4. Hypothesis Validation Mechanism

Iwata - So first you decided on the “tea table” and “calendar," then to use the Miis, and that’s when you started to see that you had something interesting brewing. But there’s still the huge problem of figuring out how it could work from a business standpoint. You’re not just doing it for fun (laughs).

Yukawa - Right.

Iwata - How did that play out?

Beppu - For Nintendo, I felt the idea to include ads within one of our products was a huge decision. I mean, up until that point we’ve never had any kinds of ads included in one of our products.

Iwata - Well, actually, a long, long time ago there was the Nagatanien “Mario” (※4).

Beppu - Oh right, there was.

※4 Nagataen “Mario”＝ The official title was “Return of Mario Brothers”. Released in 1988 as re-writable Famicom Disk System software.

Iwata - Huh - actually I think that was in collaboration with Dentsu.

Yukawa - Really? I’m sorry, I wasn’t aware.

Iwata - There was a game called “Mario Brothers," and we put in ads for Nagataen and sold it for the Famicom Disk System at 400 yen - 100 yen cheaper than usual.

Yukawa - I didn’t know such a thing existed.

Iwata - Well either way, it’s been over 20 years now (laughs). We’ve gotten a bit sidetracked - Beppu-san, please continue with the ad model.

Beppu - Sure. “Wii no Ma” is a free service, so it doesn’t work as a a business alone. But we decided to take on a new challenge as an ad model, proposing various products and services that are out there and would really improve people’s every day lives.

Iwata - You set out to solve this incredibly difficult puzzles where a really great thing would get across to someone who really needed it, meaning the person that’s using the thing would be happy, the seller would be happy and we’d be happy as the mediators. To put it frankly, you wanted to create the dream situation to boost the economy.

Beppu - Right. In terms of TV ads, the standard for measuring the ad’s effectiveness is the viewer numbers - unfortunately it’s impossible to pinpoint the age and sex, and whether that person watched all the way to the end or whether they were satisfied with what they saw.

Iwata - But with “Wii no Ma” that’s something you could do.

Beppu - We can. We thought, if we’re sure to properly analyse that response, perhaps we can create something new that’s of value.

Iwata - To just add some information here - Beppu-san got a lot of experience in research and analysis during his days at the ad agency. He’s a professional that knew specifically how to research these things - something I used to have an interest in.

If I had never met Beppu-san I don’t think there would have ever been a Club Nintendo, and the same goes for everything we’re doing with “Wii no Ma”.

Beppu - Yes, I think it is the same.

Iwata - We’re obviously working to make things that will be popular with people, but becoming popular isn’t just a matter of selling a certain amount at the store. Of course, that’s one important aspect - the company gets its revenue that way. Although either way it’s a sale - the next step you take depends on what kind of people bought your product, how many people are sharing that one copy of the product, how they play, whether they quit right away or continue to play for a long time, whether they enjoyed it enough to recommend it to others or whether they felt unsatisfied by the time they were done with it. Without knowing these things, Nintendo can’t continue on, regardless of whether we have a great desire to be even more popular.

Beppu - And that’s why Iwata-san asked, “Can’t you do these kinds of things? What about those kinds of things?”

Iwata - Right. Here I’d like to ask Suzuki-san - when making TV dramas…

Suzuki - Naturally you want it to be popular (laughs).

Iwata - You DO want it to be popular (laughs). In the TV world viewer percentages are the standard for evaluating a program, but I’m wondering if there’s anyone like me that wants to know what KIND of people it’s popular with?

Suzuki - Naturally. In fact the majority of people think that way. Documentary makers in particular. Though there are many who make dramas as well. However when it comes to actually researching that - I don’t know many who have.

Iwata - Naturally if you’re making something you want to know that. There’s no way you’d not want to know that, as a maker.

Suzuki - Right. But for the staff who actually measure the current ratings, there’s an aspect of it that they’re afraid to find out. Because if you’re curious about it there’s this notion that you’re asking because you’re not hitting the groups you want to.

Iwata - Oh, I see.

Suzuki - And the fact of the matter is that if you are a it, it’s harder to ask for that information.

Iwata - Well, if all kinds of Nintendo products were selling a ton when I was made CEO there’s certainly a chance that we wouldn’t have had to think about this.

Everyone - (laughs)

Iwata - The driving force behind that was because we thought “This SHOULD be selling more, this SHOULD be more popular, so what’s with this result?” Furthermore, even if something was a hit we were worried as to whether it was really resonating, so we wanted to understand the background behind it. Then, once we knew something was actually interesting we’d dive head first in that direction.

Suzuki - Right, I know what you mean. If you get first place it’s important to understand why.

Iwata - That’s why I think it’s more accurate to say that “Wii no Ma” isn’t new ad media as much as it’s “a new framework for validating hypothesis” - a “new hypothesis validating mechanism."

Beppu - For instance when putting out a new product, the developers have a hypothesis about who wold be using their product as they make it, and I think whether it’s actually being well received by the intended audience, or whether they’re glad they bought it, or whether they’ll want to buy the next thing - validating these things is what leads to the next.

Iwata - Right. Properly evaluating these things is what leads to making an even more appealing product next time.

Beppu - But there’s actually not that many ways to measure it. So it would be great if “Wii no Ma” would be able to help in some way.

Iwata - But if we went out there and started calling it a “Hypothesis Validating Mechanism” people would respond with, “a what?” (laughs)