Nintendo has mentioned over the past year or so that it is trying to diversify its business so it can generate income from other sources than just video games. In the past they have mentioned mobile games, character licensing, movies, and theme parks as initiatives that will keep their stable of characters at the forefront of marketing and generate additional revenue.
It’s no secret that Nintendo used to have a stranglehold on the younger children market. By heavily targeting that segment of customers, Nintendo was rather successful at retaining many of them as they grew up with video games. However, times have drastically changed with smart devices becoming the gaming platform of choice and Nintendo not having any of its recognizable franchises front and center of kids’ eyes. They hope to rectify this by branching out into mobile and giving customers a taste of games that can only be found on Nintendo’s machines. Branching out into other media, such as television, movies, and theme parks will aid in introducing younger audiences to the characters and keep them front and center for everyone to enjoy.
That brings us to today’s meeting of the board of directors at Nintendo of Japan. In order to diversify its business strategy, Nintendo has proposed an amendment to its articles of incorporation to explain the new initiatives. This proposal will be voted on at the Annual General Meeting of Shareholders on June 29, 2016.
The new articles state what segments Nintendo will engage in. Many are unchanged, such as manufacturing and sale of playing cards, games, music, etc. The new areas are the most interesting as it tells us what to expect from the company in the coming years. In total there are four new initiatives:
- Development, manufacturing and sale of medical devices and health devices.
- Development, manufacturing and sale of computer software.
- Management of and investment in eating establishments, stores and entertainment sites.
- Licensing of intellectual property rights.
The health devices market isn’t too surprising given that Nintendo has dipped its toes in those waters before with Wii Fit. We also know they were working on items like the Vitality Sensor for the Wii and Quality of Life initiatives that have been put on hold for the time being.
Computer software development is a bit surprising, but perhaps they consider creating apps like Miitomo and the upcoming smart device games as computer software. I’d be surprised to see full games come to the PC market, but stranger things have happened.
Eating establishments are new to the list and an exciting proposition. This might be aimed primarily at Japan where small places to eat often open up based on video game properties. There have been Dragon Quest and Monster Hunter-themed restaurants in the past in that country, so maybe Nintendo will be joining the fray. This could also apply to its upcoming deal with Universal Studios theme parks. I imagine a Mario’s Pizzeria or a Shy Guys’ Burgers & Fries could be in the works.
The licensing of intellectual properties is a no-brainer, especially when it comes to merchandising, movies, TV, and more. In fact, I’m kind of surprised it wasn’t part of the business plan before.
It looks like Nintendo has a lot on its plate for the next few years. In addition to mobile device gaming, the NX is supposed to launch in March of 2017, and dabbling into movies and theme parks is not an easy task. Let’s hope they’re up to the challenge and are vastly successful in their endeavors.