Nintendo’s Reggie Fils-Aime: “Very Optimistic”
Wouldn’t you like to be Reggie Fils-Aime right now. Things probably couldn’t be better for the President of Nintendo of America — largely the face behind the popular “Wii” phenomenon — despite the global economic troubles.
While other executives speaking at the BMO Capital Markets Interactive Entertainment Conference today sprinkled words of concern into their otherwise upbeat addresses, Fils-Aime plainly and confidently said Nintendo is doing just fine, thank you very much.
Reuters talked to Fils-Aime about Wii availability, the DS handheld game, the future of ‘packaged’ games versus online games, and price cuts.
Reuters: Many of the executive speaking at the conference said they were cautiously optimistic about the video game industry during the holiday season. What’s your view?
Fils-Aime: If I look at this from an industry perspective, I think ‘cautiously optimistic’ is quite appropriate. If I look at it from a Nintendo perspective, i would say ‘very optimistic’. We have very strong products in the marketplace — both hardware and software. The Wii console continues to sell out, (and) on the DS side, we are at almost 20 percent growth year on year, on a record year in 2007. We have had very strong software growth, both console and handheld. And we have just launched Wii music (and) we are about to launch Animal Crossing. So we need to execute and continue delivering strong value and strong entertainment choices for the consumer, and if we do that we should have a robust holiday season.
During your presentation, you mentioned that the Wii had a “monster month” in October. Does that continue into November and December?
We certainly hope so. When I talk about a monster month it’s based on our own internal data for monthly sales in October. Later on Today the NPD (a research firm) data will come out — I am certain that it will reinforce the type of month we’ve had. It very well may be that for the month of October, our sell through on Wii may have been the best ever holiday sell through for the month of October on any console in American history. That’s what gives us the belief that if we simply execute we should have a strong holiday season.
That brings to mind the question of availability. Will your products be available this holiday season? Will there be long lines and sold out stores like there was last year?
We certainly hope not. Our goal is to have every consumer who wants a Wii console or a DS to be able find it during the holiday. We have increased by 50 percent the amount of product that is coming into the us, Canada, Latin America. We hope that that is enough product. But even with the strong sales that we have seen in October and so far in November, we are still suffering out of stocks. My message to the consumer is, if you see a Wii and you are interested in a Wii this holiday, buy it as quickly as you can.
Earlier in the conference there was a healthy panel discussion that contemplated the end of the line for “packaged” video games, and the advent of online gaming. Is that the future?
What nintendo has seen is a large installed base with strong innovatinve highly entertaining products sold at the right price. We can sell high volumes of software for very long periods of time. On the DS we have seen tat with Brain Age”, “Brain Age 2″, “Mario Kart”, new “Super Mario Bros”. For the Wii console we are seeing that for Wii fit, with Mario Kart. So we believe that there can be this concept of evergreen titles as long as the proposition is right.
Given that, one wonders if you ever need to develop a new console. How long does this generation last? Are there any plansto develop a new console soon?
We believe the role of a new console, a new system, is to bring great new entertainment ideas to life. We launched (the Wii and DS) those systems when we had great ideas that would benefit either from a touch screen or from a Wii remote. We will consider the launch of new consoles when we have got great new entertaining ideas that can only be done with a new console. As we sit here today the Wii console has a long run ahead of it, (the DS too). At some point we will launch the DSi here in the Americas. So as we look at the near term for us its all about maximizing the opportunity with the (Wii and DS).
Some suggest there will never be a next generation of consoles, due to the imminent rise of online gaming. Do you buy that idea?
I don’t buy some of the core propositions. We have seen with our own systems that the consumer wants an experience that today is better delivered via packaged content. There can be add-ons and additional content but the sheer amount of entertainment enjoyment — 50, 60 hours – is pretty difficult to provide through an Internet connection. So I believe that certainly in the near-term the current approach of packaged software with some additional online play that works from a community standpoint and a content creation standpoint is probably the model.
Now that Microsoft just cut prices on the Xbox, you are the only console maker to not cut prices. Will you?
The consumer is voting with their wallet and their pocketbooks that the Wii and the DS represent fantastic values. So far this year, month in and month out, the Wii and DS have been number one and number two selling systems for the month. That suggest our value equation is finely tuned at this point.
So no price cuts?
There is no need for price cuts on our systems today.