Nintendo’s top executives Answered questions We discuss the Japanese company’s latest financials this week, including answers from President Suntaro Furukawa and gaming legend Shigeru Miyamoto. We’ve posted some questions and answers here for both game creators and aspiring game creators.
About backward compatibility of Switch 2
If Nintendo were to build backwards compatibility into the Nintendo Switch 2, would it hurt sales of the new device? This question was posed to Nintendo President Shuntaro Furukawa during today’s analyst call.
He said the company decided the best course for consumers was to make Nintendo Switch games they’d already purchased playable on subsequent devices. This option allows you to play old games or pick new ones that interest you. In other words, it was the best value for the consumer.
“As a company that provides integrated hardware-software entertainment, we will continue to use a variety of methods to deliver the appeal of the Nintendo Switch sequel, as we always have,” said Furukawa.
He went on to say that a follow-up device would be released later.
Nintendo’s R&D costs rise
Another question focused on Nintendo’s rising research and development costs, which have increased 15% in the last six months, as well as the current state of the gaming market and rising development costs.
“Our research and development costs are increasing every year,” said Shigeru Miyamoto, Director and Representative Director. “As the scale of development has grown, increased costs are inevitable in some ways.”
He continued, “But we believe that what we create is more important than the amount we invest in development. We continue to improve our products until we are confident that we have created a product that will satisfy our customers. With that in mind, it’s important to find ideas worth honing in on, and that hasn’t changed since the days of the Nintendo Entertainment System.”
Miyamoto is a game development legend who created iconic Nintendo games from Mario titles to Donkey Kong.
“Because everyone has different interests, it’s impossible to make blanket statements about which ideas are worth pursuing. “But one of the things we are certain of is that it has to be something that has never existed before.” “The more you hone in on something that didn’t exist before, the more value you gain. We believe it is important to nurture developers who take this unique concept to heart, allocate funds to development where necessary, and release games only after they are confident in their product. “We repeat this process over and over again.”
And Mr. Miyamoto said, “On the other hand, in the entertainment business, it is possible to create attractive products based on interesting ideas without spending a lot of money. Children’s toys are a prime example of this. We believe that not every product needs to cost a fortune. Even in the case of video games, current technology makes it possible to create interesting games with a small number of developers in a short period of time. We believe it is important not to lose sight of this perspective.”
Executive Director Shinya Takahashi said, “Rather than spending a lot of money on each game, we believe that by expanding the ideas of a few developers, we can create unique titles that are small in scale but worth refining.” “While overall research and development costs are increasing, there are certain products where our approach will keep costs relatively stable.”
He added, “In addition, Nintendo Switch’s development software and environment have advanced significantly compared to previous hardware, providing a variety of ways to mitigate cost increases.” We’ve built an environment that leverages these advancements to allow Nintendo’s unique creators to create games.”
CEO Ko Shiota said that it is important to provide an environment where game developers can work efficiently in terms of hardware and systems.
“As explained in today’s presentation, the merging of home consoles and portable systems allows us to unify two previously separate software development environments. Since we are already familiar with the Nintendo Switch, maintaining a similar foundation for our future development environment will allow us to continue the experience we have already built and reduce research and development costs over time,” said Shiota. “I think the most important thing for Nintendo is how to create new ideas. “More budget doesn’t necessarily mean better ideas, so we want our teams of hardware and software developers to be able to share their ideas and stay focused on the process of creating something interesting.”
Mr. Furukawa said, “In order to create a Nintendo product that integrates hardware and software, we need to invest in a development environment. “Investing in our development environment, including the spending on Building 2 of our Headquarters Development Center (tentative name), described in today’s announcement, is a key plan to leverage the cash we have.”
The launch of Nintendo Music and ambitions for Nintendo Switch Online
Another question concerns the launch of Nintendo Music, a music streaming application available to Nintendo Switch Online members. The questioner wanted to know more about the direction Nintendo is heading with Nintendo Switch Online.
Furukawa said Nintendo Switch Online is designed to enhance the Nintendo Switch experience, and the basic goal remains the same.
“Nintendo Music is an app that allows Nintendo Switch Online members to listen to Nintendo game music on their smart devices. Game music is an important part of our content library, and we believe this service is consistent with our strategy to increase the number of people who have access to Nintendo IP. “We launched Nintendo Music to bring this game music to consumers in a uniquely Nintendo way,” he said. “I think when people listen to Nintendo Music and it brings back memories of playing our games, they’ll start playing those games again. As a result, we hope Nintendo Music will be another reason for people to maintain their Nintendo Switch Online membership.”
What Miyamoto says to new employees
Another question mentioned the lecture Miyamoto gives to new employees every year, as mentioned in an article about the Nintendo Museum. The questioner asked how a genius like Miyamoto can communicate his creative thinking to others in the company.
Miyamoto said he did not consider himself a genius, but rather, “I consider myself ordinary.”
He said, “I give lectures to about 100 to 200 new and mid-career recruits every year, and afterward, people often say they are curious about what kind of person I am, and they feel relieved that I look surprisingly ordinary.” I often think that it would be fun not to work, so if I have to work, I always think about how I can do it more efficiently. And if you’re trying to do the same thing, how can you achieve greater success? Because if the project is successful, future work will be easier. The lecture I give every year addresses the challenges that come with creative work.”
He said his annual lecture is divided into three parts. The first part covers Nintendo’s history, starting with Hanafuda cards, through toys, and on to the entertainment company it is today. The second part focused on what Nintendo values in game creation and what its strengths are.
“For example, we discuss the evolution of gaming interfaces by tracing the development of controllers since the arcade days,” he said.
He said the third part deals with game design. New developers, especially avid gamers, often want to create upgraded versions of games they’ve previously played, but that’s not what game design is about, he explains. Rather, it’s about observing the world around us and figuring out how to combine these elements into a compelling video game.
“I explain that game design is planning. “In other words, we evaluate what hardware and development environment should be used to create a game, evaluate whether the desired game can be implemented with available processing power, and go through trial and error to implement it.” “I think it’s refreshing that many attendees feel that this perspective is different from their own game design concepts or resonates with our product creation philosophy. Since the lectures last only about two hours each year, I think it would be helpful to visit the Nintendo Museum and explore the history of past challenges to help employees remember what they have learned.”
“Nintendo’s creators of various games leverage their individual strengths to create unique products,” said Takahashi. After hearing various stories from Mr. Miyamoto,
We work closely with him to create the game and consider how we can apply these ideas to each of our areas of expertise.”
And Mr. Takahashi said, “The producers reflect on the philosophy shared by Mr. Miyamoto while creating games that suit their individual aptitudes, and share this perspective with the development team.”
Makes hardware unique and easy for developers.
Another question focused on how to make new hardware devices unique and easy to develop. It’s great if the device is unique, but software publishers may have a hard time creating games for those platforms. (It’s worth noting that the Switch is so unique that game publishers often only make games for Xbox Series X/S, PC, and PlayStation 5. Games like Call of Duty won’t appear on the Switch.)
Shiota said that the unique features and characteristics of Nintendo hardware are not created by hardware developers alone.
“We are working closely with our software development team to consider how to deliver a unique entertainment experience. Of course, we also consider the gameplay of other software publishers during this process,” Shiota said. “Throughout the development process, we build various prototypes, test how they feel, and then refine what we think is good. This iterative process is very important. “But these days, not only are hardware and software important, but so is the system software that runs both, making hardware development a collaborative effort involving three different groups of developers.”
“Nintendo has always focused on introducing unique products to the global market, so we will carefully balance originality with the ease of software development as we strive to create unique Nintendo products,” said Shiota.
