The American face of Nintendo, President and Chief Operating Officer Reggie Fils-Aime, once said, "I'm about kicking ass, I'm about taking names."
Nintendo hasn't been kicking much ass over the past few years — the company posted a $456 million operating loss in its last fiscal year, its third loss in a row. Though the original Nintendo Wii console was a hit with consumers, analysts have called the new version, Nintendo's Wii U, a flop.
Critics wonder why Nintendo doesn't take a leap by creating or licensing content for mobile devices many consumers already own.
Recently, Nintendo released Mario Kart 8 to rave reviews and more than a million sales in its first weekend. At this year's E3, or Electronic Entertainment Expo, the company announced a new intellectual property, Splatoon, a family friendly take on multiplayer third-person shooters (using paint guns instead of gun guns). Splatoon uses the GamePad to display a map that allows players to instantly teleport around the arena by touching a teammate's location.
NPR sat down with Reggie Fils-Aime at E3 in Los Angeles to ask him a range of questions about Nintendo's present and future.
People are saying that Nintendo is the underdog, since Sony's PlayStation and Microsoft's Xbox are selling better. What do you say when people say that?
Both of those other competitors have other business lines, so by definition we are a smaller company, so by definition we must be the underdog. In terms of sales, the fact of the matter is that the sales will ebb and flow with the momentum of the software. For us, we are seeing a lot of momentum in our business with the launch of Mario Kart 8. We believe with the pacing of launches that we have over the next number of weeks that we'll continue to see very strong momentum. For our competitors, much of the content they showed was 2015 content, so over the next number of months through this holiday we'll see in terms of who sells the most.
What's the competitive landscape for Nintendo right now?
The competitive landscape for us is very broad. We see ourselves in the entertainment space. We compete with listening to the radio, we compete with watching TV, we compete with social networks. We compete with all of the time that consumers spend when they're not sleeping, they're not eating, not going to work or going to school. Because everything else is entertainment time.
You have so many fans of your intellectual property, why you don't license that property out to others?
For us, the power of those franchises really is a key equity of the company. We believe that creating a Mario game is a special endeavor. We believe that either our own teams or teams that we direct are best capable of creating Mario games that will live up to the franchise. The same is true for Metroid and Zelda and all those wonderful properties. For us, we want to control those characters as a key corporate equity.
So why aren't we seeing profits?
What we haven't been able to do is to launch that steady drumbeat of software to drive that profitability. The entertainment business is a high-risk business. What I would tell you is, for us, it really is about driving a pace of software launches that can drive our overall profitability. We believe that really with the beginning of this past holiday, we now are on a very solid path of having key product launches not only in our handheld business but in our home console business to drive profitability.
Some people say the age of the consoles might be ending. One of the reasons that the other two big console makers have added these other add-ons is because they are trying to become the center of the living room. Do you foresee the future without a console?
Well, two things. First, when you talk about the competitors adding a range of different services, those services are on our platforms as well, so I would be careful to call those defining characteristics. I think, in this day in age, if you don't have the video-based entertainment proposition, a social element proposition, that it is a very tough place to be.
Do you think the consumer is moving away from consoles to other kinds of games?
I think that the consumer is always in search of new forms of entertainment, and where that journey ends, we'll all see. The consumer is in search of entertainment, and wherever that search takes them is where they're going to go. In our view, with franchises like Mario and Zelda and Metroid, we're going to be right there with them.