For months now, the video game industry has been buzzing with rumors of new Switch hardware. These numerous, often contradictory reports tend to agree that a cheaper “Switch Lite” model is on the way, and some believe a “Switch Pro” could also be on the horizon. With E3 less than two months away (and Bloomberg claiming a new Switch will launch that same month) many anticipate a reveal, but they may be disappointed.
Following the publication of Nintendo’s 2019 earnings release, President and CEO Shuntaro Furukawa issued some additional information. On the topic of new Switch hardware, he reaffirmed Nintendo’s tradition of always working on new hardware ideas internally but said he had nothing to announce. Additionally, he stated that Nintendo has no plans to make such an announcement at this year’s E3.
Does this mean the alleged Switch Lite isn’t coming after all, or is Nintendo simply waiting for a more optimal time to unveil it? There doesn’t seem to be any consensus on the new model’s launch window (Summer, Fall, and vague “2019” dates have all been proposed), but it’s possible that Nintendo’s just not ready to show it off yet.
Nintendo Switch has enjoyed strong sales through two years on the market, including record-breaking attach rates for Switch software. Unfortunately, that still wasn’t quite enough to appease investors after Switch sold below Nintendo’s expectations, causing them to revise their forecast downward from 20 million to 17 million.
Was this simply a case of Nintendo overestimating their sales potential and being too bold? Apparently, Shuntaro Furukawa doesn’t think so. Speaking with shareholders, Nintendo’s president expressed that the company has not yet succeeded in fully conveying the value of Nintendo Switch and its games to customers.
“As we look back so far (for this fiscal year), we now evaluate that our efforts to fully convey the appeal of Nintendo Switch hardware and software to the number of new consumer we originally hoped to reach were insufficient.” — Shuntaro Furukawa
Furukawa also noted that Nintendo’s sales were lower than anticipated from April through October, a period that saw few major releases from Nintendo. In other words, Nintendo thinks there weren’t enough games and they didn’t do a good enough job promoting them. Going forward, Nintendo aims to “further enrich our software lineup and convey its appeal to consumers, so that they decide this (calendar) year they would buy a Nintendo Switch.”
Later on in the Q&A session, Senior Executive Officer Satoru Shibata (formerly Nintendo of Europe’s President) chimed in and gave some specific examples of ways in which Nintendo believes they’ve fallen short at communicating value and reaching consumers. He pointed to the holiday lineup of Super Mario Party, Pokémon: Let’s Go and Super Smash Bros. Ultimate as areas where, despite incredibly strong sales, Nintendo believes they haven’t yet finished their marketing mission.
“We feel very fortunate that the initial sales pace for Super Mario Party, Pokémon: Let’s Go, Pikachu!/Pokémon: Let’s Go, Eevee!, and Super Smash Bros. Ultimate has been so strong. However, that doesn’t exactly mean we’re satisfied. Before their release, we challenged ourselves to see how we could expand our consumer base with each of these titles.
“For Super Mario Party, the question was “How could we reach pepple other than children and parents?” With Pokémon: Let’s Go, Pikachu!/Pokémon: Let’s Go, Eevee!, we asked “How could we reach people who have played Pokémon GO, for example, but never played Nintendo Switch? With Super Smash Bros. Ultimate, we asked “How could we reach not only fans of the Super Smash Bros. series, but also those who had never played it before?” If you look at the demographics of the consumers who purchased each of these titles, I’m not convinced we’ve completely overcome these challenges yet.
“So our aims are to keep working on them this year, to expand sales of these titles to new consumer demographics, and to keep selling these games for a long time, which is one of our strengths.” — Satoru Shibata
Those three titles in questioned shipped out over 27 million combined copies during the holiday season, accounting for almost half of all Nintendo Switch software sales during that period. Even so, it appears Nintendo believes they are far from tapped out. Key Switch titles have enjoyed evergreen sales long after launch, and Nintendo is aiming for this with 2018’s holiday lineup. Nintendo has also been releasing commercials focused on Switch’s multiple play styles recently to convey the value of the hardware better.
Following a lengthy delay, Nintendo finally launched their online subscription service last September. The Nintendo Switch Online service has been met with mixed reviews from fans as many expected more content by this point in its life. Nintendo’s planning to bring more features to the service in the future, but in the meantime, it’s still doing a surprisingly good job of attracting paying members.
Nintendo President Shuntaro Furukawa just met with shareholders and gave a presentation on the company’s performance over the past nine months. During the presentation, he announced that Nintendo Switch Online now has over 8 million paying subscribers, which does not include free trial members. Given that Switch has sold over 32 million units, we know that around 25% of Switch owners are paying for the online service.
Nintendo Switch has been a hugely successful console, especially when compared to last generation’s Wii U. The current hybrid console outsold Wii U’s lifetime numbers in its first year, and it’s still going strong. Some in the industry thought a price cut might be in order when sales slumped through much of 2018, but a record-smashing holiday season more than made up for that.
As Switch approaches its second anniversary, is Nintendo feeling any pressure to lower the price at all? The $300 price tag is more than Nintendo typically charges, especially after a console has been on the market for over two years. However, Switch’s strong sales mean Nintendo doesn’t have to rush to make it more affordable. In a recent interview with Sankei, Nintendo President Shuntaro Furukawa tackled the topic.
Sankei: Could you tell us how your goal is going for the Switch to sell 20 million units within the [fiscal] year?
Furukawa: It is an extremely ambitious, but worthwhile achievement. So, we will maintain this goal. Nintendo Switch is our primary sales objective, and we are not considering a successor or a price cut at this time.
Oddly enough, Furukawa wasn’t even asked about a price cut, but he volunteered the info anyway. While a price cut might help Nintendo make their sales target of 20 million units sold for the year, it could also potentially undercut profits. For now, Nintendo is content to keep the price as is.
Nintendo has seen quite a bit of management overhaul in recent years. The tragic death of former President Satoru Iwata led to the appointment of Tatsumi Kimishima as President, but this was always intended as a stop-gap solution. Kimishima stepped down last year and was replaced by the much younger Shuntaro Furukawa, who is the current President of the gaming giant.
Iwata spent much of his career as a game developer rather than an executive, but time and time again he impressed his superiors and reluctantly accepted promotions to positions of power, eventually landing him Nintendo’s top job. Kimishima’s background was quite different, as he spent much of his early career as a banking executive before being scooped by up Nintendo to work first for The Pokémon Company and later for Nintendo proper. As such, Iwata was more involved and in touch with Nintendo’s development teams than the businessman Kimishima.
So what about newcomer Shuntaro Furukawa? He has spent nearly his entire adult life working for Nintendo, first as an accountant and later as an executive. However, he’s also a big fan of video games and grew up playing the Famicom. Speaking with Nikkei, Furukawa recently addressed his management style when it comes to development teams.
You’ve put out a lot of consoles and software, but there’s always a really big risk that comes with it.
Furukawa: We’re in the entertainment industry; there isn’t much we can do about that risk. To us, the guiding principle by which we operate is offering customers all around the world innovative and unique ways to play games.
I don’t want our developers to think too much along the lines of “what should I do if we fail?” My most important role is to facilitate an environment in which they can demonstrate their own abilities. I’m not a pro developer myself, so I leave the actual development to leaders that can tell what a good game is and what isn’t.
You’re completely hands-off?
Furukawa: Well, leaving everything up to the others would be irresponsible. I spare a lot of time to make sure the people I leave in charge and I have a mutual understanding. With regard to decisions on how we should improve our technology and the direction in which Nintendo should proceed, I base my final decisions on the development leaders’ way of thinking.
I don’t think it’s a good idea to give complete freedom. I want there to be more of a balance between freedom and discipline.
As the company’s leader, Furukawa keeps in touch with lead developers to make sure everyone’s on the same page at all times. However, he recognizes that professional developers need his trust and room to operate, and he largely sees his role as empowering them to make the best games they can make, so long as they fit Nintendo’s vision.
Nintendo is known by most as a giant in the video game console and handheld space. That’s been the case for more than 30 years, but the company’s history stretches back well over 100 years, and they’ve evolved many times. Even recently, they’ve been aiming to re-brand themselves as an “entertainment company” with video games as one of their core pillars.
The video game focus has shifted from arcades and playable watches to home consoles and handhelds, and going forward, it could shift again. Speaking with Nikkei, Nintendo President Shuntaro Furukawa speculated about how the company could evolve in the long term. These are his comments, according to a translation by Nintendo Everything.
Nikkei: Have you ever run into an “innovation dilemma” – where the company’s past successes were too big, making innovation impossible?
Furukawa: We aren’t really fixated on our consoles. At the moment we’re offering the uniquely developed Nintendo Switch and its software – and that’s what we’re basing how we deliver the “Nintendo experience” on. That being said, technology changes. We’ll continue to think flexibly about how to deliver that experience as time goes on.
It has been over 30 years since we started developing consoles. Nintendo’s history goes back even farther than that, and through all the struggles that they faced the only thing that they thought about was what to make next. In the long-term, perhaps our focus as a business could shift away from home consoles – flexibility is just as important as ingenuity.
Many Nintendo fans will likely find this language alarming, but it’s important to remember that Furukawa is speaking speculatively about the possible ways the company could evolve in the long term. There’s no telling how far ahead Furukawa is looking, but it’s clear that in the present they are dedicated to the highly successful Nintendo Switch brand. And after all, Switch itself is an evolution of hardware design that goes beyond what you’d get out of a traditional home console.
Back in September, Nintendo debuted their new subscription-based online service, Nintendo Switch Online. Customers could previously play online games for free on Switch, but that feature now costs around $20 per year. In exchange, Nintendo offers features like cloud saves and an expanding digital library of NES games.
This service has been met with mixed reviews by critics and fans, and Nintendo is aware that it needs improving. Speaking with shareholders at the most recently quarterly event, Nintendo President Shuntaro Furukawa fielded questions about Nintendo Switch Online. Importantly, he acknowledged that Nintendo needs to “enhance the content of the service.”
Question: You explained during the presentation that over half of all people who purchased subscriptions to the Nintendo Switch Online service opted for a 12-month Family or Individual Membership. Could you give us more details about things like the number of subscribers at launch, or region and age range information about these subscribers?
Furukawa: We think Nintendo Switch Online had a good launch, but the service has only just begin, so we have no plans to disclose any current subscriber ratios or number of subscribers at this time. Our objective for launching the service is to bring “More Games. More Features. More Fun.” to Nintendo Switch. Our focus at this point is boosting the appeal of the service. We need to further enhance the content of the service for the subscriber base to reach a certain size, so that is what we’re working on, with the understanding that the time it will take to do so will be measured in years.
As for the kind of service this will develop into in the future, Nintendo Switch Online is essentially a digital service, but we are also offering controllers specifically for use with the Nintendo Entertainment System – Nintendo Switch Online exclusively to subscribers of the service. We see the need to develop the service beyond being merely digital, in ways play to our strengths as a company that operates as an integrated hardware and software business.
Currently Nintendo Switch Online’s digital library is limited to NES games, which means it’s missing an enormous wealth of fan-favorite titles on Super Nintendo, Nintendo 64, Game Boy (including Color and Advance), and more. Expanding that digital library is one way Nintendo Switch Online could improve. Furukawa also indicated that he wants to find non-digital ways to expand the service, but it’s not clear what he has in mind.
Although he notes that “the time it will take to do so will be measured in years,” Nintendo will hopefully begin enhancing the service much more rapidly than that. It will simply take them a long time to gain the respect and online community on Switch that other services, like PlayStation Plus and Xbox Live, have earned over many years.
Over the past few generations, Nintendo has frequently chosen to design hardware that offers unique experiences instead of focusing on power. This strategy has had its highs (Wii) and lows (Wii U), but one undeniable side effect is that Nintendo has missed out on many major third-party titles due to hardware constraints.
Switch, although still not as powerful as the competition, has managed to attract more support. Companies like Bethesda, Epic, and Square Enix have brought their games to Switch, but it still lacks many key titles. Nintendo President Shuntaro Furukawa addressed this fact in a recent Q&A session with investors. Although he acknowledged that Switch won’t receive every major title, he’s optimistic that its library will be rapidly expanding with key titles.
Question: A lot of people seem to feel like there are major titles from other publishers that are missing on Nintendo Switch. Are you currently doing anything to address that? Also, do you think the situation will change in the next fiscal year or later?
Furukawa: We believe that giving consumers a wide selection of software is an extremely important part of operating our platforms. That is why we welcome the introduction of a variety of titles from many different software publishers. Even so, I do not think it is realistic to expect that every major title will become available on Nintendo Switch. We are speaking with publishers about them actively putting titles on Nintendo Switch that would be an especially good fit for its unique features as a home console system you can carry around, including handheld mode and the ability to bring systems together for local multiplayer. Given the strong publisher support Nintendo Switch has, I would expect the number of titles on it will increase a lot more. That is what really keeps the Nintendo Switch business on the right track.
Switch packs enough of a punch (in terms of both power and sales) that Nintendo has been able to secure more quality third-party games than they could last generation, but it comes short of newer, impressive games like Red Dead Redemption 2. That said, Nintendo can also team up with third-parties to create exclusive games or exclusive content suited for Switch, such as Mario + Rabbids: Kingdom Battle and Starlink: Battle for Atlas from Ubisoft.
Heading into the current fiscal year (which began on April 1st) Nintendo set a bold target: 20 million Switch consoles sold in a year. To put that in perspective, Switch launched in March of 2017 and reached 17.79 million sales around 13 months later. Nintendo’s latest financial report shows the console is now sitting at 22.86 million units sold, which means they moved around 5 million Switch consoles over the past six months.
That puts Nintendo at only 25% of its goal for the year with 50% of the year gone. Understandably, industry analysts are skeptical that they can make up the difference before the books close on March 31st, 2019, but Nintendo is not backing down from the lofty 20 million target. Speaking with the press, President and CEO Shuntaro Furukawa recommitted Nintendo to the 20 million goal and pointed to the lucrative holiday season as critical in achieving it.
“The Switch’s momentum has been in line with our expectations. While the 20 million goal is not an easy target to achieve, the year-end holiday season is when we get the largest revenue.” — Shuntaro Furukawa
It’s common for video game companies to generate around 50% of their sales during the roughly six-week window from Black Friday to New Year’s, but Nintendo will need an even stronger holiday performance than usual if they hope to meet their goal. That said, Nintendo’s 2018 lineup is undeniably weighted towards the end of the fiscal year.
Nintendo’s 5 million Switch units sold this fiscal year accounts for all sales between April 1st and September 30th. Since then, they’ve released Super Mario Party to strong initial sales, and they’ll soon be following it up with Pokémon: Let’s Go and Super Smash Bros. Ultimate in November and December, respectively. January sees the release of New Super Mario Bros. U Deluxe, which should also provide a sales boost. Additionally, we’ve heard reports that Animal Crossing could launch by March as well, although that’s not yet confirmed. If it does indeed make it to store shelves before the end of the fiscal year it will provide a substantial sales boost, especially in Japan.
Is Nintendo too bold in their prediction, or can these heavy hitters really move 15 million Switch consoles over the next six months? It should be an interesting holiday season for Nintendo.
Nintendo has a fresh, new face leading the company. Veteran Nintendo staffer Tatsumi Kimishima guided the company through the transition from Wii U to Switch after former President Satoru Iwata’s tragic death, but being promoted to the role at 65 meant he was always intended as a stop-gap President. Now it’s 46-year-old Shuntaro Furukawa at the helm, and he’s eyeing a more future-focused Nintendo.
One area where Nintendo has undoubtedly lagged behind the rest of the industry is in online play. Nintendo is the king of couch co-op and competition, but their online support has left much to be desired in the past. Now that they’re charging users a fee to access Nintendo Switch Online, it’s imperative that they provide a robust experience for their users. Furukawa realizes this, and he sees it as an area where Nintendo needs to improve going forward.
“We need continuous growth. We must keep releasing new software. That includes DLCs and other contents for big titles that are already out. And more focus on online play. Lastly, more genres and diverse games to draw in people who don’t currently play on Switch.” — Shuntaro Furukawa
For those concerned about excessive, expensive DLC, it’s important to remember that Nintendo has also offered over a year’s worth of free DLC for games like Splatoon and ARMS. A steady stream of free goodies is a great way to keep people invested in your online community.
That said, Nintendo is a business, so we’ll certainly be seeing paid content as well. Nintendo could increase the amount of DLC they create for new games going forward or even return to games like Mario Kart 8 Deluxe and The Legend of Zelda: Breath of the Wild for additional content packs.
Former Nintendo President Satoru Iwata tragically passed away in 2015, leaving a massive hole in Nintendo’s hierarchy. Longtime Nintendo executive Tatsumi Kimishima stepped in to fill the role, and did a fantastic job overall, but his tenure was always meant as a stop gap. Kimishima announced back in April that he would soon be stepping down and turning the Presidency over to someone else, and that day has finally come.
During the 78th Annual General Meeting of Shareholders, Tatsumi Kimishima officially turned the top job at Nintendo over to the much younger Shuntaro Furukawa. Furukawa has been with the company since 1994, and he was previously both a Managing Executive Officer and Supervisor of Corporate Analysis & Administration Division at Nintendo.
In his first official message to shareholders as President, Furukawa promised to continue to expand the Nintendo brand through the dedicated gaming device business and the mobile business, as well as non-gaming ventures like theme parks and video content. He also promised that the company will continue to adapt and evolve to the changing times while sticking to their core philosophies.
To Shareholders and Investors:
Since the launch of Family Computer System (called Nintendo Entertainment System outside Japan) in 1983, Nintendo has been offering the world unique and original entertainment products under the development concept of hardware and software integration. In the field of home entertainment, the video game industry is one of the few industries established in Japan that spread around the world, and Nintendo has established itself as a well-known brand truly representing video game culture throughout the world.
We want to continue being a company that creates entertainment to bring smiles to people’s faces. We also want to expand the number of people who have access to Nintendo IP; in other words, we want more people to have access to the characters and worlds from games created by Nintendo, and thereby raise the corporate value of our business.
Based on this fundamental strategy, we will continue striving to offer products and services that anyone can enjoy, regardless of age, gender, or gaming experience by keeping our dedicated video game platform business with its integrated hardware and software at the core of our operations, as we have always done.
Within our dedicated video game platform business, we will continue our efforts to introduce an even wider range of consumers to the unique appeal of Nintendo Switch, which can be played anytime, anywhere, with anyone. We will likewise work to continue providing software that can be enjoyed by a variety of consumers. In addition, we will work toward strengthening our digital business and building longer-term relationships with consumers through services such as Nintendo Switch Online.
We continue to expand the number of people who have access to Nintendo IP in the world beyond game platforms developed by Nintendo. One method for achieving this is by expanding our game business to smart devices, which have built an extensive installed base worldwide. The experience of playing games on smart devices is different from that of playing games on the dedicated video game platforms that we develop with integrated hardware and software, which has yielded new opportunities to develop and operate games that more people around the world can enjoy on their smart devices.
We are also bringing Nintendo characters to several different sectors, including theme parks, video content and character-based merchandise, to increase the opportunities for consumers to encounter Nintendo IP in their everyday lives. With support from our external partners, we are actively working on these aspects of the business, which differ from the dedicated video game platform business that has been a part of Nintendo for so many years. We intend to expand the number of people who have access to Nintendo IP by raising awareness across an even broader consumer demographic through these opportunities to make contact with consumers outside of games.
Nintendo will continue to flexibly transform itself by adapting to changing times while constantly valuing the spirit of originality based on the belief that “the true value of entertainment lies in its uniqueness” – and we will continue to provide products and services that surprise and delight consumers.
We ask you, our shareholders and investors, for your continued support and encouragement.
We also previously reported that Nintendo of Europe President Satoru Shibata would be stepping down from his current role and taking on a new position as Outside Director of The Pokémon Company and Director of Nintendo. Stephan Bole has since been announced as his replacement and will take over the role immediately.
Bole has previously served as the managing director of Nintendo of France, the senior managing director of corporate strategy, and senior managing director of European subsidiaries and affiliates. Bole will be joined by Koji Miyake, who will serve as Nintendo of Europe’s CEO. He was previously the general manager of the human resources department at Nintendo’s Japanese headquarters.
On September 16th, 2015, Tatsumi Kimishima was faced with an impossible task: filling the shoes of Satoru Iwata. Nintendo’s former President was a gaming icon and a beloved figure, and his sudden passing was a tragedy that shook the industry. In taking the torch from Iwata, Kimishima inherited a company that was not only brokenhearted, but also struggling financially. Kimishima was not Iwata’s first choice for the job, but he stepped up to the plate when no one else was prepared to do so. Three years later, Kimishima is preparing to step down and turn the Presidency over to someone new. Looking back on his brief, but important stint as President, I believe Satoru Iwata would be proud of what he accomplished.
From the beginning, Kimishima understood that his tenure at the helm of Nintendo was to be a transition period. At the age of 65, he began his term as President when most executives would be thinking about retiring or taking on reduced roles. He stepped into the role knowing that his job was to bring Iwata’s projects to fruition, maintaining his vision for the company while searching for a more suitable long term leader.
In one of his first interviews after being named President, Kimishima pledged to stay the course and finish what Iwata started. That’s no small task when you consider how many irons Iwata had in the fire, but over the past three years Kimishima has lived up to his word in many ways.
Nintendo Switch is unquestionably the most important of the projects started by Iwata and finished under Kimishima. Iwata first teased the mysterious “NX” console just months before his passing, and two years later it launched to an incredible reception. Switch sales were driven by The Legend of Zelda: Breath of the Wild but also by strong marketing. Under Kimishima, Nintendo made the decision to invest millions into the company’s first ever Super Bowl commercial just before Switch launched, and they’ve continued to give it a strong advertising presence ever since.
During Iwata’s final months as President, he had a change of heart regarding mobile games. Iwata had previously pledged that Nintendo would stay out of the mobile market, but in 2015 he announced a partnership with DeNA and plans for five mobile games. Under Kimishima Nintendo has already released Miitomo, Super Mario Run, Fire Emblem Heroes, and Animal Crossing: Pocket Camp. Dragalia Lost and Mario Kart Tour are both on the way, and there have even been rumors of a Zelda game for mobile. There’s still plenty of room for improvement and growth, but Nintendo’s mobile division pulled in ¥39.3 billion last year, or around $358 million. That’s not too shabby for a division that didn’t exist just two years ago.
Iwata’s vision of a broader Nintendo entertainment company is unfolding right before our eyes, and Nintendo’s brand recognition is the strongest it’s been in years. Combine these new ventures with a top-selling new home console and a growing mobile market, and you’ve got a Nintendo that Iwata would be proud to see.
In addition to facing the daunting task of replacing Iwata and completing his projects, Kimishima had to restore Nintendo to financial stability. When Iwata passed in 2015, Nintendo was just starting to recover from three straight years of operating losses. Iwata took the fact that Nintendo lost money under his watch very seriously, even going so far as to slash his own pay in half voluntarily.
Fast forward three years to today and it’s a night and day difference. Nintendo’s latest financial report to investors shows that the company had an incredible operating profit of $1.6 billion for the past fiscal year—the most for the company since the height of the Wii and DS craze in 2010. Nintendo was never truly at risk of going bankrupt any time soon, but their bank account has a lot more padding these days. Nintendo reported cash and deposits of $4.465 billion back in 2015, but that number is up to nearly $7 billion today.
The company’s place in the hardware market was not strong in 2015. Wii U was a commercial catastrophe, selling far less than any major Nintendo home console before it. 3DS was certainly no failure, but its slow start (which led to a massive price cut just months after launch) cost Nintendo deeply, and it couldn’t compare to the selling power of the original DS.
Once again, the difference three years makes is almost unbelievable. Nintendo Switch has sold nearly 18 million units in approximately 13 months, which is about 4 million more than Wii U sold in its entire life cycle. You might think that would spell the death of 3DS, but Nintendo’s dedicated handheld is still selling well enough that Nintendo plans to support it until at least 2020.
The continued sales of 3DS, record-breaking first year for Nintendo Switch, and growing mobile division have all put Nintendo back on the map in a big way. This is never more apparent than when looking at their stock, as Nintendo shares have risen from ¥21,055 to ¥46,180. In other words, the company’s value has more than doubled under Kimishima. If Iwata felt responsible for the company’s financial struggles from 2012 to 2014, he’d be relieved and thrilled to see how profitable they’ve become since then.
Preparing for the Future
As a transitional President, Kimishima’s job was twofold: finish Iwata’s work and prepare Nintendo for the future. Kimishima began work on the latter almost immediately. Iwata’s death left Nintendo with a massive gap in leadership, so Kimishima set out to create a future-proof system of creativity and decision-making at Nintendo.
As soon as he was promoted, Kimishima announced a massive restructure for the company. This shake-up included the decision to combine Nintendo’s two most important development branches into a single group led by Shinya Takahashi. It was also at this time that Shigeru Miyamoto and Genyo Takeda stepped back from their roles as General Managers. Both men still serve as advisers, but Kimishima believes it’s time for younger talents to have more decision-making power.
Since this initial restructure, Kimishima has stayed true to his word on the subject of promoting talent. Kimishima promoted Shinya Takahashi to be the head of Nintendo’s Entertainment Planning & Development Division, and under his guidance they just delivered two of the top-rated Nintendo games of all time: The Legend of Zelda: Breath of the Wild and Super Mario Odyssey. This excellence did not go unnoticed, and Takahashi has already been promoted again, this time to Senior Managing Executive Officer. At 39, Takahashi is much younger than many of Nintendo’s key decision makers in the past.
Yoshiaki Koizumi, who serves as Takahashi’s Deputy General Manager, has also been promoted for his hand in Nintendo’s recent success. When Koizumi wasn’t helping Takahashi oversee the development of Nintendo’s biggest games, he was serving as the lead developer of Nintendo Switch hardware. Due to the console’s immense success, Koizumi has been promoted to Executive Officer. Kimishima clearly prioritizes giving more influence to those who have proven themselves.
Lastly, Kimishima’s preparing for the future by choosing his own replacement. Kimishima promoted Shuntaro Furukawa to Nintendo’s board of Directors in 2016, and since then the two have quietly been planning Nintendo’s future behind the scenes. As Kimishima has worked to make Nintendo’s internal leadership structure more in touch, efficient, and effective, Furukawa has been by his side, advising him on how to put more power in the hands of Nintendo’s younger creatives.
Furukawa, much like Iwata, will be more than just the President of a company that makes games. Iwata famously once said “On my business card, I am a corporate president. In my mind, I am a game developer. But in my heart, I am a gamer.” I believe he’d be happy to know that his long term successor is an avid gamer who has been obsessed with Nintendo since the days of the Famicom. If Kimishima is to believed, Furukawa also has a firm grasp of Nintendo’s core philosophy that won’t allow him to stray from what makes Nintendo special.
No one could ever truly be expected to replace Satoru Iwata in the hearts of Nintendo fans, but Kimishima has accomplished more in his brief stint as President than anyone ever could have imagined. Under Kimishima’s leadership, Nintendo has launched a record-setting console, made a splash in the mobile market, branched out into theme parks and movies, and launched some of its highest-rated games of all time.
Nintendo has progressed from bleeding money to drowning in it, and there’s still more to come. In just three years Kimishima successfully capitalized on nearly all of Iwata’s ideas, elevated Nintendo from financial turmoil to tremendous profitability, and promoted some of the company’s brightest young talents to leadership roles to ensure Nintendo’s continued success in the future. Looking back over Kimishima’s Presidency, I’m sure Iwata would be proud.
Tatsumi Kimishima will soon be stepping down from his position as President of Nintendo, passing the torch on to Shuntaro Furukawa. The incoming President intends to continue many of the plans and business practices set by his predecessors, but he’s also looking to expand. In particular, Furukawa believes there’s room for Nintendo to more than double their mobile profits.
If you’re worried that this means Nintendo will be shifting most of their focus to the mobile market, you can breathe easy. Nintendo’s plan (according to Kimishima’s statements to investors) is still to release two to three mobile games per year as it always has been, but Furukawa is envisioning a blockbuster Nintendo mobile game on the scale of Pokémon GO. Niantic’s hit game (which Nintendo partially financed) has inspired Furukawa to replicate that success with a Nintendo-developed mobile game.
Nintendo’s mobile division currently only accounts for around 4% of the company’s revenue (and some of that is from character licensing) at ¥39.3 billion. Furukawa hopes to apply what Nintendo has learned from Pokémon GO to their own mobile division in order to boost revenue to ¥100 billion, or about $910 million, per year. Furukawa also told investors that improving mobile revenue is one of his biggest priorities after accelerating the sales momentum of Nintendo Switch.
Nintendo currently has several mobile games in the works, including Dragalia Lost and Mario Kart Tour. There have also been reports of a Zelda game for mobile devices, but this remains unconfirmed at this time. Although Furukawa is aiming for a mega hit like Pokémon GO, he says no such game is currently in development.
Last week we learned that Nintendo President Tatsumi Kimishima is stepping down from his position in June. Kimishima took on the responsibility of leading Nintendo when Satoru Iwata tragically passed away in 2015, but after three years it’s time to pass the mantle on to someone else.
That someone else turns out to be longtime Nintendo employee Shuntaro Furukawa. What makes him the right person for the job? Kimishima tackled that question recently when speaking with investors. As it turns out, he’s been working closely with Furukawa to make Nintendo more effective and efficient for some time now.
“My second role was to change our directorial structure to speed up decision-making and execution on a variety of projects that members of the management team were considering at the time. It takes people to support that, and it was essential that we build a structure that allowed the new generation to play an active role.
“As we progressed with delegating authority, including the authority for corporate governance, we created a system where our younger senior managers would be able to act. In the past two-plus years, they have shown what they are capable of accomplishing. Our latest financial results are far better than I originally forecasted, which speaks to the fruits of our efforts to date. My successor, Mr. Furukawa, worked with me as General Manager of the Corporate Planning Department to advance our operations. He has fully fleshed out what this non-traditional collective leadership system we created will be, so I believe this is the perfect time (for a change of president).
“With the breadth of projects we are working on, now is the time to transfer power further to new people and to promote a generational shift to bring stronger momentum to Nintendo through these changes.” — Tatsumi Kimishima
Later in the Q and A session, an investor brought up the fact that former Nintendo President Hiroshi Yamauchi once said Nintendo’s presidents must always be “unusual.” Kimishima interprets this to mean someone who understands Nintendo’s core philosophy and stubbornly sticks to it, even when others disagree. In this regard, Kimishima believes Furukawa is thoroughly qualified.
“As to whether Mr. Furukawa is in any way unusual, I can just say he has extremely strong inner fortitude. He has clear and articulated opinions, he understands the Nintendo point of view, and he can express that to everyone in his own words. The Corporate Planning Department (headed by Mr. Furukawa) has the important mission of conveying the Nintendo point of view to all employees, including people involved in development and sales as well as people in other countries. It is important that the department remain on point no matter where the conversation leads, and he has been extremely competent at that.” — Tatsumi Kimishima
Kimishima also praised Furukawa’s experience working outside of Japan. Over half of Nintendo’s 5,500 employees are located outside of Japan, so Kimishima believes Furukawa’s global experience will be vital in decision-making. All in all, Kimishima expects Furukawa “to bring the best out of the excellent people responsible for software development, hardware development, sales, and marketing.” Kimishima and the rest of the executive board believe Furukawa can steer Nintendo in the right direction without losing sight of what’s important.
Nintendo just announced that Tatsumi Kimishima is stepping down after serving as the company’s President for three years. Pending a later vote, Kimishima will be replaced by the much younger (46) Shuntaro Furukawa. Some fans were initially skeptical of Kimishima, as his background was entirely rooted in the business rather than game development. As it turns out, Furukawa’s career echoes that of Kimishima.
Both men worked with The Pokémon Company before ascending up the corporate ladder to head up Nintendo proper. Like Kimishima, Furukawa has no background in video game development, but that doesn’t mean he’s a generic money-minded CEO lacking a true passion for games.
Speaking with Bloomberg, Furukawa revealed that he’s been an avid gamer for around three decades. Nintendo’s new President grew up playing Famicom, the Japan-only precursor to the Nintendo Entertainment System.
“I grew up playing the Famicom and come from that generation. Now as a member of management with Super Mario’s creator Shigeru Miyamoto, I have a lot of respect for him. On the other hand, with this new job that can’t just be it, so I expect to say what needs to be said to run the company.” — Shuntaro Furukawa
Furukawa’s love of games is well-known. In a separate story from The Wall Street Journal, analyst Hideki Yasuda revealed that he has approached Furukawa to discuss data about the company, but the conversation usually gets sidetracked into a friendly discussion about video games. Furukawa has also revealed that his favorite recently-released game is indie exclusive Golf Story on Nintendo Switch.
It seems like just yesterday that former Nintendo President Satoru Iwata tragically passed away, but it’s been nearly three years. Tatsumi Kimishima has been serving as Nintendo’s President since just a few months after Iwata’s passing, but that too must now come to an end. Nintendo announced today that Kimishima will be retiring as President, effective June 28th.
Despite Nintendo’s use of the word “retirement,” Japanese publication Nikkei reports that he will continue to advise Nintendo going forward. To fill the shoes of Kimishima, Nintendo is planning to appoint 46 year old Shuntaro Furukawa to President and Representative Director. Furukawa has been with the company since 1994, and he’s currently both a Managing Executive Officer and Supervisor of Corporate Analysis & Administration Division at Nintendo.
Kimishima’s replacement by Furukawa is just one of several big administrative changes made by Nintendo. Nintendo of Europe President Satoru Shibata will also be stepping down, but instead of retiring he’s taking a job as a company Director. Meanwhile, Shinya Takahashi will be promoted to Senior Managing Executive Officer, and Yoshiaki Koizumi will be promoted to Executive Officer, putting some of Nintendo’s younger talent in key decision-making roles.
Takahashi’s current role is overseeing Nintendo Entertainment Planning & Development, while Yoshiaki Koizumi serves as Takahashi’s Deputy General Manager. Notably, Koizumi also took the lead role in developing Nintendo Switch. Given the success of both the console and the games produced for it by Nintendo EPD, these two have quite the recent track record.
Nintendo recently held its 76th Annual General Meeting of Shareholders, and the meeting brought some changes to Nintendo’s board of directors. Nintendo President Tatsumi Kimishima proposed a corporate restructure last April, and it was officially approved on June 29th. As a result, four of Nintendo’s Directors resigned their positions, and five new Directors were added to the board.
As always, Nintendo held an annual vote to decide if the current Directors should be retained, and (excluding the Directors who resigned) all of them were. During this process, all of the Directors were assigned approval ratings by the shareholders. The results were largely positive, as every Director had an approval rating of 90% or higher, and each returning Director saw an improved rating over last year. The lone exception is Kimishima himself, as his approval rating dipped from last year’s 92.60% to 87.14% this year. You can check out the full list of Directors and their approval ratings below.
Back in April, Nintendo President Tatsumi Kimishima announced plans to shake up Nintendo’s corporate structure. Under Kimishima’s proposed plan, five new Directors would be appointed (with four stepping down) and a new Audit and Supervisory Committee would be formed. Under this proposal, Nintendo of America President Reggie Fils-Aime and Nintendo of Europe President Satoru Shibata would also both be promoted to the position of Managing Executive Officer.
Kimishima’s restructure plans were approved at Nintendo’s 76th Annual General Meeting of Shareholders, and the new Directors are now officially in place. As usual, Nintendo also voted on whether or not to retain its current Directors. Tatsumi Kimishima, Genyo Takeda, Shigeru Miyamoto, and Shinya Takahashi, were all voted in once again, and they will remain on the Board of Directors.
The four Directors that have resigned their positions are Shigeyuki Takahashi, Satoshi Yamato, Susumu Tanaka, and Hirokazu Shinshi. They have been replaced by Naoki Noguchi, Naoki Mizutani, Yoshimi Mitamura, and Katsuhiro Umeyama, the four members of the Audit and Supervisory Committee. Additionally, Shuntaro Furukawa has joined the board of Directors.