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Iwata: Retail still has "competitive edge" over digital releases

Early adopters keen on WiiWare service, but company must do more to improve "only a gradual increase," of sales

Nintendo president Satoru Iwata has said that High Street retail still has the competitive edge over digital sales, and he doesn't expect a significant change to the way consumers purchase games in the near term.

Nintendo's WiiWare and DSiWare releases are efforts by the company to appeal to consumers who are keen to buy product online, but Iwata admitted that digital sales for the company have only seen a small increase since the initial launch of the services.

"Already today, a number of people are aware of and appreciate the convenience of online shopping," said Iwata during a recent conference call. "Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping.

"Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up any time soon."

Iwata acknowledged that sales of videogames via online services are likely to dominate in the long-term, but he does not believe consumer habits will change quickly in the more immediate future.

"If people ask such extreme question as, 'Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?', I will then have to answer, 'well, perhaps, the situation will be different.' However, if I am told, 'within a couple of years from today, there will be no retail outlets which will be selling packaged software,' my reaction must be, 'there's got to be something wrong with that assumption because I do not believe people's behaviours can change in such a short time,'" he said.

With digital sales of WiiWare titles, Nintendo has noticed that early adopters were keen on the service, but the company must do more to to reach consumers in the larger installed base, said Iwata.

"A number of early purchasers of new videogame hardware tend to be those who love something new on the market, so the net connection ratio can be high at the beginning, but if we do nothing about it, it can gradually go down as the hardware increases its installed base.

"In case of Nintendo platforms - because the company has been challenging itself with several measures - net connection ratios have gradually been increasing as time goes by. We are making efforts with the hope that it will someday reach and go beyond the tipping point. The current situation, however, is that we are observing only a gradual increase," he offered.

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Latest comments (3)

Ronan Price Assistant editor, Irish Independent12 years ago
Might Nintendo's poor online sales be anything to do with the fact the WiiWare and Virtual Console experience is rubbish? It's like wading through treacle for starters, but the UI is also crap.
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Dwain Hill12 years ago
Most "casual" gamers I know who have a Wii don't even know that they can buy games online from the shop channel :S
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Rupert Loman Founder & CEO, Gamer Network12 years ago
And the fact none of the local territories market the service it at all, because all the revenue goes straight back to Japan they have no incentive to...
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