David Rosenthal: evaluation

Transcript context

…Totally agree. The GameCube is a very me-too console. Everything about it is like, we wish we had done some of this on the N64, but it's a little too late now. But what you're seeing in the handheld, especially in the DS is, okay, this is super innovative to have two screens. One of them is a touchscreen with the 3DS that would come later. One of them is a 3D screen. Nintendo is starting to, at least the handheld group, figure out, the way forward for us is we design innovative hardware that can inspire new types of games to be played and new types of games to be designed, especially by our first-party team in-house. That does all kinds of amazing things for them. Think about the Wii, think about the Switch switching literally, and the joy-cons and how popular that is. It also does terrible things for them, which we'll talk about for the Wii U. This is when they really discover they are unapologetically innovating on the hardware to play games, and that is what defines them. This is so much the future direction for Nintendo that in 2002, when Hiroshi Yamauchi is leaving the company and transitioning to the next CEO, Satoru Iwata, and leaving it in his hands, his final request is, "Nintendo give birth to wholly new ideas and create hardware which reflects that ideal and make software that adheres to that same standard." Yes, and it's not just new types of games to be made on new types of hardware. It's serving the end goal of enabling new types of people to play games. What's going on here and why the handheld business becomes such a juggernaut for Nintendo is, I think as we alluded to earlier, it starts serving two completely different markets than the PlayStation and the Xbox. Both of those other markets are (a) completely ignored by Sony and Microsoft, and (b) very, very large. The first is the kids' market. This is the bread and butter all the way back to the NES and the toy aisle. As Sony and Microsoft moved into the Grand Theft Auto era, the Call of Duty era, the Halo era, and more mature content, the Gameboy became the new home for kids. It's cheaper. If you're a parent of a four-year-old or a five-year-old, you're not going to worry about buying $100 piece of plastic for them. It's less immersive, which is actually a feature for kids because it's easier to play. Back to the Nintendo guarantee Seal of Quality brand, you can be pretty sure that little Susie and little Jimmy isn't going to be playing really violent or adult content games on your Gameboy Advance, DS, or what have you. It's really compelling for little kids and their parents. As we talked about a few minutes ago, nothing embodies this more than Pokemon. We talked about Pokemon on the NFL episode, where Pokemon is, I think in my opinion, wrongly listed as the highest grossing media franchise of all time because the NFL really should be a single media franchise and is bigger, but it doesn't matter. Pokemon is number two or number one, no matter how you want to say it. Lifetime Pokemon franchise revenues are just under $100 billion. The primary medium for it is the freaking Gameboy. Yeah. Let's take a little detour and tell the Pokemon story here because it is incredible. I think this is not a super deep story, but so cool. So many little aspects of this are one in a million chances. You mentioned a $100 billion lifetime franchise since 1996 when it came out. $60 billion of that is merch. Video games is only $35-ish billion of the $100 billion. People became such big fans of this that they tripled, quadrupled the actual video game sales in merch revenue. That's $60 billion if you compare it to the Marvel Cinematic Universe, which people think of as a big media property. The MCU is $30 billion lifetime, which is half of Pokemon's merch revenue.…

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