David Yarnton on Nintendo's evolution

With more than one million Nintendo DS systems sold in the UK and over three million connections logged to Wi-Fi Connection worldwide, Nintendo UK is better positioned than ever in the handheld market despite facing more competition than it ever has before. On top of that, this year will see the final unveiling of its next-generation Revolution home console and there are widespread rumours of another iteration of the DS hardware design.

GamesIndustry.biz spoke to UK general manager David Yarnton this week at Nintendo's "Keep Evolving" event at the London Science Museum, which saw it pledge £1 million in sponsorship to the institution as it spoke of its conviction in the "human interface" of the DS and a number of first-quarter titles including hugely popular Japanese export Brain Training and Animal Crossing. In an interview after the presentation, Yarnton spoke of Nintendo's ambition to be number one in all markets, addressed some of the issues relating to Nintendo DS and illustrated how the company would be working to improve relations with the UK trade.

David Yarnton: No, if there's a Cloud site it should be active. Then you had BT. We're actually looking at installing about 500 sites - I wouldn't say ourselves, but with BT - into retail outlets and BT are doing a rapid expansion of some sites as well downtown. It's actually quite interesting, because The Cloud I think are putting some Wi-Fi spots into a lot of British Telecom phone boxes. So there's expansion there. We've just actually added - I think it's come online - Ireland as well, so there's rapid growth there. I'll check on that though, cos I don't know where you got that from!

In actual fact... We haven't released the latest figures, but that one was I think before Christmas. I can just say it's a lot. Those figures, those three million though are actual connections; it could be the same person multiple times, but it's in the realms of over half a million.

It's been so quick and so rapid, the roll out of all of this, because we've only just released Mario Kart, and so we're pulling together some of the breakdown of that and so we can actually break it down by territories, but we don't have those figures yet.

It's not just a factor of safety issue in respect of talking about younger children, it's also about people being able to control a little bit about who they play with. They can play with people that are their own level; we don't want people to log in and find they're playing some guy who plays every day and find that they're uncompetitive, because that really puts people off when you crash or you're beaten really badly. The way we've also done it with the buddy system means people can play with people of different levels there. We have to take certain responsibilities and the safety is an issue, so we need to do that.

I think you've got a natural levelling there with the type of games as well. You've got Metroid Prime coming and being Wi-Fi there'll be older people playing that potentially than playing Animal Crossing - in fact, I could be wrong there because Animal Crossing has such a broad appeal! It's really interesting actually with Animal Crossing in Japan; amongst the first people on the uptake on it were actually new users, so a lot of the people who actually bought Brain Training then bought Animal Crossing, and it was actually the gamers that came in later. And we thought hey, this is really interesting... I mean, look, who knows what the future holds in certain areas? It's almost snowballing - what we can do, what we can't - and we're still learning a lot of things too.

We've shown, what, three today and that's only in the first quarter. We've got third-party as well and potentially some more coming through there.

No I don't, sorry.

I think because of the system we're offering of free Wi-Fi it's actually escalating the number of people doing it.

If we look at all the formats, everything's had its position. Obviously DS is the major emphasis and we've done well there, SP's been doing well, Micro's actually achieved what we were hoping. It's probably a different market that we're aiming for; there's going to be people that want every format, so some of them have bought it, but there's also when we were targeting it was very much a fashion item. It's what we want it to be, a cool sort of item to have, and it's been pretty good. We weren't expecting it to knock off DS or knock off SP or anything like that; it was an opportunity we saw for a product that's done very well.

Well, we had a trade presentation this morning where we did announce, so we're not really hiding them, we're just not publicising them so much.

When we announced DS in January in Paris we had a separate presentation while retailers were there and we said that in the year we would increase our business on handheld by 50 per cent in 2005. Well, we achieved that. We sold 1.6 million handheld in the UK in 2005, so we think it's been achieving it but we're looking at a further increase in 2006 as well.

We've got the hardware there now and I think one of the things we've seen in Japan where the growth has come is the release of the content. I mean, Nintendogs was the first one that came and gave us a spike - okay, seasonality as well, but we still haven't actually caught up on Nintendogs and there's still demand out there we haven't supplied. Next one is Brain Training and we've seen the same thing in Japan and as I mentioned with Brain Training it was 13 weeks after launch that it hit its first big spike and then continued to get higher - and those people are new users as well, so very much the content is the thing now.

If I turned around and said to my staff that we're doing something new they'd probably throttle me, because what with this last 12 months of product that we've done and also what we've got in the first quarter...

That's been rumoured, I don't know for how long, but we haven't got any plans at the moment. Nothing I know of.

I mean, Micro was a surprise for us as well when that came out, so we weren't aware of that.

I think it's like when Apple launched the Nano - what's happening nowadays is very much to keep the element of surprise so when you're developing a product, you want to make sure it's released properly and you've got your production right, so you try and keep things pretty tight, so...

If you look at other companies... We've got so many products to juggle. One of the things is we always want to make sure we do it properly and do it right, and we'll launch when we're ready and when the product's right, and that's all under control as far as we're concerned.

I think E3 will be the big one to wait for when, and I don't think anyone in the UK is going to get a sneak piece of information on something as important as that [laughs].

I'm in charge of Nintendo UK and anything Nintendo Europe you'd probably have to ask there. I think there's a successor in planning.

Ah well, look, we've got to be honest in the UK, especially. GameCube we can't say is, uh... We're number three and we've got product to release there, but I think what a lot of people don't realise is that GameCube in Europe is probably number two when you add up the other territories, and in Japan it's number two and in fact it's been outselling Xbox 360, so on a global basis GameCube is a very strong business for us as such. Unfortunately the UK market hasn't been our best area, but you know that's why we want to make sure [it is] for the future. And I think you'll find that a lot of things we've been doing and the way we've been doing things have been different to what we've done in the past and not just I suppose in communicating with the media but also to some extent in the way we're dealing with trade. We're doing a lot of things with trade differently than we have in the past, and it's all to sort of make sure for the future that we do a better job.

It's funny, because last year in April we won the MCV Grand Prix award. We didn't expect to win it because we were making some changes that we felt were okay and were making changes with the retailers and they believe we are a lot more pro-active with them, we're giving them more support, but we felt we could do more and needed to do more. This year there's going to be a lot of things we do that will have the trade looking forward to Nintendo. There will be an announcement, I think this week, on some of the ways we do distribution of product and how we're looking to improve that, so there's more focus we want to look at in that area and there are some other things we're looking at as far as we do business - we're looking at resources, things like that - so... You know, we've got plans for long-term that we're going to invest in it and in the past, I wouldn't say it's been neglected, but change is happening and so we got a big award last year which surprised us because we wanted it this year. We wanted to improve last year and improve again, but it's very hard to keep doing that! We've got a really great team of people that I think work really hard.

I find one of the challenges we have as a company is resource as far as, you know, we've got 16 people at Nintendo UK which I think a lot of people don't realise for the amount of business we do. But we're looking at improving that resource. We don't think we need to grow too much more, it's just being responsive and working closely - as I say we had a trade presentation this morning and we presented to them a number of initiatives as far as simple things like in-store... I mean, we go out to stores and look and we're the poor relation in some respects, so we can't expect them to do that unless we give the more support so we're working in that area.

No I think that's wrong in context, to the extent that we see it as one aspect of the business. We're not deserting the market that we have or those who've supported us over the years. What we're looking at doing is growing and to grow that we need to look in other areas, because that's a finite number of customers that you can have there and we're not going to, as I say, desert or neglect that.

Our ambition is to be number one, so there's a number of different areas for us to do that. We can take them head on or we can move outside as well. We aim to be number one. We're number one in the handheld and there's no reason we can't be number one in the console area? In a number of markets, as I say, Sony dominates, but we're not far behind.

This generation as in GameCube? [General laughter] I don't think we'll catch up with GameCube.

Who knows. Who knows.

I mean, you can look on Nintendo with popular games like Mario Kart and a lot of our games which are only on one format and they still sell really well, and a lot of people are probably wishing they were on multiformat. And there's room for that on all of them, and I think looking at the support we're getting from third party, I think it'll most definitely be not only multiformat games but also we know they'll develop exclusive games for Nintendo products as well. So a lot of them have seen the success of DS and the support we've got with them and the number of titles coming through is reflecting that. A few people may make some wrong bets early on, but it's almost a floodgate coming back as far as support there. And we've got something like 20 titles that'll be launched just with ourselves on DS between now and April, and then you add third party on top of that so there's no dearth of titles.

One of the things we've said before with DS is that it's the start of us being able to provide consumers with a human interface, more opportunity and that's the progression I think we look at there, offering that much better gameplay experience people can have through the console or through the hand control, whatever it may be, making it simpler and easier while not neglecting the opportunities for complexity as well. But we can make it simple for people.

David Yarnton is general manager of Nintendo UK. Interviewed by Tom Bramwell and Ellie Gibson.