There will be games that will be enhanced by the Wii Motion Plus as well as games that can only be played with it. Users will need four if they have four controllers, but we're going to try to offer it for as little as possible. We haven't announced the price yet, but the cost of making the Wii Motion Plus is not that much, so I think we can make it very affordable.

Iwata also says that, despite my theory on accessories and the Wii, Nintendo doesn't plan to release a whole lot more for their console.

Iwata also goes on to talk about their next console.

Mr. Iwata: The hardware team started work on the next thing as soon as they were done with their previous project, but what they think up doesn't necessarily become a product. We only turn something into a product after it's been thoroughly vetted inside the company. We're not at a point where we can give specifics, but of course we're working on it.

I see Nintendo riding the Wii wave for quite a long time, what with those developing countries to still tackle.

Keeping Up Nintendo's Momentum [Wall Street Journal]

After we complete our mission in developed countries, then we'll have to start thinking about how to make our products appealing in developing countries. We'll have a whole new dimension of issues to tackle like pricing, quantity availability and regional adaptation. We're not going to meet our goals that easily.

In other words, take over the world. Satoru Iwata: part-time Nintendo president, full-time Bond villain.

Keeping Up Nintendo's Momentum [WSJ]

I was lucky everything worked so quickly. For the longest time I wasn't sure what would happen first: that we'd see success with the new console, or that I'd be fired.

Satoru, someone with your qualifications would have no trouble finding a top-flight job in either the food service or housekeeping industries.

"Wir verstehen, dass die Leute enttäuscht sind" [Spiegel, via CVG]

If there is any perception that Nintendo is ignoring the core gamers, it's a misunderstanding and we really want to get rid of that misunderstanding by any means. We are sorry about [the E3] media briefings, specifically for those who were expecting to see Nintendo show something about 'Super Mario' or 'Legend of Zelda.'

"Sorry" is a strong, and surprisingly powerful word to pull out. Probably won't do anything to sooth the strained neck veins of the outraged faithful, but it's a nice gesture regardless.

A Wii Bit Short On Supplies [Forbes]

First of all, I don't think the current system we have with friend codes is perfect. However, if it's an online world where you can get access to anybody without any restrictions, I as a father do not feel like allowing my daughter be engaged in that kind of world. So for Nintendo, especially in terms of the people who have never experienced online video games before, we think that it's still very important to create a world where we can assure that there will be no harassment for these online beginners, and we really want to assure the security and safety for them to do that. So we will be studying this on an ongoing basis in order to improve Nintendo's own circumstances where people can freely and safely enjoy the communications through the net.

Quick show of hands. Who likes friend codes? Okay, who tolerates them? And, who hates them? Nintendo is doing its best to make sure that its online service is friendly to all players, and the company should be commended for that. (Think of the children!)

Interview: Satoru Iwata Talks [GameDaily via CVG]

Nintendo confirms E3 speakers [CVG] [Pic]

Nintendo Holds off on Wii DVD [IGN]

Iwata Asks: Link's Crossbow Training [Nintendo]

Innovating on that console is the key, Iwata explains. And if Nintendo can keep beating others to the punch on new ways to play new games, it will do just fine.

"What matters to us is whether or not we can continue to constantly create and offer new surprises one after another. If we can, then (other company's attempt to launch Wii Remote-like controller) should not be a big threat.

The efforts in this field to try to appeal to a wide variety of customers are something in which we saw potential early on and that we have been working on the longest, so there appears to be no reason whatsoever why we need to be concerned."

Iwata says that the video game space can be a risky place for new entrants — sure, no argument. But Microsoft is hardly some art-house developer looking for a break, and it's shown enormous tolerance for losing money here, too.

Still The $64,000 question here is more for Microsoft than Nintendo. Microsoft probably wants to use an "Xmote" to unify casual and hardcore gamers into buying a 360. Perhaps Sony thought the same thing too, and the SIXAXIS has gotten absolutely nowhere as an innovation on the PS3, where it is optional, not integral, to gaming.

Of course you can use a Wiimote for a driving game more serious than Mario Kart, but gamers have gotten by just fine without one. And there's such an orthdoxy to FPS controls now, I'm not sure it makes much difference. So, yes, a controller by itself means little. The titles that are written specifically for it, that is where the threat lies, and its something no one can estimate just yet.

Iwata Not Threatened by Rumored Xbox 360 Wiimote Clone [QJ.Net, thanks to El Cernex]

To Nintendo, licensing Mii is identical to licensing Mario. If you read Iwata Asks interview series in website, you can understand how Mii was created in detail, so I hope you can read them if you have time. Mii is actually the result of more than 10 years of efforts.

Mr. Miyamoto, the inventor of Mii, himself has been saying that, 'In a sense, licensing Mii is same as licensing Mario — Nintendo should grant the license when we can conclude that the proposed project is worthwhile. Should we allow any and all the licensees to use Mii license for whichever projects, Mii's brand image will be hurt. Because we are not granting Mario license to any and all, we should not do so with Mii either.'

This is the current policy of Nintendo. So, at the software development stage, we are consulting with the developers as to how they would like to make use of Mii, and our Licensing Department handles on a case-by-case basis.

"Because this small number of people are none other than the most avid players," Iwata said "we know we have to review the best possible solution to eliminate their inconvenience." USB hard drive support? That'd be nice! For more details from Iwata's Q&A, hit the jump.

With little in the way of announced titles from Nintendo themselves on the horizon, Iwata addressed concerns that the software well was dry. In short, expect Nintendo to keep its cards even closer to its chest.

Of course, we are preparing for a variety of software for the latter half of this year. However, we are now feeling that the speed at which new information is consumed and made obsolete has become quicker than ever. When I think of today's situation as a consumer, when I am exposed to new information too early on, I find that I am already tired of it when the product is launched. This is one of the reasons why we would like to keep news at bay until we really have to disclose them.

On the DS front, Iwata hints that we can expect more "public spaces" functionality from the handheld, also indicating that Nintendo has plans to generate some cash from said functions.

At the same time, we think it is necessary to increase the number of places where you can feel it more advantageous to bring your DS with you. This is a concept behind our idea of using DS in public spaces. Of course, we are not forgetting to consider it from a revenue source perspective, and they may be able to actually contribute to our financial results sometime in the future.

Iwata also reiterated that there are no plans for a price cut on the Wii, going as far to indicate that the business model is flawed.

If it is predetermined that the hardware price shall gradually decrease, then that model reiterates the notion that early purchasers will suffer a loss, which I do not believe is the right business model. I believe that something must be wrong if we conduct our business with the premise that we will need to cut prices of our hardware as time goes on.

The entire thing may not be worth a read for everyone, but if you're hungry for Iwata knowledge, many questions and answers await you. The man is as smart as a whip, plus his translations are so polite, it borders on rude not to read.

Financial Results Briefing Q&A [Nintendo Japan]

Several months have passed, and the seventh version has been released. Sony still clocks in at 7.3/10, but has more products that are toxic PVC free and has improved its recycling and takeback of electronics. Microsoft has jumped up to 4.7/10 and has an improved timeline for toxic chemicals elimination. The company's takeback policy is still lacking, though. And Nintendo? The company now scores 0.3/10. Says Greenpeace, "Tiny improvement but still way behind." Hey Greenpeace, Nintendo doesn't have time for all this environmental crap! Too busy making buckets of money.
March 2008 Version [Greenpeace Thanks Bert!]

Miyamoto-san gets pretty scary when he's angry, doesn't he?

Miyamoto-san is really merciless when it comes to planning! (laughs)

Miyamoto: The make-up of the Wii Fit team was really varied. The design and sound staff, for example, were brought in directly from Twilight Princess. I was a little afraid at first that a group of people who'd worked on something like that wouldn't take a completely atypical project like this as seriously, but in the end I had nothing to worry about because they all worked very hard on Wii Fit.

Iwata: No one would say, "I didn't join Nintendo just so I could work on something like this."

Miyamoto: Instead of just handing the game over to a team of novice designers because of the game's relatively simple look, I decided that the nature of the game itself required the kind of people who've worked on games such as Twilight Princess. That's why the team members were all really experienced people, and I'm really grateful that they all worked together to create this great game.

The Wii Balance Board [Nintendo]

He even waxes a bit about WiiWare pricing, putting a (surely tentative) price tag on WiiWare games of 500 yen (about $4.70 US). The price of a NES game? I could get behind that. Iwata has plenty more to say.

He goes on to tell GameSpot that Nintendo has no plans to enter the MMO space, saying that Miis are good enough for now and that "The virtual-world services out there now still aren't at a place where we'd like to join in—and certainly not to the point that we'd want to jump into competition with everybody else."

And for those of you without a Wii, not for a lack of trying, Iwata explains why they're still in such short supply, nearly 16 months after launch. Simply put, production couldn't keep up with demand. "This is a result of not being able to build up stock at all over the summer due to the consistently active demand for the Wii throughout the year," he says, adding that the company expects to finally target new markets this year, while ensuring a production ramp up.

There's plenty more from Iwata at GameSpot, so do read on.

Q&A: Nintendo's Satoru Iwata [Gamespot]

An astounding amount of effort was actually put into the fundamental development process of these titles [Wii Sports and Wii Fit]. We're investing our efforts in other areas besides graphics and data capacity. However, as I mentioned earlier, if all our games mirror games like Wii Sports or Wii Fit, our gamers would soon grow bored.

You may (or may not) remember Game Arts from its development on the Lunar and Grandia series, both quite aged, both essentially the opposite of a lightning fast, multiplayer fighting game. Why the secrecy? It couldn't have anything to do with the overreaction found on the internet. Could it? Nah. The full interview, if you missed it before, is worth the read.

Iwata Asks: Super Smash Bros. Brawl [Wii.com]

Hello, Everyone. My name is Satoru Iwata, President of Nintendo Co., Ltd. Beginning today, I would like to deliver an interview that explains the vision and the development process behind the creation of Super Smash Bros. Brawl. But before we begin, I would like to offer an apology.

With the completion of the game falling behind schedule, we were unable to keep our promised release date, despite our greatest efforts in attempting to release this game on time. I would like to extend my most sincere apology to all of our customers that are anticipating the title's release, and also to our retailers.

SURPRISE "To say 'we expected it to sell' would be vain. If we had known the Wii and DS would expand so dramatically in such a short time, we wouldn't have had shortages, nor would we have had to raise our financial forecasts."

SADNESS
"[When I see articles saying forced shortages are part of our strategy], I honestly feel sad. Game machine production amounts are set about half a year in advance, so they cannot be easily changed. The concept of the Wii is 'a machine that makes people who play it smile.' We wouldn't use a strategy that is at odds with smiling. Getting as many people as possible to show us their smiles when playing a Nintendo game — that's the energy source that drives us."

BORED
"Things grow bad the moment they're left in the same position. In particular, people can grow tired of entertainment such as games, so in order to make sure the consumers who took up the DS and Wii don't loose interest, new ideas like Wii Fit will become essential from here on out."

POSITIVE
"I am super positive. In this business (being a company president) if you're not positive, you'll immediately get weakened and won't be able to continue. Also, if I didn't have a positive outlook, I definitely wouldn't be able to say something like 'expand the gaming population.'"

JOKING
"This year we will release a new system. That is, of course, a joke. Our goal is to show our 'answer' to how to make sure the game population that has increased through the Wii and DS doesn't end as a short-lived boom. Even with the DS, there are still things left to do."

"It is not a correct observation that we are having any trouble deciding on the launch timing of the next hardware," Iwata said, adding "Simply, we are not suffering from the shortage of new ideas for DS."

Iwata clarifies that Nintendo's hardware and software teams are working together to determine when to upgrade or replace the DS, noting that they're looking to identify the "sweet spot" of future technology. He said that talk of a new portable machine at the Nintendo conference earlier this month was way off base, telling attendees "we never had that kind of notion in the first place."

The full response can be read at the Q&A below.

Corporate Management Briefing and Financial Results Q&A [Nintendo]

...a television-programming feature for the Japanese market...[allowing users] to check television listings, run searches by keyword and genre, and highlight each family member's favorite programs.

Iwata also points out that the DS is already being tested in some museums and other public places in Japan to provide additional information to users, but for Nintendo to expect us to open the DS to get data at the drop of a hat, it's gotta give us information everywhere. And without functionality like mobile data transfer or GPS, we can't imagine that happening.

But maybe at the DS hardware continues to evolve...who knows? Here's hoping there's more coming than when Japan can catch dubbed reruns of Full House.

Nintendo Sets Game Plan to Keep Players (sub required) [via N4G]

Iwata tells Itoi "Our mission is to surprise people in a good way, and this became very clear as we made Nintendo DS and Wii. You can't open up a new market of customers if you can't surprise them." That may be good news for fans of originality, but Iwata brings a scrap of bad news for gamers salivating for Wii Sports II. A sequel, he says, is "definitely not coming out soon."

More of the Iwata versus Itoi rap session at Hobo Nikkan Itoi Shinbun.

Don't Do The Easy [Hobo Nikkan Itoi Shinbun]

Following the release of the company's yearly financial results, Iwata told the gathered crowd that while in-house development teams have 124 projects spread across the console and portable platforms, not all of them will see release.

Guess that means no Wii drought, eh?

While we know a handful of the 79 titles already in development for the Nintendo DS, many of those are likely never to make it outside of Japan, as is currently the case with bestselling software like Kanji Training, Cooking Navi and English Training. Still to be released DS software includes North American release confirmed titles Chibi Robo: Park Patrol, The Legend of Zelda: Phantom Hourglass and DS Air.

On the Wii front, we have a better idea what to expect over the next year or two. The list of currently confirmed and rumored future Wii software includes:

1. Big Brain Academy: Wii Degree
2. Mario Party 8
3. Pokemon Battle Revolution
4. Mario Strikers Charged
5. DK Bongo Blast
6. Super Mario Galaxy
7. Battalion Wars 2
8. Disaster: Day of Crisis
9. Project H.A.M.M.E.R.
10. Super Smash Bros. Brawl
11. Metroid Prime 3 Corruption
12. Wii Health
13. Wii Music
14. Mario & Sonic At The Olympics
15. Animal Crossing Wii
16. Forever Blue
17. Wii Motor Sports
18. The Legend of Zelda Wii
19. Fire Emblem Wii
20. Yoshi's Island Wii

Nintendo still has yet to announce Wii versions of successful series such as Pikmin, Wave Race, Nintendogs, Chibi Robo, Kirby, F-Zero, Pilotwings and Starfox. Add the typical Mario sports entries—golf, baseball, basketball—and there are still many possibilities for first-party projects.

Just to be on the safe side, I'll put money on those unannounced games to be Mario Party 9, Mario Party 10, Mario Party 11, Mario Party 12, Mario Party 13, Mario Party 14, Mario Party 15, Mario Party 16, Mario Party 17, Mario Party 18, Mario Party 19, Mario Party 20, Mario Party 21, Mario Party 22, Mario Party 23, Mario Party 24, Mario Party 25, Mario Party 26, and Mario Party 27. Michael McWhertor

Nintendo Develops 45 New Games for Wii, 79 Titles for DS Player [Bloomberg]

Being popular is tough! Today at a Tokyo briefing, Nintendo prez. Satoru Iwata promised that Nintendo was doing everything possible to get increased Wii hardware on shelves. Said Iwata:

We must do our best to fix this abnormal lack of stock. We have not been able to properly foresee demand.

While Iwata did not disclose the Wii's production capacity, he did announce that 2.5 million DSes were being produced monthly in order to meet the insane demand. That's the highest production for Nintendo hardware. Ever. Forecasts for this year include selling loads of games, consoles and making a shit load of money. Brian Ashcraft

Nintendo Increase Wii Production [Famitsu]
AP Story [Houston Chronicle via Game Industry]

It's all fairly familiar stuff, but some interesting revelations are contained within. According to Business 2.0, Nintendo is making $50 profit on each Wii sold and Nintendo president Satoru Iwata was the driving force behind the console's petite footprint.

Will Nintendo be able to keep the love train rolling? I'll put a dollar on "yes." However, they'd better get more Wiis in store soon to properly capitalize on the public's warm and fuzzy feelings. Michael McWhertor

How the Wii is creaming the competition [Business 2.0 @ CNN Money]

The tee features a sweet Mii parade on the back, with three key Nintendo execs on the front. From left, there's Satoru Iwata, Shigeru Miyamoto and Reggie Fils-Aime. He's kicking ass just out of frame.

Detail and one more Nintendo exec Mii-ified after the jump.

Aaaaah! It's kind of horrifying. And who's that on the back?

Why, it's George Harrison! I think. The whole thing is suspect. All those grown men hanging around with younger Miis. People will talk. Michael McWhertor

It should come as little surprise that Nintendo reported record profits today for the end of their third quarter, selling millions upon millions of things worldwide. What kind of things? How about 3.19 million Wiis? Would you believe 1.5 million Virtual Console games? Can I possibly impress you with nineteen Nintendo published titles that sold more than a million copies in nine months?

With the exception of some 800,000 Wiis that didn't make it into gamers hands before the end of the year, it's good news all around for the company cruising the unchartered waters of gaming's Blue Ocean. Net sales are up, operating income is up, Wiis are reselling old NES games to people who already own them for five bucks a pop, DSes continue to print money, and people are still buying Game Boys.

Not mentioned in the report were plans for Satoru Iwata to complete the gold plating of his home office or when Shigeru Miyamoto will have the diamond encrusting redone on his bicycle. With all that cash flying around, it seems strange that both men are still getting 1000 yen haircuts. It is a mystery!

Full release after the jump. Michael McWhertor

Nintendo 3Q Consolidated Financial Results

Nintendo Co., Ltd. today announced that strong sales of Nintendo DS hardware and software and the successful launch of Wii have led to record consolidated sales and operational profit for the nine-month period ending Dec. 31, 2006 (*see attached). Recurring and net profits also set record highs. Nintendo maintains projections for record financial results through its fiscal year, which ends March 31, 2007.

Thanks to extremely strong Nintendo DS sales and the successful launch of Wii, Nintendo's consolidated net sales were up 72.8 percent over the same nine-month period last year, and operating income was up 102.5 percent.

Nintendo also announced:
During the first nine months of the current fiscal year, consolidated worldwide shipments of 19 software titles for Nintendo platforms reached or surpassed 1 million units. These include three Wii titles, 13 Nintendo DS titles and three Game Boy Advance titles.
Nearly 1.4 million Wii hardware systems have connected to the Internet worldwide (as of 1/24/07)
Approximately 1.5 million Virtual Console games have been downloaded and sold to customers worldwide (as of 1/24/07)
More than 3.5 million unique users have enjoyed game play on Nintendo Wi-Fi Connection for Nintendo DS, with far more than 100 million connections (as of 1/24/07)

The company held firm to its previous forecast for consolidated worldwide shipments of 6 million Wii hardware systems by the end of the fiscal year. Nintendo manufactured 4 million Wii systems by the end of 2006 and during that time sold and delivered 3.19 million to its distributors and retail customers around the world.

In a quote so bizarre it could only have come out of the president of a major video game company, Satoru Iwata told Bloomberg:

We want to appeal to mothers who don't want consoles in their living rooms, and to the elderly and to young women. It's a challenge, like trying to sell cosmetics to men.

In other words, if you're looking forward to the Wii, Nintendo looks at you as the demographic equivalent of a transvestite. Florian Eckhardt

Wii is "Like Selling Make-Up to Men" Says Iwata [Next Generation]

For anyone who's ever had to the burning urge to fill notebooks with Nintendo President Satoru doodles, game site Go Nintendo points out how. Neat, but does anyone know how to draw Sony Computer Entertainment honcho Ken Kutaragi? Brian Ashcraft

More Here [Go Nintendo]

Seems like this one got under our radar for a while, but there's a fabulous interview up on Japanese tech site TechOn! with Nintendo CEO Satoru Iwata. Iwata talks about the strange little Wiimote, the lack of emphasis on better graphics, and the Wii's obsession with pure, unadulterated fun.

My favorite bit was the following quote, which seems to offer hope for the indie game developers currently being largely ignored by the market:

When creating a packaged game to be priced at 5,000 yen, developers tend to feel the need to create a rich game. Yet it is possible to create a reasonably entertaining game in 2 months with a team of three. By offering an environment that allows this, we hope to encourage more developers to pursue basic yet enjoyable gameplay.

And that means smaller developers, even independent developers, could create wee games and release them to a massive marketplace. This, dear readers, makes me smile like some sort of a smiling thing. Eliza Gauger

Go read the rest of this interview. [TechOn!]

The biggest crowd pleaser of all the pre-E3 press conferences so far has been Nintendo showing off their Wii tennis game in a pairs match: Nintendo's Reggie Fils-Aime and Satoru Iwata on one side, Shigeru Miyamoto and Wii First Test winner and current object of our boiling jealousy Scott Dyer on the other. Who do you think has got better form: Iwata-san or Shiggy? (Even if you give it to Shiggy, you've to admit no one makes being a corporate suit look like more fun than Iwata-san.)

On a whim I decided to check with the Nintendo PR peeps to see if they happened to have the full speech sitting around in text form.. don't laugh, they did.

So here you go, the exact speech Iwata was reading from at the GDC. Plenty long but also plenty of goodies.

2006 GDC KEYNOTE ADDRESS

Thank you so much for giving me the honor of speaking before you again this year. In my job, I have to talk to a lot of people, but as you all know, since I

still have the heart of a gamer, I have the most fun talking to you!

Once upon a time, way back in the 1980's, a company became number one because its products meant 'fun' to young people. Then, in the 1990's, a bigger company with a bigger brand name and bigger budgets took away the number one spot.

Fortunately, that first company also had another line of products that let it remain popular and profitable. This company used that threat to reconsider its strategy, and think how it could regain overall leadership. And this is what it decided. It would redefine its own business, and expand its market beyond current core users. Could this strategy work?

Well, we already know the answer. The answer is yes.

Because that first company, Pepsi, has returned to number one in its industry displacing Coke. Pepsi stopped asking, 'How can we sell more cola?' Instead, it started asking, 'What else do people want to drink?'

Today, Pepsi is number one in bottled water. It is number one in sports drinks.

It is number one in health drinks. And, of course, it remains number one in the snacks business that it used to maintain profitability while they executed their disruptive strategy. (As every game developer understands, the three basic food groups are Fritos, Cheetos and Doritos.)

I am here today to share some stories about Nintendo. But, I begin with a story about Pepsi because it demonstrates how thinking differently, and holding strongly to your strategy, can disrupt an entire industry ' and in a good way.

For some time, we have believed the game industry is ready for disruption.

Not just from Nintendo, but from all game developers. It is what we all need to expand our audience. It is what we all need to expand our imaginations.

Several years ago, when I began talking about reaching out to casual gamers and non-gamers, few people listened. Today, Nintendo DS is succeeding in disrupting the handheld market in fact, you could attribute most industry growth last year to just this one product line. Now, people are listening more closely.

I know many of you smiled when we demonstrated Nintendogs at the GDC last year, but I'm sure not many of you believed it could sell 6 million copies around the world in less than a year. But the success of DS is not based on just one game; it is the story of several new kinds of software creating brand new players.

Let me explain how disruption is working for us. Most of you are very familiar with the American market, so let me share some information about Japan. When it launched in 2001, Playstation 2 sold 6 million units in its first 21 months. Soon after, our Game Boy Advance did even better, reaching 6 million in 20 months. But Nintendo DS is selling at a much faster pace than any game system in Japanese history. We have reached sales of 6 million systems in just 14 months. And, this number would be far higher if production could keep up with demand.

In part, the DS success is due to how we redefine better technology with unique hardware features. But more importantly, the disruption of Nintendo DS comes from how software takes advantage of the hardware.

Over the last year, no software has created more discussion (or more surprise) than our 'brain' games. The first brain training game, which launched 10 months ago, has sold 1.97 million units. The second brain training game, which only launched the last week of last year, has already sold over 1.8 million units.

I have been asked many times how we decided to develop these games so I thought maybe this is the first story I should share with you today.

Where did this idea come from? I'm sure you can guess, it started where all great creative ideas begin... from a board of directors!

When Atsushi Asada was a member of our Executive Committee, he complained that he knew no one his age who played video games. Because Japan is an aging society, he thought a game designed just for seniors might work.

I agreed it was a good start, but I said it might be a mistake to target only seniors. Instead, maybe something that would appeal to other users, as well.

This meeting occurred just after the E3 show two years ago ' a very busy time for us. We were finalizing the Nintendo DS hardware, as well as preparing DS launch games. Even so, I asked each of our four main development groups to nominate a few people to serve on a task force.

Some of them did not have much experience making games, so I got to play the role of professor, talking to them not just about games, but about overall product planning. The goal of the task force was to invent a game whose appeal would include everyone from youngsters to baby boomers to seniors.

Our early meetings were just brainstorms and didn't produce any solid ideas. But at that time, people in Japan were beginning to read a new book and do its brain exercises. I noticed this, and thought it might be a good game idea.
Even Mr. Mori, our chief financial officer, was doing the exercises himself and convinced me to go forward. Then I consulted with Mr. Miyamoto, and when he got excited, too, I asked the task force to tackle the job.

Several of them said that just exercising your brain might not be enough. Could there be a way for players to measure a 'brain age?' I thought this was a great idea. People would be eager to compare their scores. But in fact, no work at all could begin until we came to agreement with the author, Dr. Ryuta Kawashima.

Since we were both about the same age, I decided to try to meet with him myself. His schedule was very busy, but he agreed he could find just one hour on just one day... the very day that the DS was launching in Japan. Not only was his university a long distance from our offices, but the meeting itself lasted not one hour, but three.

We showed him a prototype brain training software and explained how his work might translate to our medium. He was enthused, and we started exchanging ideas. The doctor offered to demonstrate evidence on how the prototype software was stimulating brain activity.

He asked if he could borrow one of the team members I had brought along from Nintendo. I said, 'Certainly'.

You might find this unbelievable, but his assistant then entered with something that looked like a metal bowl with wires attached to it, and then he turned it upside down, and placed it on my team member's head. It looked like a sci-fi movie from the 1950's.

The doctor showed that he could determine that the prototype game was changing the amount of blood moving across the surface of the brain. This was an important moment for all of us.

I'm sure some people at Nintendo wondered how I could spend so much time on the kind of meeting on the very day of the DS launch, but I think it turned out to be a good idea.

Meanwhile, back at Nintendo, we also benefited from some good timing.

Internally, we have one team we call the 'Development Environmental Group'. They had just finished a library of tools for voice and sound recognition for DS.

Simultaneously, work on hand-writing recognition was also in progress. When they began this work, we all thought these functions would be useful for the DS someday, but we had no real idea how. Then suddenly, it seemed to Mr. Miyamoto and me they would be a perfect match for this brain game.

By now, I admit I was getting very enthusiastic about the project. But at first, I don't remember that the development team felt quite the same way. I assembled a group of nine people and told them that since this wasn't a very complicated programming they should be able to finish the first game in just 90 days. And that included the year-end holiday period. I could tell they were not happy, but at least with such a short schedule, they couldn't waste much time complaining.

My bigger concern was how the market would react, beginning with retailers. Few people inside Nintendo believed they would place very big orders... the game was just too different from what they knew. Maybe it wasn't even a 'game' at all. So at this point, one member of the sales team suggested a new rule.

When our salesmen showed the software to retailers, even before business was discussed, the first 15 minutes of every meeting must be spent with the buyers trying the brain exercises themselves.

Oh, when they heard this, the retailers hated the idea! They were disgusted, but they had no choice. So they started playing, and we could only wait to see how they would react.

And how did they respond? Well, at this point I think I will take a risk and see if we can reproduce those first reactions right here on stage. In order to do that, I'd like to introduce Bill Trinen from Nintendo of America's localization team, a person who has spent months with Brain Age. He'll walk us through a demonstration, and invite a few friends.

[Bill Trinen, from Nintendo of America's localization team, demonstrated the unique game play of the new Nintendo DS game, Brain Age: Train Your Brain in Minutes a Day, among a group of volunteers]

Thank you Bill (Trinen), Will (Wright), Geoff (Keighley) and Jamil (Moledina).

I think we have now discovered people who are determined to improve their brain age! And of course, that is the secret appeal of this game.

Let me add one more note to this story. Those first retailers, after playing the first game, agreed to buy a total of 70,000 units, which was still more than

our domestic sales team expected, but I was not satisfied with that number. But between the launch of the first game and the second, you could see a disruption of the market occurring across Japan. Something had changed. New people were playing.

Seven months later, we returned with samples of the second Big Brain Academy game. This time, no demonstrations were needed. The retailers quickly placed orders for 850,000 units. And even that turned out not to be enough. It recorded the biggest first-week sales for any DS game ever.

As of right now, the three brain games, including Brain Flex, have sold more than five million copies in Japan alone. The moral of this story is pretty clear. If you want to succeed in game development, you need to follow two simple rules:

First, listen to your board of directors

And second, listen to your chief financial officer

The development of this game came from our belief that people wanted something new. In this case, that game took the form of a 'treadmill for the mind'.

But we also learned that the only real way to demonstrate the appeal of these games is to have people actually play them. At Nintendo in Japan, we had employees take the game home and show it to family and friends, especially people who weren't game players.

Quite a few of our employees were surprised that their parents and wives who would never show any interest in gaming were suddenly playing this everyday.

That helped to build buzz. So, I decided that the same thing might work here in America. And that the best time to start is right now.

So, when we're finished this morning, I thought you should test your own brain age to play yourself, and to show it to a friend or colleague or even your parents even if they have never played games.

So as you leave my keynote address, please take a copy of Brain Age with you as a gift from Nintendo. Please only take one, and understand that the games are only available to pick up when we finish today.

The second story I want to share with you involves disruption of a different sort not only taking a different approach to a new technology, but also finding a way to make it attractive to everyone and thereby expand the overall audience.

The topic was constructing the Nintendo Wi-Fi Connection.

Many of you know that we have been experimenting with networks since the 1980s. Back then, you could use your NES in Japan to trade stocks. We kept working, but never thought the time was right to introduce a game network until Nintendo DS.

In 2004, we began considering Wi-Fi gaming. From the start, we had several challenges. First, we knew that both Animal Crossing and Mario Kart would be arriving on the DS the next year, and we wanted them to feature Wi-Fi play. That made the development timetable very short.

Secondly, I insisted that our Wi-Fi interface be seamless. I wanted connecting to someone around the world to be as easy as connecting to someone playing next to you in the same room. As you know, this creates its own problems, because normally making things easier for players, makes things harder for developers.

But the most difficult aspect was deciding who players would be able to connect with. Online gaming normally belongs to the most aggressive players, and they can be a very vocal group. For the casual player, this kind of interaction can be very intimidating. I believed if we catered to only this very vocal group of hard-core players, we could never truly expand the audience.

Originally, we thought Wi-Fi should be set up as a kind of social network, almost a game-play version of MySpace. In Japan, we initially referred to the Wi-Fi system as 'project house party'. We had in mind the comfort of inviting friends over to play in your own home. Well, at Nintendo of America this name was not very popular. They told us that this sounded like what you call a 'tupperware party'. No matter what we called it, I believed the experience must be easy and fun.

What did I mean by 'easy?' It's simple to connect a game on DS locally when you're sitting in a room with your friends. It should be just as easy to find those friends and play with them even if they're thousands of miles away.

But what is 'fun?' That depends on the player. You may want to play Mario Kart only with people you know. Or you may find it more fun to try to defeat total strangers. Sometimes, the choice will be determined by the nature of the game. No one playing Animal Crossing wants someone to come in cut down all their trees and trash their town. What was important to me was that players have the choice, and the freedom to choose which way to play.

For developers, 'easy' and 'fun' doesn't mean the work will be 'easy' or 'fun'. There were many barriers to overcome. And my colleague, Mr. Takao Ohara, will share those stories with you later here at the GDC.

In the end, it is the freedom of choice, I believe, that has made the Nintendo Wi-Fi Connection so successful. To date, we have surpassed 1 million unique players, totaling more than 29 million play sessions ' and, this in only 18 weeks of availability.

We reached 1 million players almost five times as fast as the Xbox Live service, which also offered free connections when it began. It took them 20 months to reach 1 million different users. Of course, this has made our Wi-Fi development team very happy as you can see.

What you can't see is that sign they're holding up, a message to all of you. So let me show you what it said: We love the GDC. They all wanted to come, but I told them, 'Sorry, no'. But I did promise I would bring their picture.

As you know, this week we added a new wrinkle to the Nintendo Wi-Fi Connection. Voice over internet protocol arrived with Metroid Prime Hunters. It introduces a new level of fun.

At first, I thought you might like to see a Wi-Fi demonstration of the game.

But I know Wi-Fi is nothing new for you. In fact, I imagine many of you have already played Mario Kart DS wirelessly and seamlessly. Instead, I think the true appeal of the game is seen best if we hold our own four-player battle right up here on stage.

Again, I'd like to invite Bill Trinen to come back on stage to get the battle underway.

[Bill Trinen, from Nintendo of America's localization team, demonstrated the wireless game play capability of the Nintendo DS game, Metroid Prime Hunters, among a group of volunteers]

Thank you, everyone. I know I am much better watching this game than playing it.

When we talk about expanding the market to new players, many times this means new kinds of software, but certainly not always. I hope that Metroid Prime Hunters shows we're not turning our backs on the kind of games that current core players already love. We will serve all tastes.

Our new Tetris DS is something even your grandmother will enjoy. On the other hand, you can compete head to head with nine different people on a local network, or three others via Wi-Fi.

We are also going to bring our first all-new Super Mario Bros. game to the DS in a matter of a few weeks. For those of you who have been waiting for the next great Mario game'this is for you. And because you're all such game fans, I've decided to reveal one more brand new adventure for you today.

[The audience was shown a demo reel of the The Legend of Zelda: Phantom Hourglass]

The Legend of Zelda: Phantom Hourglass, is designed exclusively for the DS.

It will launch later this year. It's a product of Mr. Aonuma and the team that has created most of the Zelda hits in the past. You will be seeing and playing Zelda both on DS and Nintendo Gamecube at E3.

The third story I have to share is the answer to a question people ask me all the time: how did we get the idea for the Revolution free-hand controller?

Well, we started out with a very simple question: why is it that anyone feels comfortable picking up a remote control for a TV, but many people are afraid to even touch the controller for a video game system? This was our starting point.

Our first controller meetings began early in 2004, and from that initial thought we added two other requirements. First, the controller must be wireless. We need to give players freedom to move. And second, the look of the controller had to be simple and non-threatening. But of course, at the same time, it had to be sophisticated enough to serve the needs of complex games.

And yes, we also wanted it to be 'revolutionary'.

Finding an answer to all of this was not easy. For more than six months, two people at NCL did nothing but produce sketch after sketch with new ideas. Each sketch caused more discussion, and the discussions led us to create dozens of prototype designs. In all, about 15 people were involved trying to figure out an answer.

At the same time, I was considering technologies which would incorporate a direct pointing device, something that would show direct visual contact between the controller and the screen. In fact, many good ideas were floating around, but nothing yet felt revolutionary.

Early last year a young team leader of the controller development group came up with a disruptive idea: what if you could play with just one hand?

Mr. Miyamoto quickly imagined a small, simple, wireless device. That intrigued us, but we realized an immediate problem. Considering our plans, how would we allow backward compatibility to all the previous Nintendo games that required two-hand control?

Again, Mr. Miyamoto had an answer: make the small wireless controller detachable from a larger, traditional controller ' both using the same wireless interface.

This sounded good, but when we shared the idea with our Metroid Prime producers, they objected. They said their games would not work with what we invented.

They added another idea: Why not keep the simple one-hand controller, but also add a secondary device for the other hand if the game required it? ' Something like a nun-chuk device. We think this is something that will entirely change firstperson shooter games. By separately using the joystick device to control position and the direct pointing device to target enemies the experience truly feels more intuitive.

Now, we really went to work. There were dozens of models and prototypes fabricated until we came up with the final result. And what did it look like?

Well, it looked exactly like the same TV remote control that we first imagined more than a year earlier. Sometimes ideas are like good wine in that they just need time. After all the designs and mockups, we were happy with the final result. It met our goals. It was wireless. It was inviting to new players. It offered something brand new for core players. And, it was also a new interface we could offer to every player.

But, it also represented something else. As you can imagine, this was a very expensive process. Not only in terms of the research and development costs, but also the manufacturing expense of producing such an elaborate control system, and including it as part of every hardware purchase.

Some people put their money on the screen, but we decided to spend ours on the game experience. It is an investment in actual market disruption. Not simply

to improve the market ' but disrupt it. We believe a truly new kind of game entertainment will not be realized unless there is a new way to connect a player to his game.

'New' is good, but there also is an appetite for 'old'. For young players, classic games are brand new. For others, they are a way to feel young again.

After we announced the virtual console concept for revolution last year, many people asked me if only games for Nintendo systems would be available. Today, I have a better answer. I can announce that games specifically developed for both the Sega Genesis and the NEC Turbo Grafx system will also be available for Nintendo Revolution via the Virtual Console.

Between them, these systems built a library of more than a thousand different games. Of course, not all of them will be available, but the best of them will. Thank you for listening to my stories this morning. However, the most important story of all is still to be told. I hope all of you, the creative force of

our industry, will help us write it. It is the story of how disruption will help every one of us overcome the growing barriers to game development. We know what the main barrier is cost. There is one dominant business model for our industry. Publishers work backwards from a console game at retail that sells for $50 or now, even $60. To compete at that level, games must be longer, larger and more complex, which requires bigger development teams. Success is more likely if a strong license is acquired, but even then, huge amounts of money are needed to
market that game to a mass audience.

It's understandable that many publishers, in order to reduce risk, feel most comfortable relying on sequels to already successful, high budget games. As a result, our business is beginning to resemble a bookstore where you can only buy expensive, full sets of encyclopedias. No romance novels. No paperbacks. No magazines.

In our business, too often people with a fresh idea don't have a chance. I believe if Tetris were presented today, here is what the producer would be told:

'Go back'give me more levels'give me better graphics'give me cinematics'and you're probably going to need a movie license to sell that idea to the public'.

The producer would go away dejected. Today, Tetris might never be made.

Nintendo understands the dominant business model. We work with it every day. And future Zeldas and Marios and Metroids are going to be bigger masterpieces than ever before. But, this does not have to be the only business model. We want to help you create a new one. One where your simple Tetris will be made. With Nintendo Revolution, we offer a combination of opportunities that simply can't be matched. Our controller allows for every existing form of game to take on a new character. It allows for game creation that is not dependent on just the size of the development budget. I consider our virtual console concept the video game version of Apple's iTunes music store.

Since I first announced the virtual console concept last year at E3, other people have become very interested in digital downloads. Others will offer such a service, but it will not be the same. Because for us, this is not just a new business opportunity, for us, this is true innovation ' true disruption. It is part of our DNA.

The digital download process will bring new games to the widest possible audience of new players. Young people, older people, even those who never played video games before. When I think of what faces all of us right now, I imagine what it must have been like for the explorers who first set foot on a new continent. For them, it was impossible to imagine all the adventure that lay ahead.

Our adventure is still ahead of us. Nintendo is committed to creating an environment where all of your work can prosper. I began today saying that disruption is not just a strategy for Nintendo.

Yes, we have already disrupted handheld and it worked. Yes, we have already disrupted Wi-Fi ' and it worked. We disrupted the very definition of a "game" and that is working, too. In a few weeks, you will better understand how to disrupt console gaming. You will play, and you will see.

At Nintendo, we do not run from risk. We run to it. We are taking the risk to move beyond current boundaries. It should be our goal, each of us, to reach the

new players as well as the current players. Our goal is to show them surprise. Our reward is to convince them that above all video games are meant to be just one thing "fun."

Fun for everyone.

Thank you again so much for inviting me.