 Hey everyone welcome back to Nintendo Prime and this is the first time you've ever seen a Nintendo Prime video I would appreciate if you drew up a like hit the subscribe button we're on our road to 80,000 subscribers and today we get to talk about something very interesting and we're gonna dig into something brand new announced you know within the last 24 hours and something to look into from what Nintendo was investing in the past back in 2021 and how this kind of all works together and what this could mean for the future of Nintendo. Now if you haven't noticed the news yet today I want to share with you right now about Nintendo actually investing a hefty sum of money into something that's going to impact the long-term future of the company and we're talking about Nintendo buying land and building a new building. Here's a quick look at what Nintendo has going on and they have acquired land for new development building and the building is going to be open in 2027. This post actually doesn't contain all of the nitty-gritty details but Nintendo their own corporate Twitter tweeted out about it and they posted a news release on it we'll look at in a moment but Nintendo has announced it's acquired new land according to official PR it has bought this land next to it's Kyoto HQ so Kyoto HQ is the headquarters for all of Nintendo and then yeah this land is literally adjacent to it so they're just expanding their current land and do a bigger plot and they spent about 40 million dollars now that's just what they spent on the land that's not what they're spending on the building so in this new area will be home to the headquarters second development building which is tentatively the name the purpose of this facility is to apparently strengthen its research and development and the project is scheduled to be completed in 2027 so this is going to be essentially the headquarters for Nintendo R&D in addition to the conventional R&D investment capital investment this is stuff they've done in the past we have positioned the site to be acquired and utilized this time as having an important role in strengthening research and development and some details we learned about the building or stuff like this you know it's going to be about 38,000 meters squared in terms of actual floor space that they could use it's going to be a 12 floor tall building or about 72 meters tall and that's about it obviously I don't think construction has quite started yet they just bought the land so construction I would assume it's a start at some point later this summer but you know they are they are saying it's going to take five years to build this building which is quite interesting usually you can get these buildings done within a year or two they're doing five and you have to wonder why why they they chose five years specifically as the target date maybe it's just the construction company they're choosing to go with maybe it's you know budgets or whatever it might be or they just have a specific reason they want this building available then that they maybe don't need available now now 2027 is obviously quite a long ways away Nintendo will probably have their next-gen device out the door by then which with most of its R&D already done in the current way that Nintendo does it which right now Nintendo's R&D group works out of the Kyoto building but let's take a look at the official press release on this so I don't know I find this interesting but we need to actually dig deeper because this isn't the only thing Nintendo's investing in their R&D department let's actually look at something they said last year I'm getting this off tweak town it's actually available on a bunch of websites this is just the first one that popped up when I was re-looking it up Nintendo is spending more on R&D to fund next-gen hardware new games experimental technologies and service infrastructures all right in a recent Q&A session this is this was back you know in May of two thousand and twenty one Shintaro Furukawa president you know of Nintendo has increased research and development expenses the condensed version of Furukawa's response is that game development costs are rising Nintendo is currently doing research and studies on beefing up its digital content and services business and that early phases of next-gen development is under wait next-gen hardware development so yeah I mean obviously we're gonna have next-gen you know before 2027 to give Furukawa statements more context I decided to put another look at the company's historical research and development spend since 2002 the results are pretty illuminating Nintendo has spent seven hundred and ninety three million dollars USD on research and development in fiscal year 2021 more than any other period and rightly so given the higher cost of game development during this period the switch is in the middle of its life cycle what Nintendo wants to keep the console's momentum going with a full slate of games and you can kind of see that spending going up up up up about 2020 and 2021 we're very very close um what what's interesting is obviously research and development does include software development uh and so I can get a little confusing on where the money's going when research and development seems to just encompass the whole company it's it's interesting um here's what Furukawa said about it uh back last year our software development costs which include outsourcing are increasing as we work to maintain a continuous stream of new titles for the Nintendo switch as it enters the middle of its life cycle because per title development costs are higher now than they were on past platforms we anticipate that research and development expenses will continue to rise as we work to maintain a sizable lineup of titles we are also conducting a variety of studies which include investigating ways to enhance our digital business and future services that will help maintain long-term relationships with our consumers as we touched on in the corporate management policy briefing last September in addition the development of the next generation of hardware needs have began years before launch so research and development expenses are gradually rising for that as well we are aiming to grow by continuing our integrated hardware software entertainment business and that means conducting all sorts of research and development in various areas including both hardware and software so to explain this a bit more um what nintendo's basically doing is research and development money is primarily going towards outsourcing um experimental software and looking into hardware and any other thing they want to put real research in so as an example the zelda team wouldn't actually be working under the r&d department they'd be just working under nintendo ead uh but if you're going to be looking at something like fire emblem you know three hopes or whatever that would fall under the r&d department because the r&d department is doing research and development into investing into koei tecmo to make that game same thing for bayonetta 3 so a lot of these outsourced games would come from here and then the beginning games in certain franchises like arms would have also fell on their r&d split tuned back on the we u days would have also fell under r&d so a lot of their new ip new experimental games um you know it would have fell under the r&d department but once you know they're fully established and they move on over to nintendo ead and kind of get you know cycled into their normal development schedule which again you know to to start new software requires more money than it used to now nintendo r&d spending um also to talk about doing the earnings earnings report last year and instead nintendo primarily engages in active development of hardware and software for dedicated video game systems with support from various companies and organizations in its effort to put smiles on the faces of everyone nintendo touches around the world by offering new and compelling products that anyone can enjoy we also undertake the planning development and operation of games that many people around the world can enjoy in the pharma smart device applications with respect to hardware we continuously investigate and undertake research on fundamental technologies spanning data storage technology such as semiconductor memory display technology such as lcds which i mean they're kind of moving up beyond with oleds uh and electronic components which we also carry out research development activities to examine the applicability of various technologies including interfaces such as touch panels and sensors wireless communication networks security cloud computing virtual reality deep learning and big data analysis into the field of home entertainment this is stuff that nintendo is already spending research and development on this they're spending research and development on vr yes they're looking into cloud computing they're looking into all of these things and they have heavy heavily heavy investments in r&d into this technology our efforts are not limited to in-house studies and research in that we are also exploring various possibilities on a daily basis so every day they're looking at outside technology so they can discover technologies that help create new ways to play by proactively turning our attention outside nintendo so they're not ignoring what's happening in the world moreover we continue to enhance the durability safety quality and performance of our products and this is where we saw they actually have improved the quality of the joycons although they admitted they'll never be able to get rid of drift at this point um let me see here uh they also say we have to respect the software we're focusing on taking full advantage of hardware features in planning our products designing games whose elements include graphics music and game scripts and developing developing programs furthermore in order to deal with the digital business expansion we have strongly driven the expansion of system infrastructure that supports various networking functions of software and multi sectorial network servers such as the nintendo eshop basically they're attempting to make the eshop better they're attempting to make online gameplay better hence the new server infrastructure it's an ongoing process we all know it's it's far behind where it should be but uh nintendo is aware of that and they are investing heavily in trying to make it better moving forward probably a lot of the major changes won't be to the next platform because a lot of things are ingrained baked into switch as is in addition we have established the research and development structure for smart device software of course you know that went through their rng department to promote the planning and development of smart device application software and the development of back and server system again we've we've gone over the server stuff in terms of the uh the component procedure and manufacturing process we with the cooperation and support of our manufacturing partners continuously research and accumulate relevant technical know-how on mass production of components using new test methods and technologies and also comply with relevant regulations this is obviously in regards to all of the chip shortages that have been going on at nintendo so a lot of this is um a lot to do about what nintendo is spending all this money on they're building a new building that's going to open in december of 20 27 at least that's the current plan maybe it's done earlier maybe it's delayed that's the current plan where they're going to move their entire research and development team out of the Kyoto building into that building and then they'll be able to obviously beef up you know the development teams and and other teams inside the main headquarters uh and a lot of the rnd the focus on hey we're gonna have some development teams over here that are working on new concepts for new games that's where a lot of the new ideas for like some tune and arms and all that stuff come out of but also uh we're gonna be focusing heavily on the hardware side of things um and trying to get that going as well as well as the digital business so uh nintendo i i like what they're doing here i know this is just you know a lot of hopes and dreams and a lot of hullabaloo about what we hope this means for the company every company that does hardware even just software companies have research and development teams so it's not as if we're talking about nintendo fundamentally changing the game but what we are talking about is nintendo investing more money than ever building a specific building for this team for the general research and development team and really focusing heavily on trying to make everything better moving forward i mean you just read all the stuff this is all from last year by the way old news that kind of flew under the radar that i wanted to bring to the forefront investing in vr investing in cloud computing recognizing there's problems with the e shop and the way nintendo handles digital games and they want to make that better recognizing that cloud computing and cloud you know games on switch haven't always ran the best what can we do to actually make that something better in the future again a lot of these investments will not bear fruit to us the public consumer for years until nintendo's next platform but the fact that nintendo recognizes the current ongoing issues and problems is fundamentally important so i applaud nintendo on that investment obviously building a new building they felt like was necessary to further grow what they're doing now it's not going to affect nintendo's next harbor that much if you guys are wondering how does this impact nintendo's next gen hardware well the investments they've already made an r&d you know a billion dollars and everything to put in yeah that's going to impact nintendo's next gen harbor this new building it's not really going to mean much for event in 2027 and i don't know that we could point to a building because of that building we got better online because of that building we have more partnerships i don't know that we could say that but obviously nintendo's expanding their teams you know when you talk about game development and when you talk about research taking more money more what they really mean is they have to hire more people so they need a whole new building so hiring more people should make things more streamlined should make things happen quicker should mean we don't have to wait you know an entire generation hoping we get themes because they'd have an entire team already able to work on that dedicated to making something like that happen which nintendo probably can't do right now because nintendo doesn't have a ton of employees like the worldwide employee count is something like five thousand you know i was like for a multi billion dollar company when you're like oh yeah five thousand that's like nothing that's worldwide nintendo is expanding they're bringing on more more you know more brilliant minds and when that building's done in 2027 that's really when the real mass expansion can begin uh so i'm really excited for nintendo's next generation just because whatever they're doing next is going to be great but we're also going to have this building and thus a whole bunch of new hires during that generation which means fundamental changes fixes um improvements to nso and other things are going to be happening much quicker because they're going to have so many more people dedicated to it nintendo heavily investing in themselves is i think always the way to go as we see sony out there investing in epic games hoping to you know get their hands and their you know their mini pause all over the metaverse which is totally fine that's a you know i'm not saying that's a bad investment for sony that's just what they're doing and uh after we've seen sony actually downsize for a number of years uh and you know watching other companies as well like microsoft you know gobble up activision blizzard uh it's kind of refreshing to see nintendo and by the way again i'm not saying that's a bad move for microsoft but it is refreshing to see nintendo a company currently at the top top of the sales charts top of the money making like nintendo is literally in a class of its own at least for now until playstation 5 and xbox series x become more readily available nintendo sitting up there on the throne they're like you know what we're gonna take this money and we're going to improve ourselves so we could do this again and again and again and again i like that approach from nintendo very forward thinking they could have went and spent this money the billion dollars an r&d and bought a company they could have went and spent you know this 40 million and maybe invested it solely in like working with platinum games or something and they said no you know this billions of dollars this r&d department is going to cost the bill they could have put that money towards buying other companies and nintendo said uh uh uh we're gonna make ourselves better we're gonna make our company bigger we're gonna do better by our consumers we're gonna do better by us and thus drive more businesses just thus drive more profitability because consumers are happier and more willing to spend money on our products and we're not resting and i love a nintendo that doesn't rest on their success i feel like when they went into the we you era that was nintendo resting on the success of the we and ds not anymore this president shantara for akawa is forward thinking and saying uh uh uh we can do better we will do better we're gonna keep driving our business forward we're self investing and i can't wait to see what comes of this down the line thank you guys so much for tuning in i entertain a robot dance from the center prime let me know you think about this down in the comments and i'll catch you in the next video