Mobile still a "core pillar" of Nintendo's strategy, despite Super Mario Run shortfall
"There is still much we have to learn," says president Tatsumi Kimishima; no plans for platform holder to manufacture smartphones
Nintendo's long-awaited push into the mobile space hasn't been quite as disruptive as many might have hoped, but the firm is determined to press on with its plans.
During a Q&A for investors following Nintendo's most recent financial results, president Tatsumi Kimishima discussed the platform holder's thoughts on the future of its mobile business and whether he expected Nintendo to develop its own smart devices.
"Nintendo is a newcomer for the smart-device business, and there is still much we have to learn," he said. "Nintendo has a large stock of valuable IP characters and has developed many games. We cannot, however, simply port our existing games and IP to smart-device applications. A lot of thought is going into what kind of games for smart devices will further our business and how we can continue to foster good relationships with our existing dedicated video game platform business.
"Among the various ideas, a primary concern is enabling our consumers to play on not only smart devices, but also our dedicated video game systems. We want to build up the smart-device business as a core pillar of Nintendoʼs various businesses, but we have not yet reached that level.
"Nintendo is not at a stage where we can consider becoming a smart-device platform developer."
Kimishima's comments follow Nintendo's acknowledgement that Super Mario Run, the 'pay-to-start' mobile platformer analysts believed would kickstart the firm's aggressive growth in mobile, has "not yet reached an acceptable profit level". This is despite worldwide downloads of 200 million, a not insignificant figure.
Nintendo's next release for smart devices will be Animal Crossing: Pocket Camp, which will utilise the typical free-to-play mechanics that drive many of the mobile sector's biggest hits rather than the one-time payment found in Super Mario Run. It also continues to enjoy decent revenues from Fire Emblem Heroes, which launched earlier this year.
Elsewhere in the Q&A, Kimishima reiterated how pleased Nintendo is with the performance of its new Switch console. Providing the device sells as well as expected this Christmas, the president is confident the firm "can maintain the same level of momentum we saw with Wii", Nintendo's most successful console to date.
Switch is on course to surpass the lifetime sales of its predecessor, the Wii U, within its first year. The previous console struggled so badly, Kimishima confirms Nintendo's "cash reserves declined by hundreds of billion yen."
He added: "The peaks and troughs in this business are this extreme, and we need sufficient cash reserves to make it to the next wave peak.
"I wouldn't consider our current cash reserves to be very high, but if reserves increase going forward, we would need to consider different approaches. We are looking at possibilities for share buyback in terms of the timing and what kind of effect that would have, but I cannot say anything specific at this juncture other than that share buyback is something we always have on the table, and we will make an announcement when we are able to do so."