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Nintendo's Iwata: Being first to market isn't important

Nintendo's Iwata: Being first to market isn't important Exclusive

July 20, 2012 | By Chris Morris

Microsoft's one-year head start on Sony this generation is often cited as one of the reasons the Xbox 360 has established such a dominant lead over the PlayStation 3.

By that logic, the Wii U should be in a good position for the next generation, given it will have at least one year to build an installed base before it has to worry about competition for other console makers. Satoru Iwata, Nintendo's global president, however, isn't a big believer in that theory. First to market, he says, might be a nice bragging right, but in terms of the bottom-line, it's relatively meaningless.

"Being first in the next generation race is not important at all," he tells Gamasutra. "One of the reasons we believe this is the time for Nintendo to launch the Wii U is it's going to be important for the world."

That's a big, some might say haughty claim, but Iwata explains the rationale behind it.

When the Wii launched, HD TVs were hardly commonplace, something that has changed today. In the interim, though, the second screen has become a force to deal with.

Apple's iPads, and other tablets, are expensive, though - and the Wii U offers an alternative. In addition, Iwata doesn't believe people who have bought a high definition television in the past few years are likely to buy a replacement model for five years or so.

There's a lot of pressure on the Wii U. Nintendo recently reported the first corporate loss in the company's history as a publicly traded firm. Iwata says he does not expect that to be repeated next year.

"Our intention is to return to profitability after just one year of losing money," he says. "I just cannot say that it's a good thing for Nintendo at all to record an annual loss for two or more years in a row. ... The [loss of the] past year is due to the 3DS hardware sales. We were selling hardware below the cost, so this year we are already recovering and improving the profitability of the 3DS."

(Iwata says Nintendo is still losing money on 3DS hardware, but that will change "in the very near future ... based up on where we are today in terms of our schedule to return to profitability.")

While Nintendo hasn't announced pricing or a launch date for the Wii U, Iwata says the company learned a lot with the launch of the 3DS handheld system, on which it was forced to slash prices just months after the system launched in the U.S. due to poor sales.

"The pricing of Wii U is going to be one of the most important elements when it is going to be launched," he says. "The environment is different. Wii U is going to be launching in a different environment than when the Wii was launched. Also, the involvement surrounding [mobile and social] businesses is different than several years ago."

As for the struggling Wii, don't expect it to go away forever when the Wii U hits shelves later this year. Iwata says that although Nintendo's focus will have shifted, he recognizes there will still be a market for the device.

While doubters have long since declared it dead, he still sees a lot of money left in the system - in both international markets and domestic.

Speaking of dead, don't think Iwata hasn't heard the catcalls about the Wii U simply matching the power of the Xbox 360 or PS3. And he's certainly heard the grumbles of forum dwellers that believe Nintendo should give up and begin licensing its games.

They're annoying, but Iwata points out that Nintendo has been dealing with premature obituaries for years.

"Even when we were going to launch the Wii system, there were a lot of voices saying 'Nintendo should stop making hardware'," he says. "The reasoning behind that was Nintendo would not have any chance against Microsoft and Sony. The fact of the matter was: I did not think Nintendo should compete against these companies with the same message and same entertainment options for people.

"We have not changed our strategy. In other words, we just do not care what kind of 'more beef' console Microsoft and Sony might produce in 2013. Our focus is on how we can make our new console different than [others]."

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