FEB. 3, 2016 • Last December, Nintendo Co. Ltd. launched a new online account service in Japan intended to link experience from all of the gamemaker’s content. Rather simply dubbed, Nintendo Account, the service encourages access from mobile devices and PCs, as well as Nintendo’s own console systems. Login utilizing Facebook, Google and Twitter accounts is also supported. Starting February 17, Nintendo Account is rolling out to an additional 38 countries. The widespread introduction is necessary to support the firm’s new membership program, My Nintendo, which replaces the Club Nintendo loyalty program that was retired last year. My Nintendo will debut in March and will feature a system where points are awarded to consumers by playing games and apps, as well as interacting with information coming from Nintendo. The latter will be tailored directly to the unique actions and profile choices of each My Nintendo member. As a result, the special offers and discounts will be specific to each member. Nintendo is looking to sign up 100 million members to the service within the first year. Complementing the My Nintendo introduction is the release of the gamemaker’s first mobile app, Miitomo, in 16 countries. Japan will get the entertainment communication first in Mid-March, with the other territories following closely behind by the end of the month. Those who sign up for Nintendo Account and pre-register for Miitomo will receive a free bonus for the app.
In other news from Nintendo’s investor call this week, for the nine months ending December 31, 2015, the company posted digital download sales of ¥30.5 billion ($258.3 million), up from ¥21.1 billion ($178.7 million) for the same period the previous year. Net revenue was down 4% percent to ¥425.7 billion ($3.6 billion) as the company sold less hardware (5.9 million from 7.1 million) and software (38.9 million from 53 million.
Impact: The main mobile play for Nintendo is getting its brand back to the masses. Until it can release new hardware systems. Nintendo is focusing on a strategy to get its IP in front of more consumers worldwide to draw more of them to its existing platforms. Miitomo is the first salvo in that regard, and a primary reason why it had to release at the same time as the My Nintendo service. Nintendo needs to capture as much personal data as it can from smartphone users who are not already owners of its systems, and use My Nintendo to tailor enticements to its other products. Nintendo is also mindful that it can use this online connection to increase downloadable software sales. Percentages are already up, but the gamemaker sees an opportunity to boost total online revenue beyond what was already coming its way.
Beyond these initiatives, the next big thing for Nintendo is taking advantage of the 20-year anniversary of Pokemon on February 27 to help reinvigorate 3DS sales. Special edition 3DS and 2DS hardware are slated, as well as numerous nostalgic Pokémon bundles. Another bright spot has been the sale of amiibo toys-to-life characters that now total 42 million with indications that consumer interest is still growing. Despite these initiatives outside its core business model the real elephant in the room is when will Nintendo launch a new system. There is tremendous pressure on Nintendo to release a Wii U replacement despite wiser calculations that getting its next console introduction right is more important than rushing hardware to market. Nintendo is not in dire financial straits since it manages to deftly post small profits thanks to factoring in cash reserves and receivables. Regardless, we expect the gamemaker can only manage modest gains to its revenue streams for fiscal 2017. Launching a new game system will probably not change that. All else being said Nintendo is a power to watch if it starts to get back on its feet.
