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NEWS STREAM

China Abolishing One-Child Policy; Iran Joins Syrian Peace Talks in Vienna; Apple TV Out Tomorrow; Nintendo's First Mobile Gaming Platform; Republican Debate Gets Chippy With Moderators. Aired 8:00a-9:00a ET

Aired October 29, 2015 - 8:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[08:00:19] KRISTIE LU STOUT, HOST: I'm Kristie Lu Stout in Hong Kong and welcome to News Stream.

Now China abolishes its long-standing one-child policy. The world's most populous nation will allow couples to have two children.

And we'll get hands-on impressions of the new Apple TV. Is it a revolution or just a better box?

And Republican presidential candidates duke it out in their third debate.

Now we begin in China where the government says it will now allow all couples to have two children, officially scrapping its three-decades' old

one-child policy. This as China rolls out a new five-year plan among meetings among top Communist Party officials.

Now, for a closer look, Steven Jiang joins me now live from Beijing. And Steven, it seems major social planning reform is the focus of the next

five-year plan in China.

STEVEN JIANG, CNN PRODUCER: Well, the economy actually remains the top priority if you read the entire communique. But this policy change in

family planning is attracting so much attention because of the controversial nature of that one couple, one child policy that you

mentioned has been in place for over three decades.

We have heard all those horror stories of sometimes brutal enforcement of that policy in different locations throughout a country. You have

activists and NGOs dedicated years of efforts trying to change that.

But now, it's changing I think because not of the human rights aspect, because of the economic realities. If you read the communique carefully,

the government, the party is saying it is now launching this one couple, two-children policy in response to an Asian population in trying to promote

a more balanced growth. That's because in recent years that labor force surplus that had been so instrumental to -- for China's breakneck economic

growth in the past three decades, it's fast disappearing. This population in some officials' words is getting old

before it gets rich, that is a big problem for this government and they're trying to address that. And the result is this policy change, Kristie.

LU STOUT: And so why is China ending the one child policy? As you put it out just then, it's because of a new economic reality inside China.

What is the view among Chinese and China to the news? Do most Chinese support the end to the one-child policy?

JIANG: It's actually decidedly mixed. Because this policy has been partially relaxed two years ago when the government allowed some couples to

have a second child if at least one of the parents is a single child him or herself. We talked to a lot of people back then.

Many people actually decided not to take up the party's offer to have a second child because they say of the fast rising cost of living in big

cities. When they do the math, they realize the cost of going through another pregnancy, the cost of putting another child through schools and

other fees associated with raising a child in the big city in China is too prohibitively expensive.

So that's why I think another reason the government is willing to relax this policy at this juncture. They feel comfortable because they do

not predict or foresee a surge, an explosive growth of population even now they have this one

couple, two-children policy, Kristie.

LU STOUT: All right, CNN's Steven Jiang live in Beijing. Thank you.

Now, I want to bring in Jeffrey Sachs. He is the director of the Earth Institute at Columbia University. Thank you so much for joining us

once again here on the program.

And first, I have to ask you about that news from China, from Xinhua reporting that China is indeed ending the one-child policy now allowing two

children per couple. I know you've lectured and talked about the policy. What impact will the end of the policy have on China and the world?

JEFFREY SACHS, EARTH INSTITUTE, COLUMBIA UNIVERSITY: This is obviously a very major policy change and big news. But I don't think it's

going to have a dramatic effect on the actual trajectory of China's population which, of course, is huge, almost 1.4 billion. And now more or

less stabilized.

As you just heard, even though now couples will be allowed to have two children, many are going to choose still to have one child. The fertility

rate is going to remain low in urban China, as it is in Europe and many other high-income developed countries.

So I think this is big news from a social policy point of view. But I don't think it's going to change dramatically the population dynamics in

China which are now for a stable population and then gradually for a declining population in later

decades, which is to China's advantage.

[08:05:32] LU STOUT: So, you don't think it is going to have that much of an impact on population numbers in China?

Now China is facing a number of challenges. Population density not so much

anymore. But pollution has been a major issue for China.

Do you think that the Chinese government is finally making pollution a priority, especially given its breakneck economic growth the last two

decades?

SACHS: China's air has become unbreathable and dangerous in many of China's big cities, and there are dozens and dozens of polluted big cities.

The Chinese leaders know this. For several years, including during the current five-year

plan, which is now going to be superseded by the next five-year plan next year, there's already a move to clean the air.

But the air is still very dirty. Both because of pollution and because of climate change, they have to get on a different energy course --

to get out of coal step by step and clean the air for safety and for well-being of the population.

So, I think it's quite real, Kristie.

LU STOUT: And the overall health of the Chinese economy, you recently said China risks repeating the mistakes of Japan in the late '80s and early

'90s. How so?

SACHS: Well, mistakes in a sense pushed off unfortunately often by the United States. When Japan was growing rapidly in the 1980s, the U.S.

said to Japan, stop all those export coming in.

The Japanese currency strengthened considerably. Japan's growth not only slowed, it really reached a crisis low level for a couple of decades

because the currency was overvalued.

I hope that China doesn't do the same, and I hope the United States doesn't try to push undue pressure on China's currency. My worry is that

Renminbi become quite strong in recent years. I think the Chinese currency is a bit

overvalued. There's been a slight depreciation this past summer. But I think more could be in store.

That's not a crisis. That's not drama. I just don't want the rest of the world, including the United States, pushing China so hard that the

growth drops abruptly.

And I think China has to be careful not to let its currency become seriously overvalued as the yen in Japan did.

LU STOUT: No crisis here, but as you point out, there are a number of risk factors. What do you think is the greatest risk, the greatest threat

to China's long-term sustainable growth?

SACHS: I think that the Chinese leadership understands a moderate course right now focusing on environment, on climate change, on keeping the

basics intact, and on integrating with the rest of the world. Look at how president Xi Jinping

has just returned from a remarkable trip to the United Kingdom and how China's reaching out to its neighbors throughout east Asia and southeast

Asia in its so-called one belt, one road policy of integrating the region.

I think it's smart policy, I believe, that China will continue to develop. And I think that's good for the world.

So, I think that actually while there are risks, the government is trying

to find that middle course right now, and that is a kind of a steady-as- you-go course, which I think is good for the whole world.

LU STOUT: Yeah, and the details of that middle course, the next five years beginning to leak out.

Jeffrey Sachs, thank you very much indeed for joining us and giving us your

thoughts of where China stands today and in the near term. Thank you, take care.

SACHS: Pleasure, thank you.

LU STOUT: Now, in just hours, talks are about to begin in Vienna. Talks on ending the crisis in Syria.

Now, the U.S. Secretary of State John Kerry is to meet with foreign ministers from several other nations including Russia, Turkey, and Saudi

Arabia.

Now, Iran and Iraq joined the discussion on Friday.

Now, our international diplomatic editor, Nic Robertson, joins me now from Moscow with more. And Nic, the U.S. and John Kerry in particular

really rallying behind these talks. Why is the U.S. intensifying diplomatic efforts to end

the Syrian conflict now? Does it have to do with Russia and its stepped up involvement?

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: Sure.

I mean, the United States has said all along that the solution in Syria needs to be a political one and it would like to be involved in that.

It has pushed for it. And we had talks in Geneva almost two years ago that were aimed at kind of kickstarting that kind of initiative.

It didn't get anywhere. A lot of the important players weren't there and weren't involved. Russia is very much involved now. Over the past

month, it's begun this air campaign inside Syria and is now backing it up with political initiatives, diplomatic initiatives, that have brought all

the significant parties now, because although Secretary Kerry will meet with his counterparts from Russia and Saudi Arabia and Turkey today,

tomorrow as you said you have the Iranians, you have the Iraqis, you have leaders from Britain, from -- or ministers from Britain, from France, from

Germany, from Italy, you have Gulf states represented: UAE, Qatar. You have Jordan there, as well.

So, you have a lot of the very significant players that have an involvement inside Syria.

The United States is one part of the driving force behind this, but I think you have to look at the moment and really say that it's Russia and

its military initiative backed up by this sort of push on diplomacy to find a political solution perhaps for its own domestic reasons, but also for the

Syrians, that sort of created the situation and the possibility of the talks we're in right now.

LU STOUT: Iran will be at the talks on Friday. Why is Iran now being seen as part of the solution to the conflict in Syria?

ROBERTSON: You know, Iran believes and we heard this from one of their senior military commanders early in the week that it own national

security, the words they use, intertwined with that of Syria.

Iran believes that it needs the support -- to support Bashar al-Assad. It has been supporting him financially since the beginning of this crisis,

militarily over the past few years. It's been calling on its allies in Lebanon, Hezbollah.

it's been pulling in Iraqi Hezbollah elements as well to come and join the fight to support President Bashar al-Assad.

They believe, Iran really sees, Syria as a linchpin to connect it through

to, you know, its allies in Lebanon, namely Hezbollah.

So, that's an important link for it. So what can be achieved if Iran is not at the table? Well, they would have a great opportunity to

destabilize anything that was agreed. So, this is important.

What -- where does everybody sort of come together? What points do they come together on? They come together on the belief that ISIS is

dangerous for Syria, dangerous for the region.

The other point that they come together on almost is that President Bashar al-Assad needs to be seen at there time as a transition figure to a

new political dispensation in Syria.

The question is how long is that transition? And Iran in this case is perhaps the one that would want to see Assad stay in that capacity for as

long as possible -- Kristie.

LU STOUT: It will be interesting to see how the issue plays out in talks in Vienna.

Nic Robertson reporting for us live from Moscow. Thank you, Nic.

You're watching News Stream. And still to come, Apple fans will soon be able to get their hands on the company's newest TV box. But will it

live up to the hype?

Plus, the gloves came off at the third U.S. Republican presidential debate. But the targets extended beyond the candidates.

(COMMERCIAL BREAK)

LU STOUT: Welcome back. The latest Apple TV is out on Friday. It includes a touchpad remote control with a microphone to talk to Siri. And

it also includes an AppStore.

But the new device is still just a box that plugs into a TV, not an actual

TV itself. This version, it's priced between $150 and $200, is also a lot more expensive than similar devices from Apple rivals.

Let's get more now.

CNN's senior media correspondent Brian Stelter joins me now live from CNN New York. Brian, good to see you. You have the device. You've been

testing it, you've used it. What is it like?

BRIAN STELTER, CNN MEDIA CORRESPONDENT: Yeah, I was unpacking it here, unboxing the new Apple TV. It becomes available tomorrow in retail

stores, it's also starting to ship to customers who ordered online.

You know, there's about 20 million of these hockey puck-shaped Apple TVs out there in the world right now. And famously, years ago, Steve Jobs,

the late Apple CEO, said Apple TV was a hobby, it wasn't core to the mission of Apple the way that iPods and iPhones are.

Well, that has clearly changed with new CEO Tim Cook and with his number two, Eddie Q, they're making Apple TV a core part of Apple's

mission. They say they're trying to revolutionize TV.

And with this new version of Apple TV, they're doing it by creating a Siri remote so you can talk to your TV by talking to your remote. You can

say, hey, I want to pull up News Stream, and it will pull the program up. And you'll also be able to touch the remote. So, you'll be able to use the

remote just like you use an iPhone, just like you use a phone and navigate using the touchpad.

So, those are the new features of the device. But ultimately, it still requires either Netflix or Hulu or a cable connection or something

else. Apple is taking steps toward revolutionize TV, but they're doing it while working with all these other services and networks.

LU STOUT: You know, Apple's tag line for this product is pretty bold calling it the future of TV is here.

And for a while now, Brian, everyone expected Apple to make a revolutionary TV. Is this a revolutionary TV, or just a better set-top

box?

STELTER: This is a better set-top box. This is a step toward the future of TV.

You know, people have been predicting a big screen TV set built by Apple. There's lots of reasons to think that Apple actually would not do

that, that it makes more sense for them to be creating new versions of this box instead.

But I interviewed Eddie Q, who is the head of iTunes and the AppStore and

all of the media relationships Apple has. I said to him, is the goal here to replace the set-top boxes that everybody who is watching us now has to

use to watch TV? And he suggested that that is the idea down the road. You know, right now, you still need a set-top box usually as well as Apple

TV. But he said down the road the idea is to continue to make Apple TV more and more important in your living room.

You know, CNN has a fantastic app on Apple TV, for example. ESPN has a fantastic app. Someday, a lot of analysts believe, Apple will try to

sell cable directly. So, you can send up for a bundle of channels including CNN straight

through your Apple TV.

Right now you can't do that, but you can sign up for Netflix and Hulu and those sorts of services through the Apple TV. So it does create an

easy way to connect to the wealth content online.

And I do think this remote control is going to be a big deal. The idea that you can talk to your remote control in order to pull up TV that

is going to be pretty compelling. We know lots of other devicemakers are working on that technology. But the way it works with Apple TV it is very

easy to do, very easy to use.

LU STOUT: Got it. Easy to use. It's an improvement, but the revolution not here just yet?

STELTER: Revolutions happen in stages, right, Kristie? They come one step at a time perhaps.

LU STOUT: That's right. That's right. It's a work in progress. Thank you very much.

Until the next iteration, we'll talk then. Brian Stelter there, thank you.

And do stay tuned to CNN for Brian's interview with Eddie Q of Apple in the next hour. Apple's senior vice president on Internet software and

services. He takes him on a hands-on tour of the new Apple TV, that's going to happen on World Business Today about an hour from now.

Now still ahead right here on News Stream, taking jabs at each other in the

media. We have a recap of the latest U.S. Republican presidential debate. Keep it here.

(COMMERCIAL BREAK)

[08:24:11] LU STOUT: Coming to you live from Hong Kong, you're back watching News Stream.

Now U.S. republican presidential candidates faced on and off a rather spirited debate in Boulder, Colorado on Wednesday night. It was meant to

focus on the economy, but candidates didn't always stay on message.

As John Berman reports, they took swings at each other and the media.

(BEGIN VIDEOTAPE)

JOHN BERMAN, CNN CORRESPONDENT: One stage, 10 candidates, a world of prickly, squirm in your seat tension.

JOHN KASICH, (R) PRESIDENTIAL CANDIDATE: Folks we got to wake up. We cannot elect somebody that doesn't know how to do the job.

BERMAN: John Kasich swinging at Donald Trump, who swung back.

DONALD TRUMP, (R) PRESIDENTIAL CANDIDATE: He was so nice. He was such a nice guy. And he said, oh, I'm never going to attack. But then his poll

numbers tanked, that's why he's on the edge.

BERMAN: Jeb Bush swinging and perhaps missing at his friend and one time protege Marco Rubio on the senator's spotty attendance record.

JEB BUSH, (R) PRESIDENTIAL CANDIDATE: When you signed up this was a six year term. And you should be showing up to work. Literally the Senate,

what is it a French workweek? You get like three days where you have to show up?

SEN. MARCO RUBIO, (R) PRESIDENTIAL CANDIDATE: I don't remember you ever complaining about John McCain's vote record. The only reason why

you're doing it now is because we're running for the same position and someone has convinced you that attacking me is going to help you. BERMAN:

Ben Carson against what he calls political correctness.

BEN CARSON, (R) PRESIDENTIAL CANDIDATE: They shouldn't automatically assume that because you believe that marriage is between one man and one

woman that you are a homophobe.

BERMAN: But above all, way above all, it was everyone hitting the media.

RUBIO: The Democrats have the ultimate super PAC. It's called the mainstream media.

BERMAN: Especially the debate moderators and the questions the candidates deemed confrontational.

UNIDENTIFIED FEMALE: Your board fired you. I just wonder why you think we should hire you now.

UNIDENTIFIED MALE: Why not slow down, get a few things done first, or at least finish what you start?

[08:25:05] UNIDENTIFIED MALE: Is this a comic book version of the presidential campaign?

TRUMP: It's not a comic book, and it's not a very nicely question the way you say that.

SEN. TED CRUZ, (R) PRESIDENTIAL CANDIDATE: The questions that have been asked so far in this debate illustrate why the American people don't

trust the media.

GOV. CHRIS CHRISTIE, (R) NEW JERSEY: Even in New Jersey what you're doing is called rude.

(LAUGHTER)

BERMAN: Republican National Committee Chair Reince Priebus agreed.

REINCE PRIEBUS, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: I think it was one gotcha question, one personal low blow after the other.

BERMAN: But beyond the umbrage perhaps a new trend in new faces. For long stretches the debate did not focus on frontrunners Donald Trump or Ben

Carson. An opening for Marco Rubio.

RUBIO: I'm against anything that's bad for my mother.

BERMAN: And Ted Cruz, who offered to patch things up with the moderators with now legal in Colorado products.

CRUZ: I'll buy you tequila, or even some famous Colorado brownies.

BERMAN: And New Jersey Governor Chris Christie much more central to the mix this time, again going after the moderators for the subject of

their questions.

CHRISTIE: Wait a second. We have $19 trillion in debt. We have people out of work. We have ISIS and Al Qaeda attacking us. And we're talking

about fantasy football?

(APPLAUSE)

BERMAN: And on a night where many thought Jeb Bush needed to break out, he spoke less than the other candidates, a performance that left some

cold, despite one hot offer.

BUSH: You find a democrat that's for cutting taxes, cutting spending $10, I'm give them a warm kiss.

BERMAN: And if some candidates did not leave wearing a warm smile, at least Governor Mike Huckabee left wearing something memorable.

MIKE HUCKABEE, (R) PRESIDENTIAL CANDIDATE: Donald Trump, he's a good man. I'm wearing a Trump tie tonight. Get over that one.

(END VIDEOTAPE)

LU STOUT: John Berman reporting.

Now, CNN is providing a reality check on claims that the candidates made during the debate from jobless numbers to women's wages to Trump's

history of bankruptcy.

We dig deep to find out what is true, what is false, and what lies somewhere in between. You can find it all at CNN.com/realitycheck.

Now you're watching News Stream. And still to come, smog caused by forest fires is blanketing much of Indonesia. And now officials there are

working on a fallback plan to get some people out of the danger zone.

(COMMERCIAL BREAK)

[08:30:42] LU STOUT: I'm Kristie Lu Stout from Hong Kong, you're watching News Stream. And these are your world headlines.

China says it will now allow all couples to have two children officially scrapping its three decades'-old one-child policy. Now, Beijing

had relaxed the policy back in 2013.

Now, U.S. Secretary of State John Kerry has arrived in Vienna for talks on ending the crisis in

Syria. He is to meet with foreign ministers from several other nations including Turkey, Russia, and

Saudi Arabia. Iran and Iraq are to join the discussion on Friday.

A jailed Saudi blogger is this year's winner of the European parliament's Saharov Prize for

Human Rights. Raif Badawi has been behind bars since 2012 for his online posts where he hosted political and religious debate and advocating

secularism.

A Saudi court sentenced him to ten years in prison and 1,000 lashes for what it called

insulting Islam.

Now his wife says Badawi is expected to receive the second 50 lashes soon.

Now, dramatic video of a landslide in northern Pakistan shows the sheer power of the earthquake that rocked South Asia earlier this week.

Now landslides have left many of the villages cut off from the outside world making it difficult for aid to be brought in. The quake killed more

than 360 people across Afghanistan, Pakistan, and India.

Indonesia's navy says it is preparing ships to get people out of areas affected by a devastating smog. Now the government says the severe haze

has contributed to the deaths of at least 19 people this year. David Molko has more from Indonesia.

(BEGIN VIDEOTAPE)

DAVID MOLKO, CNN CORRESPONDENT: This is the KRI Banda Aceh, one of three Indonesian navy ships moored here in Kalimantan (ph). The crew is on

standby ready to do whatever they can. And right now that includes being ready for potential evacuations of those hit hardest by the haze and the

fires. A last resort effort if conditions don't improve.

COL. EDI HARIYANTO, KRI BANDA ACEH COMMANDER (through translator): If there's no need for an evacuation of residents from the island, then KRI

Aceh is also ready to be used as a temporary shelter.

MOLKO: On board another navy ship, sick beds and a lung doctor at the ready. A handful of patients coming through in the last few days including

a baby. Government estimates put the number of those sickened by the haze at a staggering half a million.

More than 40 million people are still living in harm's way, and breathing in the toxic smoke for

weeks on end.

The Indonesian president has arrived back in the country after cutting short a trip to the U.S. His decision to head straight to some of the

worst affected areas in Sumatra indicative of just how serious this crisis has become.

Activists hope that the severity of the suffering will be a wake-up call to officials to take a harder line with those responsible for the

fires.

Meanwhile, some rain showers the past 48 hours have brought pollution levels down, at least for the moment, providing a glimmer of hope to

millions that desperately needed relief might finally be on the way.

David Molko, CNN, Benjarmacin (ph) Indonesia.

(END VIDEOTAPE)

LU STOUT: So is (inaudible) weatherwise and when? Well, CNN's meteorologist, Jennifer Gray, has been tracking the smog in Indonesia. She

joins us now with more -- Jen.

JENNIFERY GRAY, CNN METEOROLOGIST: Yeah, Kristie, he's right. They have had a little bit of rain. So, it has gotten a little bit better. But

long-term this probably won't start to improve until early 2016, because we're in an el Nino year, they have gotten less rain than normal and so

when the rainy season began, it looks like that's when we're going to have to wait to get any major improvement, unfortunately.

But those showers in the past 48 hours have helped. And with half a million people sick, any little help, of course, is welcome.

You can see the dense haze has improved. However, we are seeing moderate haze over much of Indonesia. And that's going to continue.

We have seen about 100,000 of these fires over the last couple of months. They peaked around July. However, 100,000 total. And so it's

just so important to try to get a handle on this since those farmers are doing this illegally.

So, this is from the 28th of October, yesterday. And you see moderate haze over much of the area. Southern sections, the air quality is much

worse, it gets better once you head up to the north. Singapore got a 56, which is considered moderate.

As we go forward in time, we'll see a couple of spotty showers. Nothing major. And that's going to continue for a couple of days.

The rainfall forecast is about 50 to 100 millimeters of rain. Some isolated areas on the west

side could get 150 to 250 millimeters.

But, Kristie, another reason this is so potent is because the way that these fires are burning, a lot of fires are under the ground. So, it's

making fire fighters -- it's making it harder to put these fires out. And they contain a lost methane, which far more potent than CO2. So, that's

making a lot of these people sick.

LU STOUT: Yeah. And thank you for the update. Jennifer Gray there reporting for us.

Now, Nepal's parliament has elected the country's first female president. Now she is Bidhya Devi Bhandari. She is the vice chair of the

ruling Communist Party. She was the defense minister from 2009 to 2011. She will be the country's second-ever president.

Nepal became a republic in 2008 after abolishing the monarchy which had held power for more

than two centuries.

Now, some people might think staring at your phone all day won't improve your social life. But Nintendo disagrees. I'll tell you how their

new smartphone game actually encourages communication.

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

Now, Nintendo is finally unveiling its first smartphone game. But if you're hoping for another

Mario, I'm sorry, this features another main character. In fact, it's you.

Now the game, it's called Miitomo, starring the avatars made famous by Nintendo's biggest hit in recent years, Wii Sports.

Now your avatar will get a chance to interact with other users in the came. And Miitomo will be free to play.

Now, this is part of Nintendo's new strategy to tempt smartphone users into buying more of its games and systems.

Now, I spoke to Rob Fahey, he's a columnist for Gamesindustry.biz a short while ago about Miitomo.

(BEGIN VIDEOTAPE)

ROB FAHEY, GAMESINDUSTRY.BIZ: Miitomo is essentially a social smartphone game. It takes the Mii characters, which are the avatar

characters that were very popular on the Wii console and on the 3DS console since then. And it essentially puts them into your

smartphone and allows them to interact with your friends' avatars, with other people's avatars in a

social context.

So, it's a game that's not so much about fighting or exploring as it is about socializing and discovering things about the people around you.

It's an idea that's actually worked quite well for Nintendo with audiences outside the core gaming audiences in the past.

LU STOUT: But why is Nintendo releasing Miitomo, this brand new franchise in mobile, and not its most franchise, Mario? Why is it holding

back?

FAHEY: I think a lot of people are asking that question. I think that question is exactly why their stock price fell today.

People expected to see the biggest Nintendo franchise go straight out on mobile. And I think the reason is that they don't want to get their

biggest franchises wrong. Nintendo doesn't have experience with mobile. And it's a difficult platform to make game for than something like a Wii or

3DSconsole.

They want to make sure that they're absolutely straight down the line great at making mobile games before they commit their biggest franchises to

it.

And it is important to realize the sheer scale of the franchises that we're talking about. Something like Mario is a 30-year-old franchise that

has made enormous amounts of money every year during those 30 years. The same applies to a game like Zelda. This is comparable with a Disney

franchise, or a Marvel, Star Wars, in terms of the income it represents. They don't want to get that wrong. They don't want to cheapen that

franchise by putting out a mobile title that doesn't live up to it.

LU STOUT: And give us the big picture for Nintendo, because it seems to be a conflicting one, because on one hand it is very late to the

smartphone market. The markets don't like it when they say it's all about mobile. And yet on the other hand, it still sells tens of millions of

games on its platforms.

So, where does Nintendo stand now? And will it return to its glory days of gaming success?

FAHEY: I think that where Nintendo stands now is in a classic situation of the innovator's dilemma.

Nintendo does extremely well out of its existing platforms, even though it's install base lags a long way behind Sony or Microsoft, it sells

enormous numbers of games. It sold 30 million games of the first six months of this year. It's doing really remarkably well in terms of profit

from those platforms.

And that makes it hard to commit to a move to something that could be disruptive. They don't want to slaughter their own golden goose.

They do recognize within the company that they're not doing as well as they did in the era

of the Wii. You know, the Wii sold over 100 million consoles worldwide.

Their current platform the Wii U is going to struggle to reach one- tenth of that. Realistically they know they have to move to mobile, but they want to make sure that they do that in a way that leaves them with a

strong console space.

I think one of the things they always have in their mind is particularly their handheld consoles, you know, the Gameboy first, then the

DS and the 3DS, these are consoles which very often are very popular with families. People will give these to their children as gaming platforms

because they feel safe and confident about the content that their children can access on them. They don't feel that confidence about a smartphone.

And Nintendo doesn't want to end up a situation where they're essentially turning around to people and saying, nope, smartphones are the

future. This is what you need your children to have.

(END VIDEOTAPE)

LU STOUT: And that's why it took so long for Nintendo to embrace the mobile platform. That was Rob Fahey, columnist for Gamesindustry.biz

speaking to me earlier.

Now, the Miitomo will be out March of 2016. And it will be one of five Nintendo smartphone titles due out next year.

And that is News Stream. I'm Kristie Lu Stout. But don't go anywhere. World Sport with Amanda Davies is next.

END