The president of Nintendo, Satoru Iwata, answered questions in a Nintendo conference Q & A session. This is a very interesting read for all Nintendo fans.

Here are just a few of the highlights:

Question: I have some questions about Nintendo 3DS. You have just announced the launch date of February 26, 2011. Tell me the reason why you will not launch it in time for the holiday season, when the biggest demand can be expected. Was it just because you cannot make it in time for the year-end? Regarding the price, 25,000 yen appears to me to be a bit expensive because, for one thing, it is more expensive than Wii, your home video game console. What is your opinion on my impression?

Satoru Iwata: First about the launch timing, when we made the original financial forecasts for this fiscal year, we thought that it would be desirable to launch Nintendo 3DS by the end of this calendar year and, with that as the premise, we made the financial forecasts and the plans. The developments are making progress, and we have been proceeding ahead in order to start mass production. By now, however, we have come to understand that, if we launched it this calendar year, it would be difficult to produce a sufficient amount. Also, in terms of the completion level of the product, we believe that it will reach the most satisfactory level by our standards if we will launch it on the date we just announced.

For platform businesses, rather than focusing on the current fiscal year’s performance alone, the most important thing is to provide a healthy launch for a new platform because, as part of Nintendo’s core business, such platform will need to be able to support Nintendo’s business performance for the years to come. As it is desirable to prepare a sufficient amount for a sound launch and, at the same time, as we will also be able to further raise the product’s completion level, we have come to the launch date that we just announced. On the other hand, I recognize that it has generated a negative effect upon this year’s annual financial forecasts.

About your second question of the price point, you indicated your concern that it is more expensive than Wii. Portable video game machines integrate both a gaming device and a screen. You do not need any other hardware devices to be connected in order for you to play with it. We do not think, “the price relationship between portable devices and home consoles must stay intact simply because it used to be that way.” While it is always better for the price to be as accessible as possible, in terms of its cost, and in order to make a healthy and sustainable business for both the hardware and the software, and given the positive reactions since E3, which give us the indication on how the public are likely to appreciate the value of Nintendo 3DS if they can have hands-on experiences and, above all, by taking other factors into careful consideration, we have concluded that we should propose this price point to our consumers.

Question: With the SpotPass of Nintendo 3DS, as we can expect to see an increase in the access points, I can see the potential for the expansion in your business model. I think the company can expect to receive profits from other companies who do not belong to this industry, and I would like to know Mr. Iwata’s opinion on this. For example, will it be possible for companies other than NTT and McDonald’s to advertise?

Satoru Iwata: We have just announced that in our collaborations with TV broadcasters, they will distribute their 3D videos to Nintendo 3DS on a trial basis. Since a private TV broadcaster’s business is based upon ad income, they are going to investigate the potential of ad income which can be gained from short but attractive 3D images.

One thing which we are extremely careful about is that with SpotPass, while it is a new mechanism with the potential to explore an attractive future, Nintendo 3DS could become a platform which users consider as one for myriads of spam*-like ads to arrive if we were to handle it poorly. In other words, if our consumers think that the content delivered to Nintendo 3DS is unnecessary or even upsetting, SpotPass will lose its potential value. So, we must create a perfect balance between the value of the information to be delivered and whether or not our consumers will welcome this information. Once we can do so, and if we can establish a situation where our consumers can receive a variety of valuable information which is in line with their tastes, and without the need to proactively do anything in this busy world, SpotPass will be able to show its great potential. We’d like to pursue various possibilities with many companies.

Question: Now that you are intensifying the Internet connection environment, will you be able to beef up your countermeasures against piracy? For example, can you automatically update the hardware’s firmware when you think it is necessary?

Satoru Iwata: As one of the functions of SpotPass, we are considering to automatically update the hardware through the network. Countermeasures against piracy are not the only purpose, of course. For example, so far, when we try to offer some new attractive function, our consumers first have to turn on the subject game system and go through a manual procedure in order to download and install the system update. As a result, not so many people were willing to update their hardware. This is the actual experience we have had. So, we want to make it so that Nintendo 3DS hardware shall be (automatically) updated through the network, but the prevention of piracy is a secondary effect. The primary purpose is for as many consumers as possible to be able to make use of the new functions that we propose.

For your information, Nintendo 3DS will also have a function so that, when a consumer purchases new (packaged) software, that software ROM card will be able to initiate the device’s system update. We expect a significant increase in the ROM memory capacity for Nintendo 3DS software, so much so that such programs can be added. With that, we can offer some new proposals to users and, at the same time, it can be used to prevent piracy.

Question: What is the background to raising the specs higher than in the past? According to Mr. Iwata’s past explanations, the new hardware shall be launched only when you have done everything possible with Nintendo DS, but why do you need a game machine with such high specs? Not to change the subject, but I have a concern that Nintendo 3DS, with such high specs, may run out of the battery during StreetPass communications. When I turned on my Nintendo DS one morning and kept it on until I returned home that day in order to enjoy the Tag Mode communication of “Dragon Quest IX”, it run out of battery and my data was lost. Are you planning to do anything with Nintendo 3DS in this regard?Finally, when I look at the fact sheet for Nintendo 3DS, I notice that the hardware package box will include an SD memory card. Won’t you embed internal storage capacity for Nintendo 3DS? Will users activate an application directly from the SD memory card?

Satoru Iwata: First, about the specs, this time we have designed the hardware so that developers will not think that they cannot make the software that they would really like to make (on Nintendo 3DS) due to spec limitations. Another thing I’d like to discuss is about its capability of generating 3D images. For many years, Nintendo has been trying to make it happen. And the reason why we have come to believe we can finally make it with Nintendo 3DS is the availability or the good combination between the graphics capability of the 3D LCD, its resolution and the ability of the hardware to generate 3D images which can deliver the realism of the 3D world. More specifically, we needed a certain level or higher of LCD resolution. With the LCD, we needed a certain level or higher 3D projection capability. We needed hardware which could generate a certain level of the realism when it creates the 3D graphics. I understand that a number of you were able to have the hands-on experience of Nintendo 3DS today. The level of the 3D expression that you’ve just experienced has been realized by the combination of these factors.

The Tag Mode of Nintendo DS has already been fun, but there were certain limits as to what it could do with Nintendo DS. While we understood that it would be good if Nintendo DS players could easily pause game play at any time in order to do other things, the specs of Nintendo DS did not allow us to do so. Above all, we needed to improve the system, such as how we could add much more memory and what needed to be done on the CPU and so forth. We intensified the hardware so that a number of new ideas that were impossible before can now be the reality. For example, we shall be able to make new proposals about what you can do by easily pausing the game on play.

Another concrete example is AR (Augmented Reality). While 3D image production ability is suited to AR games, doing so requires a certain type of processing capability. So, taking into consideration various factors, we have come to the current specs.

As for the battery, it is inevitable that Nintendo 3DS will be a device which requires more frequent recharging than Nintendo DS. This is why we are going to include the cradle, which is a dedicated battery charger. Perhaps we may need to dispatch to our consumers a message, something like, “Please place your Nintendo 3DS on the cradle as soon as you return home with it.”

As for your final question, Nintendo 3DS, in fact, embodies storage (NAND memory). However, we’d like to use it mainly for the system. Our consumers’ needs widely vary depending on who plays with Nintendo 3DS. Some won’t need the expanded memory at all. Some will download much software onto Nintendo 3DS. If they download many titles, the SD memory card that we will include shall not be big enough. We wanted to make the system, so that, when Nintendo 3DS owners require additional memory, they could do so simply by inserting a new bigger-sized SD memory card. We have designed the system as if the hardware’s internal memory can be expanded simply by adding a new SD memory card. The owners can save the software on the new SD memory card and activate the software from the SD memory card. The ability to be able to do so can sometimes contradict with the maintenance of tight security. We would like to brush up on that aspect before the launch.

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