IGN - Nintendo's digital growing, nearly 100% connection rate in NA, franchise digital sales

A portion of an IGN interview with Reggie Fils-Aime...

IGN: Let’s talk about your retail and digital business. Are people mostly getting their Nintendo games through retailers or are they downloading them? How different are they numbers between the two platforms?

Fils-Aime: Here are a number of points. First, our digital business is growing very strongly. That’s because the content that we offer in our eShop goes beyond simply what you can get at retail. Yes, we have what we call dual-distribution titles. These games are sold through the eShop and retail. But we also have Virtual Console, which is content you could only get through the eShop. And we also have content specifically designed for the eShop that you can’t get anywhere else. That combination has created a very effective, growing business for us.

Second point: both the Wii U and 3DS, in the Americas, are effectively 100% connected devices, meaning the consumer has setup a [Nintendo Network ID]. They connect to a Wi-Fi network. For us, that’s a very effective means of not only driving our eShop business, but also driving a number of other ways we connect with our consumer. GamePad alerts are one example. The level of connectivity is the strongest in the Americas. That’s something that, from a business standpoint, we can drive very effectively here.

The third point is that the actual sell through of physical versus digital really depends on the game. Let me give you two examples. A very large percent of Animal Crossing, and in that same genre Tomodachi Life, sold digitally. Why is that? Well these are games that the consumer wants to always have with them. They want the five to ten minute opportunities to open it up, visit the island, and do something fun. They don’t want to deal with swapping out game cards. It’s a very quick experience.

On the other hand you have games like Super Smash Bros. The Smash Bros. player does not want to invest literally 100-plus hours and, even in the back of their mind have a sense that something might go wrong and lose the time invested. Not that it would happen, because our systems are very robust. But what I’m talking about is what’s going on in the minds of that consumer. And so the digital percent for Smash Bros. both on Wii U and 3DS is lower than average.

We’ve learned that it is game-by-game how the digital percent equates. We’ve gotten to a point where we can estimate pretty effectively what that mix is gonna be.

IGN: Could you go into more detail? What’s the percentage for games like Animal Crossing and Tomodachi Life versus Smash Bros.?

Fils-Aime: If you look at our annual report, it shows the progression of our digital business. If you do the math, roughly, it shows that digital revenue is about 20% of the total. So 20% is the average. Animal Crossing, for example, is north of 30%. A game like Smash Bros. is less than 15%.