Nintendo’s New World, From The Switch To Phone Games To Theme Parks
As president and COO of Nintendo of America since 2006, Reggie Fils-Aimé has seen a lot of history—from the era-defining success of the Wii console to the Wii U’s underwhelming reception to the arrival of the company’s intellectual property on smartphones last year with Pokémon Go and Super Mario Run. Most recently, the company has rebounded in a big way with the Nintendo Switch, a console that lets you play games on a TV or on the go. Strong sales for the Switch and its games have led to the best financial results for the Japanese gaming giant in years.
With last week’s release of Super Mario Odyssey—a new Switch game that sold 2 million copies in three days—I chatted with Fils-Aimé about the state of Nintendo, its platforms, and its venerable franchises.
Fast Company: In the period when you knew about the Switch but the world didn’t, was it obvious to you that it at least had the potential to be a blockbuster and silence some of the people who were saying “Nintendo, hardware is dead, you should just be a smartphone app company?”
Reggie Fils-Aimé: Yeah, absolutely. You know, I was fortunate. I saw early prototypes. I held a plastic model of the device and gave input. And I can honestly say that when I first saw the games, the experiences, like 1-2-Switch, and The Legend of Zelda, I had the same feeling that I did when I saw prototypes of the Nintendo DS or prototypes of the Wii. I knew that we had something that was differentiated out in the marketplace that would be compelling to the consumer, and would provide experiences that they’ve never had before, and that was very exciting.
FC: The Wii was such a hard act to live up to, and a lot of people thought that it might be impossible. But it seems like the Switch has a good shot at being a success on that level.
RFA: Certainly commercially successful, but I would say the other piece that gives our development teams a lot of pride, are the games that are coming out on the system and how the games are breaking through. The Legend of Zelda: Breath of the Wild is a completely innovative take on the Zelda franchise. It’s not linear. You don’t go into an area and earn a weapon to go beat a particular dungeon. There are no dungeons. It’s a whole different way to play Zelda.
Super Mario Odyssey is a different type of Super Mario experience. Yes, you have to beat Bowser and make everything right in the world, but it’s this big sandbox experience. Brand-new franchises like Arms. Continuing intellectual property like Splatoon. I think that’s what excites us so much, is bringing all of these great new experiences out to the marketplace.
“WE LOOK AT OUR DEMOGRAPHICS CONSTANTLY”
FC: Do you have a sense as to whether the people buying the Switch are classic Nintendo fans? Or also people who either aren’t Nintendo fans or maybe were once Nintendo fans but not so much in recent years?
RFA: We look at our demographics constantly and certainly there’s a group that are Nintendo fans. There’s a very large group that are new to Nintendo, and that’s very exciting to see. For these consumers to get exposure to our intellectual property, to be able to play games that they can’t play anywhere else. That’s another signal to us that we’ve really struck a chord with the Nintendo Switch.
FC: I’ve seen them out and about quite a bit, with people taking advantage of the ability to roam.
RFA: Personally, I see them in airports. I see them on planes. The ability to take a home console with you and play anywhere really has struck a chord with the consumer.
FC: Now that it’s clear it’s doing well, have the larger third-party publishers gotten more interested?
RFA: Absolutely. And it’s fair to say that when we first showed the concept, third-party publishers were excited at that point. You know, they saw what we saw, which was this is differentiated, this is compelling. This is going to add an audience to their marketplace. And certainly with FIFA, for example, from EA launching the same day, same date, as on other platforms, they made a commitment. Ubisoft, with their products. Bethesda and Take Two, which are companies that, certainly in recent memory, haven’t been on the Nintendo platforms. They see the opportunity and the potential. And there’s a lot of opportunity and excitement, both with the big third-party publishers, as well as the small independent developers to get on board.
FC: When I started using mine I was impressed by all the indie games and I wasn’t sure if that’s because there were more of them than usual or there’s just a little less noise and it was easier for them to pop out. Do you expect it to be a good indie platform?
RFA: It will continue to be a good indie platform. I think the reason the great indie content came was because we made the decision early to have [major game engines] Unity and Unreal Engine support for the system. So that enabled the independent developer to have an easier pathway to develop for the platform, and that’s enabled them to bring the content. I think the other piece that they see is that we give them a lot of support. Support in terms of the news feature on Nintendo Switch, and we highlight a lot of the independent games there. Our strategic communications group gives them a lot of support. You know, things like PAX [Penny Arcade Expo]. We feature the indie content exclusively. And so they’ve been able to break through and to be noticed on our platform, maybe more effectively than on some other platforms.
“WE’RE GOING TO CONTINUE TO BUILD OUT THE INFRASTRUCTURE”
FC: When we did our Switch review, we said lots of nice things, but we also said that there’s things it doesn’t have yet, like the Virtual Console, and there’s no entertainment beyond gaming. There’s some online stuff it doesn’t have yet, too. Is the experience going to get richer as time goes on?
RFA: Absolutely. Let me address those in reverse order. We just did a network update that continues to give additional features. Now it’s easier to transfer content from one Switch to another, and so we’re going to continue to build out the infrastructure for the system just to make it easier and easier for our consumers to utilize.
In terms of other entertainment, we were clear, at launch, that we wanted this to be a gaming device and to deliver on that proposition, but we also said that VOD [Video on Demand] services would come in due time. And they will.
In terms of Virtual Console, we’ve said that with the launch of Nintendo Online and that service, that there will be executions on legacy content as part of that, and that’s something that’s going to launch next year. And so we’ll detail that at the appropriate time.
But we’re aware of these criticisms and certainly, our focus is to continue making Nintendo Switch a product that people want to spend time on and can say, “This is a great innovation and something I’m proud to have.”
FC: One other question about the Switch hardware. When I first used it, I was struck the it felt grown-up for a Nintendo product. Was that at all intentional, catering to people who think of themselves as wanting high-end consumer electronics?
RFA: What I would say is that, our designers really challenge themselves to make hardware that people are going to want. They’re going want to show off. Clearly, what we’ve been able to do with Nintendo Switch has taken us to a new high bar. And it’s not just the way it looks. It’s the way it feels in the hands. It’s the responsiveness of the operating system.
FC: The user interface.
RFA: The UI is exceptionally well done. For us, it really is a continuing maturation, a continuing growth of how we deliver stellar products, stellar content to our consumers. And the Switch is a new high-water mark for us.
“THERE IS NO BENEFIT IN A CUSTOMER BEING DISAPPOINTED”
FC: Whenever we write about Nintendo, we hear from conspiracy theorists who think you’re intentionally making your products hard to get. But I looked on Amazon this morning, and it looks like it’s not that hard to get a Switch. I bought mine at a Target. Are you catching up with demand and will there be a point where it’s a cakewalk to buy this device?
RFA: We continue to increase production. We continue to make improvements in our supply chain. And that’s something that we’re committed to do. The piece that we don’t control is the demand, and so I can’t say with certainty that we will quote, unquote, “catch up” with demand. And we continue to encourage folks, especially for this holiday season, that if you want a Switch, when you see it, pick it up, because the demand continues to be exceptionally strong. But our focus is to make it so that you can walk into a retailer and buy any of our products. There is no benefit to a consumer being disappointed in not being able to buy our products when they want.
FC: I know with the Super NES Classic you said you were working hard to make that go much more smoothly than the NES Classic.
RFA: And it did. Again, on launch day you could buy it. I encourage consumers not to pay reseller prices, and they haven’t. And so we’re focused on making sure our products are readily available. It’s good business.
“ALL OF THESE FEED ON THEMSELVES”
FC: And now that the Switch is out, how do your smartphone games fit into the larger Nintendo story?
RFA: They continue to fit in exceptionally well. Our business strategies, our mission in life, is to make people smile. We are an entertainment company. We’re about fun. We’re about encouraging those types of positive moments in our consumers’ lives.
We do that fundamentally three different ways. We do it with our dedicated games business. We do that with our mobile business, and we do that through other forms of entertainment, whether that’s merchandise licensing or whether that’s a relationship with a company like Universal Studios. All of these feed on themselves.
As an example, last year when Pokémon Go launched, we saw our Pokémonbusiness on dedicated handhelds grow. When Super Mario Run launched, we saw our Mario business grow on our dedicated games business, as well as the licensed merchandise business. When Animal Crossing launches shortly, we fully expect the games to have a resurgence out in the marketplace. They all work together. Because fundamentally we believe that, on one hand, there are fans that love the IP [intellectual property] and they’ll play it and engage with it however they can, but there are also consumers who have never engaged with an IP before, that this gives them a great opportunity to do it.
The other piece we see is that it gives us exposure to markets that historically have not had dedicated Nintendo systems. Whether that’s a market like Brazil, or South Korea, or China. And it’s a great way for consumers to become engaged with our franchises.
FC: When I heard the news about your partnership with Universal [for Super Mario World theme parks], I got all excited. I’m not sure how much you’ve actually disclosed yet about the details and what’s happening.
RFA: What we’ve said is that the first park will be in Osaka, Japan. That the park will open before 2020, which is when the Olympics are in Tokyo. The development process continues, and our senior most executives, like Mr. Miyamoto, are engaged in that process, and it’s something that we’re all very excited about and looking forward to.
FC: And is it an active collaboration with the Universal folks?
RFA: A very active collaboration. The Universal folks understand theme parks and theme park technology better than anyone else in the world. We understand our intellectual property. We understand what makes them fun better than anyone in the world, and that collaboration is what’s making this special.
“WE’VE GOT MORE GREAT GAMES COMING”
FC: If you had a Switch … which I assume you do, actually…
RFA: I have it upstairs. It’s charging, getting ready for my flight home.
FC: If you were just somebody who had gotten a Switch recently, what stuff should you be looking at over the next few months in terms of major things to be excited about?
RFA: Well, look. If I’m a consumer who just purchased a Nintendo Switch, here’s what I would do: I would absolutely buy The Legend of Zelda: Breath of the Wild. That game is going to be talked about 10 years from now, 20 years from now, as a defining point in this industry. It is compelling. It is a game that you’ll play differently than your friends. I’ve talked about this with other Nintendo employees in terms of just how we approach that game. It is a masterpiece. I would buy Splatoon 2, our unique take on a first person experience. I would absolutely buy Super Mario Odyssey. All of the reviews are coming in, but it’s actually possible that Super Mario Odyssey will be even more highly critically acclaimed than The Legend of Zelda: Breath of the Wild. I would absolutely buy a second dock to be able to hook my Nintendo Switch to a second TV in my household. And I would absolutely pick up a pro controller, because there are certain games like Splatoon, like The Legend of Zelda, that are best played with the pro controller.
Right now our focus is on this holiday, so we really haven’t talked about details of games coming next year, other than that we showed off a Yoshiexperience; we showed off a Kirby experience. We’ll be talking about 2018 after the holiday season is over. But the good news is we’ve got more great games coming, and we’re going to work very hard to make Nintendo Switch a vibrant platform for many, many years.