiibo" aren’t just figures. They are a wide range of form factors that allow magical things to happen across a range of Nintendo software. And that’s what we’re going to continue to do.
Speaking of connectivity, across the floor there’s a greater focus on online multiplayer. Nintendo has always been a bastion for couch co-op, but how are you balancing those two demands?
A couple facts and figures — and all of these are focused on the Americas business, that I lead. Both the Wii U and the Nintendo 3DS are highly connected devices, meaning that north of 90 percent of the devices out there are connected to the Internet. With that online connectivity, it really enables online gameplay to happen. That’s why Mario Kart 7 online is so fabulous. that’s why Smash Bros. both on Wii U and 3DS are so fabulous in a connected environment.
So you’re absolutely right, I think, we continue, I believe, to lead the world in couch connected gaming, but we’re continuing to drive our business forward from an online perspective as well, and we’re doing effectively with that part of our business.
So is that something you’ll continue to build into your games moving forward?
Absolutely. The one interesting element though is that Nintendo views the connected experience game by game. Meaning let’s take Yoshi’s Woolly World. We have two-player mode in that game. Because it is such a great couch coop game, we made the decision that it won’t have online gameplay.
But conversely you look at a game like Mario Maker, the ability to upload your levels to the Internet, the ability for people to follow you and know when you’ve launched a new level because they value your creativity, all of that is right for that particular game. So we view it on a game by game basis, what makes the most sense, what type of connectivity do we enable. But make no mistake, we make sure that every nintendo game has an element of social gameplay. Because we believe that’s very important.
I also want to talk about little bit about Splatoon [the company’s all-new shooter.] You do lot to keep your classic catalog and classic characters fresh, but you’re also...
Launching new IP?
Yeah. So I’m also wondering how you weigh that.
Our developers start with unique gameplay mechanics and then they think about, where does it fit best. So for example, the developers for Splatoon shared that the really love that swimming through fluids gameplay mechanic, and they thought about how it could be applied to existing IP. But decided that it really didn’t fit. So that was the impetus to create this brand new IP leveraging squids, and this backstory with octopi — and Splatoon was born.
But it really starts with what’s the gameplay, what’s going to be fun and how do we leverage it back with consumers. We make the decision around the IP to leverage that, what’s going to be fun.
You’ve announced that you’ll be partnering to make mobile games, but you obviously also a have a huge handheld market. Those are similar markets, but not the same market. How do you think about the mobile space?
The way we think about this broad handheld gaming space is first, gamers love to game. They’ll game on home console, they’ll game on a dedicated handheld device, they’ll game on mobile, they’ll game on tablets. They love to game. And so it’s not an either or proposition, it’s all about how do we get the gamer to spend more time playing our content.
Second, there’s a variety of different types of gameplay experiences that you can have. You can have the analogy to a snack, you can have the analogy to a full meal. And what we find is that when it comes to having the full meal, it really is best delivered through a dedicated handheld system. You’ve got the processing power, the full range of inputs and buttons. In our case you’ve got unique features like 3D visuals, the connective experiences around street passing. So for those big robust experiences, a dedicated system makes sense. For things that are a little bit more like a snack, a little bit lighter, a little bit less time consuming, that’s where you’re seeing a lot of smart device gaming. Whether it’s phone or tablet.
And there is a third piece. We’ve said publicly that we believe, done smartly, we can introduce our IP to new consumers through a smart device game. As they see what might be fun about Mario [on a smart device], they’ll then go to the full meal and have a true Mario experience on our dedicated handheld or our dedicated home console.
That’s our logic. It’s all about satisfying a broad range of gamers, providing them a broad range of gaming experiences and in the end being able to monetize all of those experiences whether it’s on smart devices or on our dedicated gaming businesses.
Finally, I know you guys aren’t talking about NX [Nintendo’s mysterious upcoming console]. But looking ahead at the next year of Nintendo, what are things we should really be excited about?
The first thing we should be really excited about are all the great games we’re launching, for Nintendo, we focus on games that are launching over the next 6-9 months, and we’ve got a ton of great content coming. The second thing that people should be excited about are all of the other ongoing innovations that we’re working on that we’re not talking about here today, that’s NX, that’s smart device gaming, that’s our IP partnerships. All of that is there in the future as well.
The key thing for Nintendo is that this is all we do. No operating systems, no TVs, it’s all about making great games, having consumers spend more and more time with our form of entertainment, and putting smiles on people’s faces. And we’ll be doing that in a variety of different ways now and into the future.