Nintendo Australia has experienced considerable revenue growth over the past year with the success of its Wii console, but will continue to defend its market share from rivals Sony and Microsoft, managing director Rose Lappin says.
The company is currently enjoying strong sales, with revenue increasing from $370 million to $646.8 million in the 12 months ending in March – a jump of 136%.Net profit jumped to $41.6 million, compared to net profit of just $2.1 million in March 2006, before it launched its popular Wii console.
Lappin says the company has enough momentum in upcoming games material to keep its existing customer base loyal to the Nintendo brand.
“There’s absolutely no guarantees in life for any business, and I think it’s important that we keep that going. We have a very good lineup of games continuing to come out this year, with Wii Sports Resort and a new Mario game,” she says.
“Since we launched Wii we’ve had an upturn, and coming off GameCube that was always great. Wii Fit is just one year old and is still sitting on number one. Mario Kart has continued to perform, so we’ve had some really good games.”
Nintendo experienced some difficult times after the release of its GameCube console in 2001, which was rivalled by the Microsoft Xbox and the Playstation 2, the latter being the highest-selling console of all time.
Nintendo was also criticised for focusing on games geared towards younger users, and for lacking mature titles seen on the rival Xbox and Playstation consoles.
But Lappin says the key to the Wii’s success has been offering products to a wide range of gamers, including people who have never used a video game console before. The company’s Wii console controller has been praised for being easy to use, requiring just hand motions to control on-screen action.
“Part of it is the downturn, with people spending more time at home. Additionally, the social gaming aspect is important, and so all of these are multiplayer games that will get more people involved. They see friends playing, then they want to try.”
“People who have never played games are playing now. So I think these new games have certainly helped, rather than just selling to the existing gaming community who have bought Nintendo all along. Although we obviously still appreciate that market.”
Lappin also says the company is not too concerned with recent developments from Sony and Microsoft, both of which displayed motion sensor controls at the recent E3 Expo in California.
“If someone copies what you’re doing, you’ve got to feel pretty proud of that. Besides, they’re not talking about those things now, they’re talking about bringing them in the future. We’ve got plans for this year, and in any case, you can be sure that there’s new development happening in our camp as there always is with technology.”
Lappin also says pricing cuts are not on the agenda “at this stage”, but the company will continue to bring in new customers through an expanded market, and marketing the Wii as a social activity.
“People are more conscious about money at the moment, and they want to have fun with friends and family. Rather than go to the pictures, which may cost upwards of $50, they’ll stay home and play on their console, which will give them hours of entertainment.”
Recent figures from IBISWorld show the video games sector has grown at 16% per year over the past five years, and recorded 29.2% growth during the 2008-09 financial year. The firm says the growth has been caused by companies expanding into new audiences, such as middle-aged gamers and women.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
