Nintendo battling rising development costs with creativity, says Shigeru Miyamoto

"The more you polish something that has never existed before, the more value it brings."

Nintendo's Shigeru Miyamoto has stated the company's belief that unique creativity is more important than development costs.

Discussing the rising cost of game development in a recent investor Q&A, Miyamoto admitted the company's development expenses have increased each year. "Since our scale of development has grown, a corresponding increase in costs is, in some respects, inevitable," he said.

However, creative and intriguing ideas are most important, a view shared by other members of the Nintendo board.

"We continue refining our products until we are confident that we have created something that our consumers will be satisfied with," said Miyamoto. "With that in mind, what is important is to find ideas that are worth honing, and this has not changed since the era of Nintendo Entertainment System.

"Everyone has different interests, so we cannot make sweeping statements about what ideas are worth pursuing. However, one thing we are sure about is that it should be something which has not existed in the past. The more you polish something that has never existed before, the more value it brings."

As a result, Nintendo aims to nurture developers who "take this unique concept to heart", allocate funds as necessary, and release games "only after we are confident in the product".

Miyamoto added it's "possible to create appealing products based on intriguing ideas, without incurring significant costs".

"We believe that not all products require large costs," he continued. "Even in the case of video games, with the current technology it is possible to create fun games with a small number of developers in a short period of time. We believe it is important not to lose sight of this perspective."

Senior managing executive officer and corporate director Shinya Takahashi commented: "I believe unique titles that are small in scale, but worth polishing can be created by expanding on the ideas of a small number of developers, rather than spending large sums of money on every game. While overall research and development costs are rising, there are certain products for which expenses remain relatively stable, depending on our approach."

Ko Shiota, senior executive officer and corporate director, added the merging of home console and handheld console for the Switch allowed Nintendo to integrate its development environments, which will continue with Switch 2.

"Because we are already familiar with Nintendo Switch, maintaining a similar basis for development environments in the future will allow us to carry over the experience we have already built, which should lead to a reduction in research and development costs over time," he said.

The investor question follows high profile and expensive flops from the past year, including the likes of Suicide Squad: Kill The Justice League from Warner Bros. and the cancelled Concord from Sony.

Nintendo, meanwhile, is gearing up for its Switch 2 launch. While reports have suggested its graphics could be comparable to the PS5 and Xbox Series X/S with the ability to run Unreal Engine 5, its specs are likely to be less powerful.