Nintendo's Reggie Fils-Aime on Motion Controls, Piracy, and the 3DS

At this year's E3 I sat down with Nintendo of America President and CEO Reggie Fils-Aime. What is the strategy behind the Nintendo 3DS? And what does he think about Sony and Microsoft getting into motion controls?

Reggie Fils-AimeKevin Ohannessian: What's your favorite thing at E3?

Reggie Fils-Aime: Other than my own products? As we're talking, I really haven't had a chance to walk around the entire show floor. I am looking forward to seeing Halo: Reach. I'm looking forward to spending time with some of our third-party publishers. What I enjoy is getting out and talking to people, versus getting my own hands-on, just to get an unbiased perspective on what's the buzz or what's the thing to see at the show. The stuff that people coming have been sharing with me have been more on the amusing side, shall I say, in terms of what they are seeing at our competitors' booths. Before I share those broadly, I want to see for myself.

Why has Nintendo gone 3-D with a handheld, the Nintendo 3DS. Why not go 3-D with the Wii?

Nintendo prides itself in being a technology-driven, mass-market, entertainment company. The fastest way to bring 3-D to consumers is to do it on a handheld. When a consumer purchases a handheld, they get everything they need. They get the screen, you're able to buy the software, have a range of different experiences. By the time the prices on 3-D television sets and the glasses come down to a mass market price, it will be some number of years in the future. So for us the way to innovate and to bring this to the consumer sooner rather than later, was to do it on a handheld.

Nintendo 3DS At your booth, the 3DS demo included augmented reality, the 3-D camera, and you mentioned the auto-downloading over Wi-Fi. With all of these things, will there be more apps and digital downloads like the DSi?

There are certain elements that will be built into the 3DS. And we're working through finalizing what that is. Something that takes advantage of the camera functionality could be a candidate of an application that is built into the hardware right at the start. So the consumer can have that experience right at the beginning. Certainly, we can anticipate digital download content, games as well as non-games. I can even anticipate down the road, where there can be some combination. You buy a game and the camera functionality ties into that--we have a game like that for DSi. Our view is that with all of the capabilities we are building into the hardware, it's going to allow these new fantastical experiences that will be tremendously entertaining for the consumer.

Piracy is an issue for handhelds. I wonder if the auto-updating Internet functionality of the Nintendo 3DS would have anything to do with fighting piracy.

[Reggie smirks.] It could. Pirates are a clever bunch. It's like playing whack-a-mole--as soon as you tighten one area, a new area opens up. The other thing that is challenging is, unfortunately, the more popular your devices are, the more attractive it becomes for the pirates. But again, the pirates themselves are the ones conducting illegal activity--against those people we will use the law, technology, and every means at our disposal to eradicate what they do. On the other hand, we are adamant that the consumer is really not a problem. The problem are the individuals who essentially on their own, trying to monetize our content.

Kid Icarus This year in particular, there were quite a number of past franchise coming back--Kirby, Donkey Kong, Kid Icarus--but you also continue your release of Wii-centric titles, like Wii Sports Resort. Can you speak to that strategy of appeasing hardcore Nintendo fans and releasing more approachable Wii games?

Our strategy is gaming for the masses. We want to bring this form of entertainment to as many consumers as possible. It is on one hand, a very focused strategy, but it is also one that for a company that only does gaming, it is about our future survival. As we bring content to consumers, we're fortunate in having all of these great, historical franchises, historical characters, that we can leverage. In addition, we're always looking to create new franchises. And for us, it really is balancing those two. And balancing the events and the opportunities to talk about these different products.

Legend of ZeldaGiven the media coverage, given who is actively seeking the information, E3 is predominantly an active-gamer type of environment. Where we have received past criticism it is that we haven't had enough content for this active gamer. Certainly we were more thoughtful this year, and making sure we brought content that would really excite this active gamer. But make no mistake, we know that an active gamer today at some point in the past was a casual gamer. And it's our responsibility to help bridge them along in their journey. That's why you see products like Wii Party. That's why you see products like Just Dance 2. Even the way we reimagined a franchise like Kirby. Yes, we know what our fans want, but how do we bring them that content, but bring a little bit extra so maybe they can share game with their parent, with their spouse, with a friend--someone who isn't yet enjoying this pastime that the gamer loves so much.

Kirby is yarn, it's fluffy. All of these things that make it easy to get into the games. You have to start with the content to be able to do that, but it also comes into how you market these games. That's one of the things we are trying to do with a franchise that historically has not been maybe as new-gamer oriented, Dragon Quest from Square Enix. Here is a franchise that they have worked hard in the West to try and grow. We see an opportunity with Dragon Quest IX to reach many, many more consumers. What you will see from us as we publish that game is some of the marketing, some of the ways we get our message out to the consumer to give this game a shot. We believe once they do, they'll get sucked into this fantastic content.

One of the biggest stories here at E3 this year is PlayStation Move and Microsoft's Kinect. How do you feel that your competitors are jumping into your ocean?

The consumer knows who is the innovator. The consumer knows who started active play four years ago now. Our challenge is how do we continue to bring active play to consumers in ways they have never seen it before. They enjoyed Wii Sports and Wii Sports Resort, how do we take that to a whole new level in a game like Zelda. Our competitors will do what they do, but for us, active play is core to our concept. Every single one of those 71 million Wiis that have been sold are active-play oriented. That's not true for the other consoles. For them, they have to figure out how to do it in a way that will make sense. Even today, Kinect's proposition, what you get for what you pay, is not completely communicated. So we'll see. But I think the consumer will ultimately decide.

Anything else you want to touch upon?

The other thing that bears mention is that in the handheld space it is easy to jump into the 3DS. It is important to understand until the 3DS launches, we are going to continue very strongly support our DS business. The fact that the Nintendo 3DS business is backwards compatible, incentivizes us to get as many new consumers into the core DS platform as possible. The fact that this one also has two cameras, this one is also going to have some kind of digital content, just means it is in our benefit to drive our existing business. Products like Mario vs. Donkey Kong, which is going to be our big handheld title for this holiday, it's important that we also give those products some focus.

You brought up the 3DS release. Speculation is that it will be early 2011, maybe something will come out of the Tokyo Game Show. What I am curious about is the price. You are going to say no comment to that, but I am curious if the new 3-D screen is more expensive than the current DS screen.

I'm not going to comment on component costing or anything else. What I will tell you is we said at the outset that we view this as a mass market product and so it's going to need mass market pricing. It's going to need a value equation that really attracts a broad base of consumers, versus one that prices it as a niche product. We are cognizant that we want to make this a product that price is not an objection on why to buy in.

For more with Reggie, read the E3 posts on Art in Gaming and Financial Threats to Games.

Stay tuned for more interviews from E3.

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