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Iwata on how Wii U could lead to better tie-in rates, margins

by rawmeatcowboy
13 June 2012
GN Version 4.0
I do think that we can improve profitability because with digital goods you avoid things like the cost of goods for media. You do not have the cost of shipping physical goods and you also can hold down inventory risks.

Additionally, as I explained in my discussion of “Miiverse,” historically speaking, our audience is one that has often been described as being a more casual audience, and it has been said that our tie ratio has been low compared to other companies. In order to cope with the situation that the tie ratio goes down without any measures, and by proposing special new opportunities (to recommend suitable games for each consumer to play next) in a natural way through the main menu screen, we will try to improve the tie ratio. This is our challenge to improve the profitability as well.

I also think that with what we’ve done to make the Wii U a device central to the living room will see a higher active use rate, and a higher active use rate for the Wii U system will also mean more opportunities to generate profit in other places. Of course I’m sure that there are people who wonder about the long-term ability to maintain the value of the software our consumers appreciate and maintain strong purchases going forward, and these are some of the different measures that we’re taking to try to ensure that we’re able to maintain higher profitability than before. - Satoru Iwata
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