Nintendo Courts Non-gamers in ‘About-Turn’ Strategy

This photo taken on January 13, 2023 shows a guest taking a photo with Mario during a preview of Super Nintendo World at Universal Studios in Los Angeles, California. (AFP)
This photo taken on January 13, 2023 shows a guest taking a photo with Mario during a preview of Super Nintendo World at Universal Studios in Los Angeles, California. (AFP)
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Nintendo Courts Non-gamers in ‘About-Turn’ Strategy

This photo taken on January 13, 2023 shows a guest taking a photo with Mario during a preview of Super Nintendo World at Universal Studios in Los Angeles, California. (AFP)
This photo taken on January 13, 2023 shows a guest taking a photo with Mario during a preview of Super Nintendo World at Universal Studios in Los Angeles, California. (AFP)

Once confined to rectangular screens, chirpy plumber Mario and pointy-eared Princess Zelda are popping up in theme parks and toy stores as Nintendo goes all out to win non-gamer fans.

It wasn't always this way: for many years, the Japanese company shied away from promoting products or creating media other than video games.

But its push for broader brand recognition over the past decade has reached the point where even Mario creator Shigeru Miyamoto describes Nintendo as something of a "talent agency" for its colorful characters.

A new area based on the "Donkey Kong" games was unveiled at the Universal Studios Japan amusement park on Tuesday, expanding Nintendo's zone there -- already a major tourist draw.

Its doors open on December 11, following last month's launch of the first ever Nintendo museum in a renovated factory in Kyoto.

At the box office, "The Super Mario Bros. Movie" was 2023's second-highest grossing title, with a sequel due in 2026 and a film based on Nintendo's "The Legend of Zelda" also on the way.

"Over the past decade, there has really been an about-turn" in Nintendo's strategy, said Florent Gorges, an expert on the company's history.

- 'Reclusive' -

The gaming giant started life in Japan's traditional former capital of Kyoto in 1889, producing playing cards.

For a long time, it took a "conservative" and "somewhat reclusive" approach to cashing in on its intellectual property, said Gorges.

"There was a certain culture of secrecy, taken to extremes within Nintendo, that made it very squeamish about trying new things," he told AFP.

Hiroshi Yamauchi, company president for over half a century between 1949 and 2002, "hated" the idea of any kind of company mascot, Gorges added.

An early foray outside of the gaming world also proved tricky.

In the 1990s, Nintendo entrusted its Mario IP to a Hollywood production team who made a live-action movie that was roundly panned.

The flop may have contributed to its cautious approach, until disappointing sales of the Nintendo 64 and GameCube consoles in the following decade forced a re-think.

- Wii success -

The two next consoles -- the portable DS with two screens, and the remote-controlled Wii -- were designed to attract non-gamers.

Each sold more than 100 million units and remain among Nintendo's biggest commercial hits.

But when updated versions of these two consoles did not perform so well, the company decided to again venture beyond video games.

Fast-forward to today, and Nintendo is "selling soft toys and sweets, allowing its characters into consumers' everyday lives", said Hideki Yasuda of Toyo Securities.

Nintendo is sometimes compared to Disney, but its business model differs from that of the US giant, which acquires and develops existing franchises, such as Star Wars, said Kensaku Namera of Nomura Securities.

Instead, the Japanese company "is focused on what it can do on its own", and so collaborates with external studios and creators for its films and other projects.

Going forward the firm may draw inspiration from the success of Pokemon, which began as a Nintendo game but now spans movies, playing cards, and a merchandise empire controlled by several entities.

That has "really pushed Nintendo to further exploit its franchises", Namera told AFP.

"Many children love Pikachu, and buy soft toys even if they have never played the game," he said, referring to Pokemon's famous electric mouse.

Game and console sales account for over 90 percent of Nintendo's revenues, so exposure to characters such as Mario or friendly dinosaur Yoshi could be "a trigger" to attract more people to consoles, Namera said.



Samsung Sees Q1 Profit Beating Estimates as Looming Tariffs Spur Chip, Phone Sales 

An attendee films Samsung Electronics' Galaxy Smart Ring during its unveiling ceremony in Seoul, South Korea, July 8, 2024. (Reuters)
An attendee films Samsung Electronics' Galaxy Smart Ring during its unveiling ceremony in Seoul, South Korea, July 8, 2024. (Reuters)
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Samsung Sees Q1 Profit Beating Estimates as Looming Tariffs Spur Chip, Phone Sales 

An attendee films Samsung Electronics' Galaxy Smart Ring during its unveiling ceremony in Seoul, South Korea, July 8, 2024. (Reuters)
An attendee films Samsung Electronics' Galaxy Smart Ring during its unveiling ceremony in Seoul, South Korea, July 8, 2024. (Reuters)

Samsung Electronics on Tuesday flagged a much smaller-than-feared 0.2% fall in first-quarter operating profit, boosted by solid memory chip sales and strong smartphone demand, partly driven by customers concerned about US tariffs.

Sales of conventional memory chips used in consumer devices such as smartphones and AI chips likely came in better than expected, with some customers stockpiling chips ahead of potential US tariffs on semiconductors, analysts said.

The world's largest memory chipmaker estimated an operating profit of 6.6 trillion won ($4.49 billion) for the January-March period, well above a 5.1 trillion won LSEG SmartEstimate.

That would compare with 6.61 trillion won in the same period a year earlier and 6.49 trillion won in the preceding quarter.

"While general memory prices dipped, strong demand from customers looking to secure inventory ahead of potential US tariffs helped boost Samsung’s memory chip shipments, supporting overall performance," said Greg Roh, head of research at Hyundai Motor Securities.

Shares of Samsung rose 2.6% in morning trade following its preliminary earnings, outperforming a 1.6% rise in the benchmark KOSPI.

Samsung, reshuffling its top ranks following the sudden death of co-CEO Han Jong-Hee last month, is expected to release detailed results on April 30.

SECOND QUARTER SEEN WEAKER

Last week, US President Donald Trump announced a slew of reciprocal tariffs on trading partners, including China. While semiconductors were exempted from reciprocal tariffs, Trump on Thursday reiterated plans to levy tariffs on chips very soon.

Roh said Samsung's AI features in the Galaxy S25 smartphone models helped drive strong sales, adding that preemptive smartphone shipments by North American customers ahead of the tariffs likely contributed to first-quarter results.

Samsung Electronics in January unveiled its newest Galaxy S25 smartphones, hoping their upgraded AI features could reinvigorate sales and fend off Apple and Chinese rivals.

As a result of buyers stocking up in the first quarter, analysts said shipments are likely to decline in the second quarter.

Kim Sun-woo, a senior analyst at Meritz Securities, said Samsung's second-quarter operating profit could stagnate also due to delays in securing new customers for high-bandwidth memory (HBM) chips.

Analysts estimated that Samsung's chip division profit might have halved to about 800 billion won in the first quarter from a year earlier, as losses in the foundry business likely offset profits from the memory chip business.

The foundry business involves making chips on a contract basis for customers such as Nvidia, Qualcomm and AMD.

Samsung in January warned of sluggish sales of its AI chips in the first quarter due to US export restrictions to China, Samsung's top market. Samsung's chairman, Jay Y. Lee, was among executives who met with Chinese President Xi Jinping in Beijing at China's annual conference late March.

At a shareholder meeting in March, Samsung executives apologized for the company's poor share price stemming from its late response to the booming AI chip market. They expected chip earnings to recover in the second half on demand for smartphones and data centers, and as it aims to start supplying its improved HBM3E 12-high chips to Nvidia in the middle of this year.

South Korea's SK Hynix the world's second-largest memory chipmaker, said last month some customers have brought forward orders in preparation for new US tariffs, but was wary of counting on a sustained demand recovery.

Micron Technology in March forecast third-quarter revenue above Wall Street estimates, signaling strong demand for its HBM chips used in AI models.