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Nintendo Switch: Destined for greatness or one last roll of the dice?
Even by the video game industry’s hyperactive standards, it has been a topsy-turvy six months for Nintendo. The Japanese gaming giant is preparing to release its latest home console, the Nintendo Switch, shortly after its first successful foray into smartphone games.
Super Mario Run, which was released on the iPhone in December, has been a relative success, downloaded over 80m times and making Nintendo more than 6bn yen (£42m), but the backdrop has been a fluctuating share price and a company in transition.
The Kyoto-based firm is one of Japan’s biggest and oldest corporate names, and has always ploughed its own furrow, almost obstinate in its refusal to follow industry trends. Where its competitors look towards technological strength, Nintendo has revelled in the physicality and playfulness of video games, creating beloved characters such as Mario and Donkey Kong and producing idiosyncratic hardware that can divide as much as it delights.
Unfortunately for investors, profits have been equally idiosyncratic.
The Wii console, released in 2006, innovated with its wand-style motion controller and was a roaring success, selling over 100m units and introducing gaming to a new audience. Its successor, the Wii U, came equipped with a tablet-style controller and flopped; mixed messaging and a sparse games library contributing to dire sales.
In 2012, the company recorded the first loss in its gilded history, and its performance has fluctuated since. After the death in 2015 of president Satoru Iwata, only the fourth boss in 126 years, shares never recovered to match the Wii’s peak a decade ago.
The Switch is the chance to galvanise Nintendo’s home console market – some say the last chance – and comes with a clear elevator pitch. It is a hybrid of home and handheld console, a tablet-style device that can be displayed through your television or taken out to play on the go.
“Certainly in the Wii days, Nintendo had a broader audience that responded to the uniqueness of the system,” says Shinya Takahashi, director at Nintendo and general manager of planning and development. “When we started thinking about how to communicate the benefits of Nintendo Switch and improve the experience of what Wii U offered, I think we really zeroed in on this notion of the freedom to play anywhere with anyone at any time, and that became a very simple and concise message.”
To facilitate this, the Switch is played with “Joy-Con” controllers, unique motion-detecting devices that can be snapped together like a traditional pad or used independently, allowing players to hand one over to a friend for multiplayer gaming.
This flexibility is the Switch’s selling point, but it does come at the cost of technical grunt. The console’s innards are less powerful than Sony’s PlayStation 4 or Microsoft’s Xbox One – an approach that has long been Nintendo’s direction; its legendary designer Gunpei Yokoi had a philosophy of “lateral thinking with withered technology”.
This comes with the expectation that Nintendo’s consoles cost less than the competition, but when the Switch goes on sale in March, it will sell for £279.99, a price many consider too expensive and beyond the reach of the more casual gamers who have made up Nintendo’s base.
Takahashi defends the price. “I think different people have a different sense of the value of the system. While we’ve heard some folks respond that way, there are certainly people that look at Switch the different types of play that it offers and they feel it is a suitable price-point.”
“When we talk about the Joy-Con, it’s important to convey that in this very small size and low-weight piece of hardware, there are a lot of different components,” adds Yoshiaki Koizumi, deputy general manager of entertainment planning and development. “Many were very important to allow people to experience the different play-styles. So for those who are making these types of judgments right now, I’d really like them to have the opportunity to experience the console and to start thinking about the value of these experiences rather than some of the other factors like power.”
There has also been some concern about the Switch’s line-up for day one, a charge that partly sank the Wii U. Nintendo itself is releasing just two games at launch: fantasy adventure The Legend of Zelda: Breath of the Wild and 1-2-Switch, a mini-game compilation that demonstrates the different facets of the Joy-Con. However, a steady flow of release scheduled for the rest of the year, including a new Mario title, should give the Switch a healthier look by Christmas.
It is unusual to see a new games console released so early in the year and in defiance of established practice. Nintendo worked backwards to settle on the March release.
Nintendo is hoping that early adopters and this steady stream of releases will drive word of mouth in time for another big push for Christmas. It is a somewhat risky strategy, but there is the impression that Nintendo needs to continue doing things differently in order to make Switch a success.
However, it seems this time Nintendo is less oblivious to the market it finds itself in. The Wii U’s dismal showing was blamed not only on its own shortcomings, but also the rise of mobile gaming, with titles such as Angry Birds and Candy Crush Saga muscling in on Nintendo territory.
Belatedly in some eyes, Nintendo has taken the decision that if it can’t beat them, join them. Before Iwata’s death, the company agreed to make smartphone games, and with titles like Super Mario Run, it is leveraging the ubiquity of smartphones to drive its own famous franchises.
The games stand alone but are produced with the hope that new players will be enticed towards Nintendo Switch for the full-fat gaming experience. Nintendo has already reaped the benefits here, with the enormous success of last year’s Pokémon Go app boosting sales of the new Pokémon games for Nintendo’s 3DS handheld console.
Either way, the smartphone is now very much part of Nintendo’s wider plans and infrastructure, and will play a part in the Switch’s new paid-for online service – another revenue stream that Microsoft and Sony have employed to great success.
“We like to think of Switch as working very well together with smartphones so we’re basing quite a few plans surrounding that,” says Koizumi. “Because this is a device almost everyone has, we think that there is a very broad reach for this service. I think it’s a unique approach that people haven’t seen yet.”
While Nintendo is still keeping details of the service under wraps (another decision making investors and customers twitchy), one example is that you will be able to voice chat with other players in your game via your phone rather than a separate headset.
Nintendo’s more holistic approach with the Switch, tapping into other markets and devices that people already own, is somewhat uncharted territory for the company.
Yet its unique sparkle remains in the Switch’s playfulness and versatility. With many predicting that this is Nintendo’s last roll of the dice in the hardware business, the company will be hoping this is the winning combination it needs.