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TOKYO--At Nintendo's annual corporate strategy conference today, company president Satoru Iwata briefed the press on the current status of the gaming market. Besides revealing the code name of Nintendo's next console--"Revolution"--which will be unveiled at the 2005 E3, he explained Nintendo's philosophy toward game development in detail.

Explaining Japan's video game market downturn, Iwata pointed out the flaws of the gaming market's success formula. While pointing out that the American game market is starting to suffer a similar decline, Iwata said he sees innovation--a word often repeated by Nintendo--as the solution. "The video game market (in Japan) has been shrinking since 1997," he said. "There have been a number of reasons given for it, such as the low birthrate, emergence of the used game market, and the growing use of mobile phones. But that's not enough to explain everything. Games have really gone through an amazing evolution since the Famicom era, and with it, games have gotten more complex and high tech in order to meet the demands of gamers." Iwata then pointed out his belief that increasing games' complexity is not increasing sales. "Casual gamers are starting to drift away from games, and people who used to purchase a lot of games a decade or two ago are no longer doing so at the same rate."

Iwata then outlined Nintendo's stance toward game innovation. He explained that games oriented toward veteran gamers cannot be played by new gamers, but games oriented toward gaming novices won't satisfy the hardcore element. “So what we needed was to find a way to make everyone start off from the same point, like back when the Famicom made its launch and everyone touched the controller pad for the first time," he said. "That's the concept behind the Nintendo DS. Its touch-sensitive panel and voice recognition capability will offer a wide range of experiences that will be new for both beginners and hardcore gamers."

Iwata explained that the company is also looking into creating new ways of gameplay on existing consoles. The president revealed that a Mario Party sequel that doesn't require the use of controllers is currently under development, although no details were discussed during the conference. "The Mario Party series was known to have a low learning curve, but that still didn't mean that every member of a family could enjoy the game. So, we're going to take on a new challenge, and make the game playable for even people that can’t handle the controllers," commented Iwata. His comments lend credence to rumors that the Mario Party sequel may use an EyeToy-like camera peripheral. Nintendo recently filed trademarks for two camera-related game products called "Manebito/Camera" and "Ningen-Copy/Manebito."

Iwata also revealed that Nintendo's next-generation game console is currently in development under the project code name "Revolution." The only specific detail he did divulge is that the machine will be able to hook up to a PC monitor as well as to a traditional TV. Iwata did hint that the machine will be taking a different path than that of Microsoft's Xbox Next and Sony's PlayStation 3. "We're thinking of an innovative idea for our next-generation console that's completely different from consoles in the past," commented Iwata. "It will be clearly distinct from the other next-generation consoles that competing companies will develop. What's important isn't a next-generation technology, but a next-generation way in playing games." The Revolution will be unveiled at next year's E3 expo in Los Angeles.

However, Iwata also stressed that Nintendo doesn't see hardware innovation as unnecessary. "We at Nintendo aren't brushing off the need for high technology, but we think that there are other ways of taking advantage of it," commented Iwata. "The Nintendo DS's double screen or touch-sensitive panel isn't particularly new, but there weren't any other companies that thought of using them in video game machines."

In a related note, Iwata commented that Nintendo might possibly acquire additional stocks from its partner Bandai, although there are no specific plans to do so at the current time. Contrary to analyst speculations, Iwata stated that Nintendo has no plans to buy out Bandai. Last September, Nintendo acquired 2.6 percent of Bandai’s shares to become the ninth-ranking top shareholder of the company.