Nintendo Outlines 2014 Strategy

During an investor briefing Wednesday night Nintendo president Satoru Iwata laid out the company's plans for 2014, which he hopes will turn things around for the company. Iwata laid out plans for the Wii U in 2014 including new marketing initiatives, new game releases and technology, and a focus on making sure that consumers understand that the Wii U's Gamepad is not just an add-on to the original Wii.

The company will accomplish the latter by creating a new marketing initiative that focuses on just what the Wii U Gamepad is capable of and the fact that it is not an add-on. Iwata admitted during the briefing that this was an issue the company has struggled with since the system launched.

Iwata also said that the company will actively seek to build relationships with companies interested in licensing some of their biggest IPs and characters such as Mario and Link.

"We are planning to utilize Nintendo's abundance of character IP more actively," Iwata told investors. "I think the reason that Nintendo is now considered to have this 'abundance of character IP' is perhaps because of our passive approach toward the character IP licensing business, which tends to have a high risk of damaging the value of the character. In other words, we think that spending time to develop our approach of having our characters appear mainly in our carefully selected games has created our current fortunate circumstances. However, we are going to change our policy going forward."

Iwata also talked about a flexible pricing structure that would reward more engaged gamers with lower game prices.

"Until now it has been taken for granted that software is offered to users at the same price regardless of how many titles they purchase in a year, be it one, five or even ten titles," said Iwata. "Based on our [Nintendo Network ID] account system, if we can offer flexible price points to consumers who meet certain conditions, we can create a situation where these consumers can enjoy our software at cheaper price points when they purchase more."

Consumers could also earn special perks by inviting friends to play games or doing other things with Nintendo hardware and software that generally promotes the brand.

"Here, we do not need to limit the condition to the number of software titles they purchase," Iwata continued. "Inviting friends to start playing a particular software title is also an example of a possible condition. If we can achieve such a sales mechanism, we can expect to increase the number of players per title, and the players will play our games with more friends. This can help maintain the high usage ratio of a platform."

Iwata also mentioned plans to dedicate a small team to develop a smart device 'service', which could include the "possibility" of smart device games featuring Nintendo characters.

Another area Iwata highlighted during the briefing was health improvement-related products. Dubbed the 'QOS Platform' (Quality of Life), Iwata said that Nintendo plans to "take on the challenge of expanding into a new business area" and "extend the definition of entertainment" with a health-focused venture that will be "independent from our video game platform business."

"What Nintendo will try to achieve in the next 10 years is a platform business that improves people's QOL in enjoyable ways," said Iwata, revealing a plot to launch a health-focused "hardware-software platform business."

Another topic that was discussed was the length of time it takes to boot up the Wii U. Iwata said that a new firmware update would add a 'fast start-up menu' to the console in early summer. He said that the 20-some-odd seconds it takes to load the Wii U up "significantly impairs" the console's simplicity of use.

"We think that this function will make you feel that the time to start up a Wii U software title is cut by more than 50 percent, and that it will also lead to more Wii U users understanding the appealing nature of the GamePad," said Iwata.

Nintendo also announced during the briefing that it will release Mario Kart 8 on Wii U in May.

One thing Iwata said that the company had no plans on doing was giving the Wii U another price cut anytime soon.

"Under the current situation where the company has to report an operating loss, simply executing a price reduction as a way to defuse the situation is not an option," he stated. "In the short-term, Nintendo will focus on thoroughly enriching the value of the most significant feature of Wii U, the Wii U GamePad," he said.

Instead the company will ramp up marketing efforts to create a better understanding of the system.

"Our top priority task this year is to offer software titles that are made possible because of the GamePad," said Iwata. "We have managed to offer several of such software titles for occasions when many people gather in one place to play, but we have not been able to offer a decisive software title that enriches the user's gameplay experience when playing alone with the GamePad. This will be one of the top priorities of Mr. Miyamoto's software development department this year."

Finally, Nintendo said that it is now possible to bring DS titles to the Wii U's virtual console. Iwata did not say when it would bring the DS Virtual Console titles to the big screen of the Wii U.

You can check out Nintendo's entire investor briefing here.

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