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Monday, November 14, 2022

Nintendo and DeNA Form "Nintendo Systems Co., Ltd." to Make Nintendo Account Worthwhile

By LUDWIG VON KOOPA - A joint venture for the Nintendo Account.

At first, Nintendo Co., Ltd. and DeNA Co., Ltd. formed a business alliance in 2015, exchanging capital ownership. DeNA is a Japanese company that, among many other things, has helped developed several Nintendo mobile titles and has also assisted with Nintendo's mobile and network infrastructure, including Nintendo Accounts and the My Nintendo program. In a recent (half a year ago) question and answer session with Nintendo, an analyst or investor asked about the current state of the DeNA partnership, given DeNA's announcement that they'd sell their Nintendo shares. Nintendo president Shuntaro Furukawa responded that the partnership is not only still on-going, but will be strengthened.

It turns out that answer was based on reality, as opposed to vapid corporate empty promises. Nintendo and DeNA have announced a joint venture to be called Nintendo Systems Co. Ltd., as a subsidiary of Nintendo. Per the announcement, “the objective [of this joint venture will be] to strengthen the digitalization of Nintendo's business, the joint venture company will research and develop, as well as create value-added services to further reinforce Nintendo's relationship with consumers.” It's scheduled to begin its existence on April 3, 2023, and Nintendo will own 80% of it while DeNA will have 20%.

It's not clear what will be possible as a result of this joint venture or special subsidiary that was not possible with Nintendo and DeNA's previous business (strategic) alliance, but joint ventures are seen in business as a much closer relationship than an alliance, given that Nintendo and DeNA are now creating a whole new, formal legal entity to enshrine their partnership that didn't exist before. In terms of impact on the output (say, how Nintendo customers will benefit), that's indeterminable at this time.

Pay attention to the objective: it's platform-agnostic. While DeNA has been one of Nintendo's main partners in co-developing mobile games (Niantic is another partner) with titles like Miitomo, Fire Emblem Heroes, and Animal Crossing: Pocket Camp, researching and developing Nintendo Account-related stuff and customer relationship touch points can happen on your console, your mobile device, or many other opportunities. This joint venture isn't doubling down on mobile app development per se.

Nintendo Account long-term relationships with customers purchase history save data friends experience data
That purchase history only goes back two years, you know. That's not very long-term.

For examples and further colour, let's look back to the Nintendo Corporate Management Policy Briefing for Fiscal Year Ending March 2023. Nintendo has been saying their strategy has involved “expanding the number of people who have access to Nintendo IP” for years, and their current examples include their mobile games, merchandise (like their partnership with LEGO), visual content (like The Super Mario Bros. Movie with Illumination), and theme parks—Super Nintendo World will supposedly be open in Hollywood early 2023 at Universal Studios Hollywood.

Nintendo claims that “the number of unique downloads across all our mobile apps totaled more than 800 million.” That is the total number of unique users across all of the apps they have released so far across 164 countries. They think that's a very good number, and in some cases, those countries include regions where you can't easily acquire a Nintendo Switch from your local game store.

Speaking of stores, they've opened several “pop-up stores” (only in Japan) where customers can use their Nintendo Account to “check in at each store and pop-store to receive special rewards.” I'm not sure what those rewards are besides, like, phone wallpapers and My Nintendo Platinum Points. (And collectible pins!)

Nintendo says there are over 290 million Nintendo Accounts across 164 countries, so that means only about a third of those mobile users have a Nintendo Account—not taking into account that Switch owners are more likely to have made one. That seems like a dismal number. Still, for those many millions of people, Nintendo is investing up to (and the way this is presented it seems like additional money, above what was initially budgeted) 300 billion yen (or about 2.16 billion United States Dollars) in “strengthen[ing] and expand[ing] our points of contact with consumers, centering on Nintendo Account, and promote infrastructure development and partnership building”, which includes funding the joint venture Nintendo Systems, operating those physical pop-up and permanent stores, and “expanding the Nintendo Switch Online service”. That's a lot of money, though a lot of it (I don't know how much!) has already been spent, but it's more than the investment for actual game development (100 billion yen) and non-game content that is adjacent to game content (like the movie; for a total of 50 billion yen).

Splatoon 3 Anarchy Splatcast Shiver million times a million quadbillion gazillion
A million times a million is a trillion, which is about how much cash Nintendo has (in yen).
Shiver knows this and just wants to troll her companions. ...Alternatively, she's pretending to be a troll and is actually not as smart as she believes.

Since Nintendo spent a major portion of their presentation talking about this, I'd like to think they've put together a conceptual strategy for how to get Nintendo fans to actively think about Nintendo Accounts in a useful and pleasing way. To me, it seems like what Nintendo has devised up to this point (and maybe the joint venture will change this) are “random acts of marketing.” This would be opposed to a thoughtful mapping of a customer's journey. I don't have data to back this up, but I'd guess most Nintendo fans don't understand what a Nintendo Account is and all of what it does. The true use case for it comes with a hardware transition (this is how you got your 3DS and Wii U friends imported to your Switch), but with the Nintendo Switch being the first Nintendo console for many in a while (or ever), and with the Switch having a long lifespan, customers right now just don't have much to say about Nintendo Account, or know that some services they might occasionally use fall under the realm of their Nintendo Account.

The best way to make Nintendo Accounts worth it is to bring back Miiverse and have Nintendo Accounts be the log-in!

Nintendo is sure to say more about Nintendo Systems Co. and Nintendo Account developments as they have more to say and they actually develop things. Stay tuned to KoopaTV and/or official Nintendo press materials for whenever that happens (likely at or around April 3, 2023).

Nintendo also mentioned the Nintendo Pictures deal has officially closed.


  1. Hmm. I wonder what this new subsidiary will actually DO? If anything.

  2. Ignoring the fact that the Big Man just said a whole sentence with one word, this is all very interesting. Sure Nintendo may have all those accounts but whos to say their all active accounts, and partnering up with the people behind Miitomo isn't exactly riveting but i do look forward to all the new progress that will be made going forward.

    1. We know Nintendo Switch owners are active, but we don't know what people do with Nintendo Accounts. (Though that may be good enough for Nintendo.)


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