Nintendo Investor: 'I Do Not Understand Video Games'

Nintendo Investor: 'I Do Not Understand Video Games'

Here's an excerpt from Nintendo's annual investors Q&A, which was posted online in English this morning.

I do not understand video games and I even feel angry because, at Nintendo's shareholders' meetings, the shareholders always discuss things relating to video games or such childish topics as "what the future of video games should be," while I, for one, was flabbergasted that Mr. Iwata continues to hold his position although he had said that he would resign if the company's performance were bad*.

I hope that Nintendo's shareholders' meeting will become an opportunity where the shareholders discuss the company's business operations from the viewpoints of capital gain and dividends.

Oh man. These are the people who own shares in one of the most beloved video game companies in the world. This guy might not have any direct impact on Nintendo's decisions and products, but his question sure is hilarious -- much better than the constant deluge of shareholders asking the company to make smartphone games.http://kotaku.com/crazy-nintendo...

The responses, from Nintendo execs Genyo Takeda and Tatsumi Kimishima, are just as great. You can feel the tension.

Takeda: I appreciate your tough comment. We, the directors of this company, believe that we should take responsibility by recovering our business's momentum. I would like to ask Mr. Kimishima to comment on this valuable opinion from one of the Nintendo shareholders.

Kimishima: The Annual General Meeting of Shareholders is an important opportunity for communication between Nintendo shareholders and the company's management team. It is a place where we respond to the views expressed by shareholders, in order to discuss how we should develop the company from now on. From that perspective, talking about the company's business operations is very important and, at the same time, as an entertainment company, it is also very important for us to inform our shareholders about the kinds of entertainment Nintendo offers, including video game content. Therefore, as the shareholder has just commented, we are and will continue trying to thoroughly discuss our business operations, and we will continue to respond to questions from other shareholders regarding the kinds of entertainment we are challenging ourselves to offer. We will try to further enhance the Annual General Meeting of Shareholders from now on. We appreciate your continued support of the company.

Takeda: Once again, we appreciate these valuable comments from the shareholder.

Don't you just hate it when Nintendo talks about video games? Check out the whole Q&A here. There's no major news, though Shigeru Miyamoto does mention some unannounced "ideas" for 3DS Zelda games...

WATCH MORE: Nintendo News


Comments

    To be fair, most people who talk about them on the internet don't understand them either.

      So true, especially those Facebook, IGN and Gamespot comments. They keep talking about them and know nothing about it.

      Last edited 04/07/14 10:43 am

    They are too polite. Maybe they should just tell this guy he should sell his shares if he has no idea what he is investing in.

      Of course they can't do that. Shareholders are everything in corporates. Every single bit counts and they always have to be on the good side of the shareholders which is a major pain in the arse because most shareholders are only interested in their investment gain only. Well I guess every shareholder will not want to lose any money so... it is a shit place to be in.

      They kinda did, they just did it in an outrageously subtle way that makes me proud :P
      Therefore, as the shareholder has just commented, we are and will continue trying to thoroughly discuss our business operations, and we will continue to respond to questions from other shareholders regarding the kinds of entertainment we are challenging ourselves to offer
      Basically they said "Yes, we are doing exactly what you asked us to do when you suggested we talk about our future plans for the business from a capital gain perspective rather than talking about video games all the time... by talking about video games all the time because that's what we at Nintendo do to affect our capital gain and future of the business"

        This is basically Japanese corporate talk all in a nutshell.

        You've never seen passive aggression until you've seen people in a Japanese office meeting being EXCRUCIATINGLY POLITE to someone they think is a fucking idiot.

    Why would Nintendo spend their time talking about video games of all things? Surely they have better things to do, the imbeciles. I mean, just because you run a game company doesn't mean you can talk about video games at a serious discussion! Ridiculous!

      Thats's just plain wrong. A serious discussion at a game making company must be a gaming topic. You can't seriously ask them to discuss about "serious" matters such as real estate or investing into something else rather than gaming right?

    Seriously dude, they aren't asking each other what they are playing this weekend!

    Port Nintendo games to other platforms = Profit = Happy Shareholder & gamers.

      Unless, that is, Nintendo stands to make more profit from keeping their games on their own consoles. Not being an accountant for Nintendo, I can't do the analysis myself, but one does have to compare:
      + the potentially higher sales Nintendo may enjoy on other platforms
      ... to ...
      - the lost sales on their own platforms
      - the lost sales of their own platforms
      - extra development costs
      - extra marketing costs
      - extra infrastructure costs for multiple- or cross-platform internet services
      - licensing fees (?)
      - loss of ability to make games tailored to the unique abilities of their consoles
      - brand dilution
      - etc.

      Last edited 04/07/14 9:53 am

        Yea I was just spit balling really I know they never would go that route I was just being selfish and wanting some Zelda action on my Xbox but yea if I really want to play Nintendo games I will have to buy a Wii

      Yea, worked out real well for Sega fans. Do Sega fans still exist now that the best way to gain access to Sonic is temple run?

        Or ironically/tragically, on a Nintendo console?

        I'd say yes Sega fans still exist, but they are fans of the past Eras not the Modern ones.

        @shodannet as a Mega Drive/Saturn/Dreamcast owner I never hated Nintendo or even Sony, but as a kid there was no way my parents where buying me two of these things. As an Adult I can indulge. I would have loved a SNES to go next to my Mega Drive.

          While Nintendo is currently going through a renaissance. I'm currently smashing through New Super Mario Bros U. Haven't had this kind of fun since the SNES, they've done an awesome job of bringing old school gaming charm into the modern era.

            Not sure why I saw it as Super Smash Bros U lol.

              Don't worry so did I. :D I guess I know what's on our minds.

              http://fanboys-online.com/index.php?id=536

              Last edited 04/07/14 3:09 pm

    Due to my job I’ve been to dozens of AGMs. The focus is on an election for the board of directors, presentation of accounts and fiscal projections. A company might discuss general direction but very very rarely will they talk about specific product. Whilst different companies run AGMs differently, his question is completely understandable.

      except that in this case "fiscal projections" are directly tied to the "what the future of video games should be like" no matter the justification, it's a stupid question from an ignorant shareholder.
      It's like going to a Toyota AGM and expecting to not hear bout cars

        Read his comment again. He's complaining about other shareholders wanting to talk about "the future of video games". I very much doubt they are having this sort of discussion within a fiscal framework.

        While the investor quoted was obviously ignorant and unwilling to be anything but, the others referenced as asking why Nintendo isn't getting into the lucrative mobile market? They have a point.

        On the one hand: "Because that's not what the company does, not where our strengths lie or how we're configured to operate, and that's not what you invested in," is fair.

        On the other hand, "The shareholders own the company, and if the majority want, they choose what the company does, and we want the company we own to start operating in that space," is also fair.

        Not a nice place to be in if you're the one who has to mediate between those two positions, which is probably why Kimishima spent a couple hundreds words to say absolutely nothing: To be seen at least pretending to say something.

        'Video games' are a tough thing to invest in, because they're so unpredictable and chaotic because as much as business/finance types hate it, they are still art, not a commodity.

        Recipes for success don't exist, no matter how much successful formulae are copied and mimicked, and even doing 'everything right' for critical success may not result in commercial success, which is all an investor cares about. They're a terrible investment for anyone who's after a sure or reliable thing, but investors cannot keep themselves away because of the lure of the literally billions and billions of dollars which are being made.

        It's fair for them to be asking, "Well there are billions being made, why isn't the one I backed getting a slice of that pie, and how do I vote to make it get a share of that?" And pushing for mobile 'gaming' which is low-cost, high-return, while not 'gaming' is practically indistinguishable from the investor's point of view.

        It's why all these ignorant CEOs keep claiming that mobile and tablet are 'the future of gaming'. It's because they want it to be the future of gaming because it's the lowest risk/highest return part of the business they can be in, and there's enough skill overlap in development that they can steal REAL game development resources to use in the mobile space, then pare down all those ugly unnecessary costs like developers and studios. (Which is why: Dungeon Keeper.)

          I'd say that people who invest in Nintendo fall in two very different classes. One are fans of Nintendo who just want to be part of the magic. The other class are the serious investors who actually want to make real money and are very likely investors in plenty of other companies as well. This guy's comment is a product of this constant friction.

          It would be remarkably difficult to keep everyone happy in this scenario.

      There's 2 possibilities I can think of here.

      1. The guy is clueless and has no idea how games (childish things as he refers to them) are going to make money. He is investing into something he has no clue of.

      Or.

      2. They talked about a specific game, or specific products that Nintendo may see as an opertunity to make money, and this guy was not familiar with. I don't think they would ever go into details of mechanics and such. They never do.

      Overall, even he himself said that he has no clue about games. Then calls something he has no idea about childish. While investing money ( as many of us see value in ) into this thing he does not understand and calls childish. Which we would call ignorance.

      I really, highly doubt they talked about a specific product for more than minute.

        He called the topic “what the future of video games should be" as childish.
        He's basically saying that an AGM isn't the place for kotaku articles.

          Missed the future part completely. Nevermind.
          True. Also it would be difficult to determine the future of video games. High risk as they are.

          Yeah, not enough info is given and people judge and jump to conclusions too easily.

          That's not "childish" at all in this context. The "future of video games" concerns the future productivity and profitably of the company.

            Predicting productivity and profitability does not require airy-fairy discussions around the future of games. You’ll get no meaningful figures around trying to predict whether social gaming will keep dominating or if the handheld market continues to grow in the next 10 years. They would be mainly concerned with current projected sales of consoles and games between now and the next financial year – something that accountants would be doing.
            I don’t see the topic itself as childish, but I would agree that fanboys using the AGM as an excuse/platform to engage Nintendo execs with this sort of thing is.

              Predicted sales in games and the market performance of the company are very much tied to that sort of thing though. Projected sales figures in the gaming industry are exactly as airy fairy as any other topic they'd be likely to discuss- it's not like a mining company or something where they produce something with a standard, easily quantifiable, regular demand. The games industry is highly dependant on social factors and expectation for the next big thing, like the movie or music industry.
              It is part of the entertainment business after all.

                No, because you can’t predict major swings in the market place like that. You calculate your fiscal predictions based on extrapolating on historical data, consumer confidence testers, exchange rates, bond rates and placing that against operation expenses. If you do extremely well or poorly compared to your forecast (due to whatever reason), you release an updated forecast based on the new data and explain what went wrong. You can’t just start spouting off about how everyone is buying iOS games and how this means 3DS sales are going to fall by 14.5%. Leave that to the dozens of gaming blogs/armchair economists.
                This is about as airy-fairy as a company would reasonably be in discussing forecasting:

                Kimishima:

                This fiscal year, in order to change the situation in which we have incurred operating losses for three consecutive years and to build a profit structure, we would like to aim for increases in both sales and profit by restoring the balance of revenue and expenses as our top priority. To be more specific, we would like to achieve the sales of 590 billion yen compared to 571.7 billion yen in the last fiscal year and the operating profit of 40 billion yen compared to an operating loss of 46.4 billion yen in the last fiscal year. Since over 43 million units of Nintendo 3DS hardware were sold globally, we would like to release many software titles this year as well to inspire consumers to buy many of them. We made a big forecast for Wii U hardware sales at the beginning of the last fiscal year, but the actual sales units were only 2.72 million. As Mr. Miyamoto explained, we will work to communicate the value of the Wii U GamePad in order to vitalize the Wii U platform, and propose a new play style for Wii U. Also, since we have such titles this year as “Mario Kart 8” and “Super Smash Bros. for Wii U,” which are indeed reassuring titles for us, we would like to boost sales of Wii U mainly with these titles.
                This year’s sales forecast is 590 billion yen, in comparison with 571.7 billion yen in the last fiscal year, so we are not expecting much increase in sales year on year. But, we are forecasting an increased operating profit. Since restoring the balance of revenue and expenses is our top priority for this fiscal year, we will further improve our cost management and aim to return to a profit structure soon. We are now diligently working to achieve this goal.

                Last edited 04/07/14 4:31 pm

                  That's the sort of thing I was talking about though.
                  I wasn't thinking in terms of "this new game will be cool and we want to see it on android and iOS, operating at 60fps..."

                  Whereas the grumpy guy who didn't "understand" games seems only to be interested in a purely abstract financial picture.

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