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Monday, November 11, 2019

Nintendo Investor Q&A: No Defined Remake Policy

By LUDWIG VON KOOPA - Plus, scary China stuff.

You might vaguely remember that I published good Nintendo financial news here a week ago, related to their quarter ending September 30, 2019. Good news is less memorable than bad news (unless Nintendo doing well upsets your feelings or your investment strategy), so I understand if you found the whole affair underwhelming. Regardless, Nintendo's president, Shuntaro Furukawa, took questions from investors and answered some of them.

The last time Nintendo held a Q&A briefing with investors was half a year ago (that's two quarters ago), where I commented:
“No matter who has been the president in the past several years, there's no new information presented in these Q&A sessions. I hope next time, the investors go back to asking silly, amusing questions, because Nintendo management sure won't say anything useful or entertaining. It's the anti-KoopaTV.”

Guess what? The questions were pretty relevant, and Nintendo management was still unhelpful.

Investors generally wanted to know about the Nintendo Switch Lite, which has sold about two million systems. What kind of people are buying it? What's driving their behaviour? Are they more or less profitable than a regular Nintendo Switch customer?

Of course, the quarter ended September 30. Nintendo Switch Lite came out September 20. Even with an extra month in-between the financial results and the reporting, it's really not enough time or data to know the answers to those questions. So Furukawa talked about his feelings, and his thinking that things may change, and considering many unspecified options. Whatever. Seems that, despite his briefing saying that women constitute a larger percentage of Nintendo Switch Lite first-time buyers than the standard Nintendo Switch, Nintendo Switch Lite buyers purchase games that “are preferred by core gamers, such as The Legend of Zelda: Breath of the Wild.” Not girly casual games, I guess. But he thinks this'll change.

Nintendo isn't thinking specifically on bringing back past retro/nostalgic handheld (Game Boy, DS) titles for the handheld Nintendo Switch Lite, and they do not possess a defined policy to remake more games like The Legend of Zelda: Link's Awakening or Pokémon Yellow Version: Special Pikachu Edition. It just happened that way. Furukawa thinks everyone loved the new features in Link's Awakening... like... quality-of-life controls, I guess, and wants to meet nostalgia needs as well as new features. Well, no one cares about that dumb puzzle piece dungeon maker. Anyway, the remakes just happen to appear. By accident, I guess. Can we mysteriously get Kirby Air Ride or something next? With new features like an expanded City Trial mode with online multiplayer?

The Legend of Zelda Link's Awakening Nintendo Switch Chamber Stone store rupees
Step away from the Chamber Stone, Link.
And don't you dare steal it. That's not something I have to worry about... USUALLY.

As usual, investors see China as a big money-making opportunity. Lately, gaming industry customers are seeing China as a big risk and a selling out of fundamental values. Nintendo has no comment on China, but says China's Tencent will make the first announcement. They're still getting approvals.

The fact that you got to work in a country with such a ludicrous approvals process should tell one something about how much they want your business.

However, as reported by the Wall Street Journal, an anonymous Tencent official (and hopefully this doesn't count as Tencent making the first announcement) desires to “create console games with Nintendo characters, and learn the essence of making console games from Nintendo engineers.” For Nintendo's part, there's no indication they're willing to let Tencent do that. Instead, Nintendo is reported as giving cryptic communications to Tencent that have to be “decode[d]”.

What this means is cryptic to KoopaTV as well. So is what you were supposed to get out of this article. Well, we'll probably reference this later at some point in the future, so don't forget about it.

Ludwig used to be a Nintendo (NTDOY) investor, but he sold the stock off because it's not a very good growth stock, due to it either being quite volatile or just not growing. He learned that just because his life's work is in videogames, that doesn't mean it is an appropriate industry to invest money in. Consult your financial advisor (be it a person, firm, or your intuition) for alternatives.

Ludwig's coverage of the next question & answer session isn't just analysing a cryptic answer... but an outright senile one.
You want VERY scary China stuff? Check out the question & answer session six months later.

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