Nintendo bets on 3D gaming amid slumping profits

Nintendo has grown to lead the video games industry - predicted to be worth $68bn in annual sales by 2012 - by creating colourful worlds, full of visual stimulation.

But the company's offices in Kyoto are quite the opposite.

Even by the standards of Japanese corporations it is, to say the least, understated.

The lobby is large and anonymous, with white tiled floors and white walls, the monotony is broken only by a single receptionist sitting behind a small desk, and a row of framed ceramic plates painted with traditional scenes - carp fish and bamboo groves.

But it is in these austere surroundings that Shigeru Miyamoto has come up with his latest innovation that he thinks will help Nintendo maintain its dominance of the games console business.

'Constantly thinking'

The sparsely decorated lobby at the Nintendo Kyoto office is a stark contrast to the colourful worlds created in its games

Few video games designers get on the Time 100 most influential people of the year list, but then Miyamoto-san virtually invented the genre with Donkey Kong.

The name was his idea too, found by looking up the words "stubborn" and "gorilla" in an English dictionary.

Mario, a character in that game, spun off into numerous different titles.

Mr Miyamoto has been the genius behind Nintendo ever since, working not just on games, but hardware like the Wii too.

For a man who will be 60 next year he comes across as almost childlike, with a face quick to smile.

And that he says, in a rare interview, is the secret of his success.

"One thing I can say is I am constantly thinking," he says.

"Most of the fun things I find cannot necessarily be turned into video games right away. But it grows, and one day, it all comes together.

"So it's not like one day I get a strong inspiration for an idea. Most of the time, what I experience in life turns into a game eventually," said Mr Miyamoto.

He says the hit Nintendogs is an example. It was inspired by the Miyamoto family's pet.

Future in 3D?

The 3DS game console allows users to see in 3D without the use of special glasses

Now, like many other electronics companies, Nintendo is staking the future on 3D.

A new hand-held console, the 3DS, was launched in Japan over the weekend. Unlike 3D televisions and films, it can be used without special glasses.

"3D is nothing new in our world," says Mr Miyamoto, brandishing one of the machines.

"When we were young we used to experience 3D with the type of glasses with red and blue lenses.

"And today, in order for many people to view 3D films, they definitely need some special glasses.

"But the beauty of our Nintendo 3DS is because we use a portable device it allows everyone to enjoy 3D anywhere they go."

The console is in a clamshell shape, and has two screens.

The top one is 3D and the technology works by vertical lines blocking half the pixels from the view of each eye when its held at the usual distance in front of the face.

The user can set the depth of the 3D effect by using a slider control on the side, something of which Mr Miyamoto is particularly proud.

While 3D televisions have been around for a while, and 3D camcorders are starting to be released, sales have been weak.

Nintendo's gamble

Nintendo could be the first to take 3D mainstream. It will ship 4 million units over the next month.

But some have speculated that even though the 3DS will help consumers to get used to the new technology, in the short term it might not be much of a boost for the wider electronics industry.

People may be tempted to put off buying a 3D television in anticipation that manufacturers may develop versions that can be used without glasses too.

Shigeru Miyamoto: What I experience in life turns into a game eventually

Nintendo certainly needs a hit.

Net profits slumped by 74% to 49.5bn yen ($598m; £372m) in the nine months to December on the back of falling sales and the strong yen.

The company faces tough competition from Sony and Microsoft, and new entrants to the games market like Apple's iPod and iPhone and other smartphones.

Games like the hugely successful Angry Birds are a fraction of the price of Nintendo's titles.

"Nintendo makes software for our own hardware," says Mr Miyamoto.

"Of course I try to make software that is valuable enough for customers to pay for it. So the fact that different types of games are available to customers, and what happens to Nintendo's games seems a separate issue to me.

"So my goal is to continue creating the software to high standards. As long as we keep doing that, I believe our business will follow."

An innovator he may be, but Mr Miyamoto is in some ways a typical Japanese salaryman.

He has worked for Nintendo since 1977, never creating a company in his own name, nor the vast fortune to go with it.

When asked why, he laughs.

"Maybe I am richer than you think," he says.

"But seriously, it is not me, myself, creating any software at all. I am working comfortably with a bunch of other colleagues and that is how I like my job."