Nintendo Co., Ltd. Who Have Access to Nintendo IP
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Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2017 Thank you for making time to attend Nintendo’s financial briefing. I am Tatsumi Kimishima, Nintendo Co., Ltd. President of Nintendo. Corporate Management Mr. Furukawa, General Manager of the Corporate Policy Briefing Planning Department, has just presented our President and Representative Director Tatsumi Kimishima financial results for this period. Our basic strategy remains unchanged. We seek to Basic Strategy expand the number of people who have access to Nintendo IP. Expand the Number of People Who Have Access to Nintendo IP Today I will be discussing three areas in which Presentation Outline Nintendo is working to pursue that strategy. The 1 Nintendo 3DS Sales three areas I will discuss are Nintendo 3DS sales 2 Smart-Device Business and future business projections, smart-device business, and Nintendo Switch. 3 Nintendo Switch Business First, I will discuss the status of Nintendo 3DS. I will cover the sales for the third quarter, including the holiday season, as well as future business projections. Sales and Future Business Projections 1 Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2017 We released two completely new entries in the Pokémon series, Pokémon Sun and Pokémon Moon, worldwide in November last year, and achieved explosive sales. According to our recent analysis, the global sell-through (volume sold from retailers Global Sell-Through 13 Million Units to consumers) has exceeded 13 million units and Includes bundles and digital sales / Source: Nintendo, Media Create, NPD continues to grow. Comparison of Sell-Through This slide compares the sell-through from release to from Release to the End of the Year the end of that year for past titles in the Pokémon 12.15 (million units) (7 weeks of sales) 9.65 series. You can clearly see that Pokémon Sun and 7.55 (12 weeks of sales) (7 weeks of sales) Pokémon Moon are off to an excellent start, even Off to a good start compared to past titles compared to past titles. Pokémon games tend to be Omega Ruby and Sun and Moon X and Y Alpha Sapphire long-selling titles in the U.S. and European markets. Total sales in Japan/U.S./Europe/Australia, includes digital sales Source: Nintendo, Media Create, NPD We can see that these titles still have excellent sales potential. We hope to maintain this momentum going forward to ensure that Pokémon Sun and Pokémon Moon also achieve long-selling status. Note: The periods represented vary slightly, as Pokémon Omega Ruby and Pokémon Alpha Sapphire released in November 2014 and Pokémon X and Pokémon Y released in October 2013. Note: Pokémon Sun and Pokémon Moon, as well as Pokémon Omega Ruby and Pokémon Alpha Sapphire, released approximately one week later in Europe than in the other markets, so these figures represent the six weeks following release for Europe. 2 Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2017 According to our latest data, we have seen that the ratio of players in their 20s and 30s has risen for Pokémon Sun and Pokémon Moon compared to past • Increasing share of players in their 20s and 30s compared Pokémon titles for Nintendo 3DS. to past titles In addition, as of the end of December 2016, we • About 17% of Pokémon Sun and Pokémon Moon players were trying a Pokémon title on Nintendo 3DS for the first found that about 17% of Pokémon Sun and time Data collected from members with Nintendo Network IDs who connected to the Internet through a Pokémon title and agreed to send their Activity Log Source: Nintendo Pokémon Moon players had no previous Nintendo 3DS Pokémon titles in their activity log; in other words, Pokémon Sun and Pokémon Moon were the first Pokémon titles these players had experienced on Nintendo 3DS. Celebrations of the Pokémon series’ 20th anniversary that began at the start of 2016, plus the incredible buzz around the smart-device application Pokémon GO in July drew attention to the brand and set the stage for this growth in sales. We believe these activities correlated with the increase in the ratio of players in their 20s and 30s and the acquisition and reactivation of new consumers. Note: Pokémon GO is an application for smart devices (Development and Publishing: Niantic, Inc., Development Oversight: The Pokémon Company) Nintendo 3DS Sell-Through This graph shows Nintendo 3DS hardware and YOY Comparison for Japan First-Party software sell-through in Japan from April 2016 (1,000 units) Hardware (1,000 units) Software 1,200 6,000 FY16 FY17 1,000 FY17 5,000 through the final week of the calendar year, divided 800 4,000 600 3,000 by quarters and compared year-on-year. In looking 400 2,000 FY16 200 1,000 back on the life-to-date performance of Nintendo 0 0 Q1 Q2 Q3 Q1 Q2 Q3 3DS, hardware spread through the Japanese market Does not include titles from other software publishers, does include digital sales Source: Nintendo, Media Create first before the U.S. and European markets. For the first two quarters, both hardware and software maintained lower trends than the previous year, but for the third quarter, which also includes the holiday period, the release of Pokémon Sun and Pokémon Moon drove software sales higher than the previous year, and hardware sales did not lose momentum. 3 Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2017 Note: Nintendo 3DS hardware includes the New Nintendo 3DS, the New Nintendo 3DS XL, the Nintendo 3DS, the Nintendo 3DS XL and the Nintendo 2DS systems. Note: Due to the calendar differences, FY16Q3 contains one more week than FY17Q3. Note: FY = Fiscal year (April through March of the following year) Super Mario Maker for Nintendo 3DS, released in Sell-Through in Japan December last year in Japan, continues to sell well Soon to Reach and is expected to become a million seller soon. In 1 Million Units Japan, this title has the momentum to close in on Momentum driving sales to approach the total sell-through of the total sell-through for Wii U version, which Super Mario Maker for Wii U, released in September 2015 launched the previous year. We were able to reach Includes digital sales / Source: Nintendo, Media Create, NPD consumers who own a Nintendo 3DS system, but who do not own a Wii U system. This shows the size of the latent Nintendo 3DS market. This title is also off to a good start in the U.S. and Europe, where it was released in December as well. Nintendo 3DS Sell-Through This graph shows Nintendo 3DS hardware and YOY Comparison for the U.S. First-Party software sell-through in the U.S. compared with the (1,000 units) Hardware (1,000 units) Software 1,400 FY17 8,000 FY17 7,000 1,200 FY16 previous period. In the U.S., promotional activities 6,000 1,000 5,000 800 4,000 aimed at children and parents were effective at FY16 600 3,000 400 2,000 increasing sales. We believe we were able to assert 200 1,000 0 0 Q1 Q2 Q3 Q1 Q2 Q3 brand presence during the holiday season, including Does not include titles from other software publishers, does include digital sales Source: Nintendo Black Friday, through Pokémon Sun and Pokémon Moon. This was the sixth year-end period since the launch of Nintendo 3DS, but major titles continued to drive hardware sales, and sell-through of hardware and software for the entire year was up compared to the previous year. 4 Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2017 Nintendo 3DS Sell-Through This graph shows Nintendo 3DS hardware and YOY Comparison for Europe First-Party software sell-through in Europe compared with the (1,000 units) Hardware (1,000 units) Software 1,400 8,000 FY17 FY17 1,200 7,000 previous period. In Europe, sales were up for both FY16 1,000 6,000 5,000 800 4,000 FY16 hardware and software in each quarter compared to 600 3,000 400 2,000 the previous year. As in the other markets, Pokémon 200 1,000 0 0 Q1 Q2 Q3 Q1 Q2 Q3 Sun and Pokémon Moon was a major driver of Does not include titles from other software publishers, does include digital sales Source: Nintendo hardware and software sales. We also promoted titles for children and female consumers, creating a new group of Nintendo 3DS owners whose purchases of both new and evergreen titles further drove sales growth. We have previously shared how the first title in the Europe: Yo-Kai Watch (1,000 units) Yo-Kai Watch series, sold by our local subsidiary in 1,000 Sales Growth over Japan the Holiday Period 800 Europe the European market, was released in April last year 600 and quickly surpassed initial sales of the Japanese 400 release. This graph compares the sell-through in the 200 0 European market with the earlier release in the Includes bundles and digital sales W1 W3 W5 W7 W9 W13 W15 W17 W19 W21 W23 W25 W27 W29 W31 W33 W35 W37 W39 W41 W43 W11 Source: Nintendo, Media Create Japanese market. Sales growth has maintained momentum even through the holiday period in Europe. High demand from children hoping to receive this title as a present has produced measurable results. The animated television show is also expanding to more regions, so we can expect further growth from this franchise in the future.