Canada has more rabid fans per capita than U.S., says GM Pierre-Paul Trepanier.
Nintendo Canada Bounces Back:
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In his 12 years at Nintendo, Pierre-Paul Trepanier has seen a lot of ups and downs. From the disappointing years of the Gamecube console to the unabashed phenomenon that was the Wii and right back down to the currently underperforming Wii U, it’s been a veritable roller coaster ride for the new-ish general manager of Nintendo Canada.
Things are once again looking up for the venerable Japanese games company, with the portable 3DS business and the Wii U – released in 2012 – finally showing signs of life. Nintendo recently turned its first annual profit on the strength of some hit titles, including Mario Kart 8, and the Amiibo line of toys that connect to games.
The company is looking to continue the momentum with the release of its first big new game in some time, Splatoon, as well as a spate of new announcements set for the annual Electronic Entertainment Expo in Los Angeles next week.
Trepanier, a Quebec native, started his career at Nintendo 12 years ago. For most of that time, he headed up marketing for Nintendo of America, before moving back north last year to take the reins of the Canadian operation.
I chatted with him about what Nintendo does in Canada, the company’s unexpected rebound and the challenges the company continues to face. Here’s an edited version of that conversation.
What does Nintendo Canada do – are you strictly a sales office?
We’re a subsidiary of Nintendo of America, but we’re fully independent. We are mostly a sales and marketing organization for the Canadian marketplace, but we also handle service, support, accounting and finance for all those services. We handle all of the merchandising for Canada and the PR, corporate communications. Other than product development, we’re running a full publishing business here.
How does Canada differ from the other countries Nintendo operates in?
Nintendo Canada is much, much smaller. We might be one of the smallest subsidiaries, with 20-some people at the head office and 60-some people across the country, versus something like 1,200 in the U.S. We’re not involved in product development at all or in the management of licensing, so we don’t work with third-party software developers or even license merchandise goods like T-shirts and stuff like that. Most of what we do is focused on trying to communicate to Canadians how much fun Nintendo games are.
What’s different or unique about the Canadian market, either in terms of how you sell into it or from the consumption side? How do Canadian gamers react toward Nintendo that’s different?
I get asked that a lot because I spent time in both countries. On the consumer front, Canadians seem to prefer console gaming to portable gaming compared to the U.S., and very much so compared to other markets like Japan, where portable gaming is much bigger. Our Wii U momentum in Canada is slightly better (than the U.S.). Canadian gamers love getting together in the living room.
My hypothesis to explain this is there are more parents in Canada buying consoles and thinking of their kids as a priority, versus thinking of a console purchase as one for the adult gamer in the house. The reverse side of it is that we struggle a bit with portable gaming.
Another factor I’ve called out is that our Nintendo fans are louder and there are more of them on a per capita basis. We have an amazing fan base here that the team has managed to build. Call them info-seeking die-hard fans who have been playing for a long time, they’re really passionate. With traditional franchises like Zelda, Nintendo Canada seems to outperform versus other markets.
Also, consumers are more value conscious than in other markets. They’re a lot more price sensitive so when we work with our retail partners and put in price promotions, they react more in Canada than in other markets.
Canada has a wealth of game developers – why doesn’t Nintendo tap into them more?
I would love for us to do more in Canada for sure. There are some second-party projects that were developed in Canada, like Luigi’s Mansion: Dark Moon that launched last year for example. It was developed here in Vancouver. We still have those great, big third-party partners like Ubisoft who continue to invest in our platforms. In the next few weeks at E3 you’ll be hearing about more big third-party partnerships.
Beyond the big guys, as a gamer myself I’m more excited about the smaller indie games that are popping up. There are lots of partnerships in place with indie developers that are doing really well or are in the works for our platform, both on our 3DS platform and Wii U.
It’s just my interpretation of the market, but it seems like there has been a shift in development resources away from smart devices, which is a very crowded space right now, to the types of e-shops where discoverability is less of an issue and we can work together to make games like Shovel Knight and one of my favourites Guacamelee! to eventually become huge games.
I’m not sure I have any data to back that up, that’s just my sense. Speaking with friends in the industry, it feels like a few years ago there was such a move by indie developers to build apps and put them up in the smart device stores. But I think now there’s a sense that it’s a really crowded space and discoverability is a challenge.
Then again, we’re about to jump into that world.
What do you think about Nintendo’s upcoming move into mobile?
I’ll be honest, I’m not fully aware of all the details other than we will have games launching this year. A key factor in hoping to find an audience on smart devices is to ensure that the games are really tailor-made for those devices and their input methods and play styles. When you play on your smartphone, it tends to be more of a snack, in and out for a few minutes.
Although our games will probably feature our great IP [intellectual property], I suspect they’ll be entirely different than what you can find on a 3DS, where you can have a deeper 20-hour experience.
Is there still a fear that one is going to cannibalize the other?
I ran market research in the U.S. and that was a question we were concerned about. The data suggests that smart device gaming was mostly incremental, like 80 to 90 per cent of the money spent on tablets and phones was incremental for gamers to time spent on consoles and portables. For Nintendo, it really is an opportunity to introduce our IP to a new generation and hopefully it leads to interest in deeper experiences on console and portable.
What’s your feeling on the retail market in Canada, with several big chains such as Future Shop closing down?
That was a trial by fire for me as the new general manager in Canada, first with Target’s announcement in January, which hurt us and continues to hurt us. You can probably find articles about how much money they still owe us. And more recently with Future Shop closing down, these are massive, seismic shifts in the retail landscape in Canada that we are trying to manage as best as possible.
We are investing more time and energy in developing relationships with those [retailers] that are doing well. We continue to do the bulk of our sales with those retailers and we expect that to continue to be true.
That being said, we’re seeing digital sales in our e-shop increasing gradually. It now represents about 30 per cent of new software launches. That was zero just a few years ago.
Nintendo has bounced back from a few years of losses. What do you attribute it to?
Amiibo was one of the factors, it certainly surprised us how enthusiastic our fans embraced it to the the degree where we’re still struggling to catch up to demand in some cases. Beyond that, Wii U – which struggled for many years, and to be honest, we’re still not completely satisfied with where it is – had its best year in 2014.
This year so far in Canada, Wii U is up 19 per cent based on NPD numbers. Last year was a huge growth year with big launches like Mario Kart 8 and Super Smash Bros.
Why the turnaround? I’m a gamer and I’d say it’s because we’re delivering the fun. When great games come out and they’re well reviewed… if you look at our Metacritic scores over the past few years have been great and positive. Our games are being enjoyed and they’re very high quality games.
It’s a unique formula of Nintendo fun. It’s bright, primary colours, it’s very welcoming and fairly easy to jump into. It’s a family or friends get-together experience. That formula seems to be catching on and driving the Wii U business.
On the 3DS side, it’s doing even better. It’s up 38 per cent based on NPD so far this year, mostly driven by the new 3DS XL launch back in February.
What’s the feeling internally on Splatoon?
Our presale numbers were amazing, close to Mario Kart 8 numbers a year ago, which is amazing because Mario Kart is an established franchise. Splatoon’s challenge is that a few months ago, nobody had ever heard of it.
I love that as a dad it’s something I can play with my seven-year-old. It’s a complete revolution on what a shooter can be.
We’re looking at first weekend sales of about half of where Mario Kart 8 was. Given that Mario Kart 8 was one of the best-selling games last year, that’s extraordinary for a brand new IP like this.
Does a game like Splatoon benefit from the fact that Nintendo doesn’t bring out new IP frequently?
Oh yeah. We’re very good at launching Mario Party-type games – that’s one franchise that does better in Canada than other markets, for example – but when it comes to launching new IP it’s a huge challenge in today’s world, where consumers are just bombarded with entertainment options that didn’t exist when we first launched Mario 30 years ago.
We have to do new things, like we’ve been on Tumblr with Splatoon. We went to the Toronto Eaton Centre last week and Place Montreal Trust in Montreal and we transformed the fountains into orange-ink-blasting Splatoon-themed play lands. It was just trying to make people do a double-take as they walk by and ask, ‘What is this thing called Splatoon?’
I’m guessing you won’t be able to tell me about the next Nintendo console?
Yeah, I don’t think we’ll be talking about it at E3 this year. We have a lot of great games to talk about and we’ll be completely focused on that. We’ve kind of jumped ahead and announced a whole bunch of things yesterday. At E3 we’ll be spending a lot of time on Mario Maker, which I’m personally excited about because I know my son and I will be trying to outdo each other building impossible Super Mario levels for each other.
The Wii U came out a year before the Xbox One and PlayStation 4 and featured very different hardware specifications than its rivals. How much of a factor was that discrepancy – which could happen again with another new console – in the Wii U’s struggles?
We kind of always do things our own way. It’s not that we’re actively trying to not do what other players in the marketplace are doing, we just want to prioritize the building of fun experiences.
Based on my few visits to Japan, there seems to be a group of game designers there who are like genius Geppettos in their toy labs. They’re these creative people who love to design these experiences that nobody has ever thought of before that might just be amazingly fun. In order to do so, the marriage of the hardware and the software has to be perfect.
It’s a core belief at Nintendo that the best experience comes when you have the software guy and the hardware guy sitting side by side. We only launch something when we feel that it opens up new possibilities and that it’s going to be amazingly fun.
So having third-party developers is a nice-to-have but not a have-to-have?
We would love to have [them] and you’ll hear in a few weeks about some interesting partnerships. We’ve already over the past year opened up and aggressively sought licensing deals in lots of different areas. In the video game space you’ve seen Nintendo characters appear in other game worlds. It’s also happening outside the game world, with the Universal Studios partnership that will bring Nintendo to fans and families through theme parks.