Quote:EGM: What do you think Sony and Microsoft are doing right, and what do you think they're doing wrong?
George: I think that in Sony's case, the backward compatibility [from PS one to PS2] gave them a great sense of momentum. That was not possible for GameCube because we were moving from cartridges to discs. I think, in Sony's case, they're doing very few things wrong. While they don't have their own ability to produce huge megahit titles, they were in the right place at the right time with the size, and they got things like Ridge Racer, and particularly Grand Theft Auto, to really drive their whole platform. So I think they're doing many things right, but a few things that are individually driving their overall business.
With the Xbox, I think they did a great job bringing the PC gamer into the console world. They lived off the success of Halo for quite some time. I do think, though, that for both Microsoft and Sony, they're placing a lot of emphasis on the online area, which has a lot of interest from consumers, but hasn't really shown much in the way of results yet.

EGM: Do you feel that Nintendo's conservative approach to online gaming may put you at a disadvantage when the next generation of systems come along?
George: If we look at the situation as it stands today, we've got about 30 million systems sold between the PS2, Xbox and GameCube, and about a million and a half people have actually bought an online service -- about a million for Sony and half a million for Xbox. So that's about five percent of the hardware install base that spent the money to get involved. Most of those people have yet to spend any money on a monthly or annual basis for a subscription.
This holiday season and the following year will be very telling for online gaming, because consumers' free one-year subscriptions will run out and they'll have to decide -- do I spend, or not? That, or our competitors will have to decide whether to continue giving it away for free. So I don't think that we're missing anything by not being involved. I will say, though, that it certainly has played out the way we thought it would in this generation. The hype may have been more important than the actual substance.
But having said that, we know that consumers continue to be interested in online gaming, and we know that it has to be a component of our next system. We're thinking about how we can fit it in, what kind of partners we would need, and so on.

EGM: At the same time, though, both broadband access and interest in online gaming is likely to expand over the next two or three years from now. Wouldn't that put Nintendo's next system at a disadvantage, since consumers are already familiar with the PS2 and Xbox's online abilities?
George: We've always believed that the social aspects of gaming are one thing that propels our market forward. We've focused particularly on four-player games and things of that nature, but Pokemon, with its ability to exchange data between Game Boys, really took that to a whole new level of hardware sales for the system. We believe that is very important, and while the core gamers... I know those are your readers, but while core gamers are important for being trendsetters, the breadth of the market says to us that we have to try to please not only the best of hardcore gamers, but also the casual gamers. We're trying to figure out what the right balance is there.
We believe games like Mario Kart: Double Dash!! and some of the other things we do so well really can cover the gamut of GameCube owners. Hardcore gamers can really enjoy them, but so can the casual gamers which, in terms of numbers, make up the majority of the market,

Quote:And I think one of the things that Mr. Iwata's trying to figure out is how the next system should look like, and how should we go out and research or test that.

Quote:Nintendo, though, generally measures their success in profit, not in how popular something is. No doubt online Nintendo games would be insanely popular, they would probably even get me to pay $50 a year and I never play games online, but Nintendo won't push ahead until they see a way for it to make money.