Nintendo Switch musings

Entry posted by EricBall January 18, 2017

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Poor Nintendo, their idea for a home video game console which can also be used as a portable video game console became a portable console with removable controllers which can be plugged into the TV.

From my perspective, Nintendo has two overwhelming challenges when creating a new console:
1. Not understanding their historical successes.
2. Competition

First, I don't think anyone at Nintendo understands the reason the Wii succeeded was because it was often purchased as a fitness accessory. People got suckered into thinking Wii Sports (and later Wii Fit) would provide some kind of health benefit. As per https://en.wikipedia.org/wiki/List_of_best-selling_Wii_video_games four of the top ten games (five if you include Wii Sports, which was a pack-in outside of Japan and South Korea) are movement games. And the number of copies sold drops of pretty quickly - only 1 in 8 Wii owners bought Super Mario Galaxy - the 8th top selling title.

Success of the DS line has more to do with continued dominance of the GameBoy line and lack of significant competition than anything inherent to the design.

IMHO success of a console depends upon the following:
1. There has to be a reason for someone to buy the console in the first place - i.e. a must-have system exclusive game.
2. Once people have purchased the console, there has to be a library of games they want to buy.
3. There has to be enough people owning the console and buying games for publishers and developers to justify spending money to make games for the console.

When a console is successful, #3 drives enough games for more people to buy the console and buy new games, forming a positive feedback loop. Not enough "system sellers" or a large enough library and there's no reason for people to buy the console in the first place. Similarly, if not enough people own the console or owners aren't buying new games then publishers and developers aren't going to risk the money to develop more games.

So in order to start that positive feedback loop, a console either needs an overwhelming must-have game (e.g. Wii Sports) or a deep launch lineup. (Having more titles in the pipeline also helps maintain the initial surge.) The DS succeeded partially because it could play GBA games (which could play GameBoy games). So people could justify buying a DS (or 3DS) because it had a huge library of games when it was introduced.

But even with a decent launch lineup the Switch would need to overcome challenge #2 - competition. And the Switch is facing more competition than almost any prior Nintendo console because it has competition on two fronts, which I'll term "high fidelity" and "low fidelity".

The High Fidelity competition are the other home consoles - Xbox One / PS4 and gaming PCs. This is where a lot of traditional AAA games land. However, Nintendo hasn't competed in this space in years, other than a few ports of multi-platform games. So it isn't like Nintendo can call up Tim Willits at id Software and get him excited about creating an exclusive title for them based on prior success. And while there was some suggestion the Switch would be on par with the XB1/PS4, this clearly isn't the case. So there's really no hope for Nintendo to win this battle unless it can get enough people to buy the Switch on it's merits as a portable - which is where the Low Fidelity competition comes in.

The Low Fidelity competition is with smartphones, tablets, and browser-based gaming. These competitors didn't exist when the NDS came out and they have three main advantages over a traditional portable console:
1. Platform independence - it doesn't matter whether you have a Samsung Galaxy tables, an HTC phone, or an iOS device - you can play a giant library of games on it and what games isn't dependent upon the device you have.
2. Everyone has one - people don't buy smartphones, tablets and computers just to play games - they have other purposes which means people can justify the cost of the device. Then once they have the device they have access to the library of games.
3. Low cost games - Even without the "free to play" model, even the purchased premium titles are priced below all but the cheapest bargain bin games for traditional consoles. And the "free to play" model lowers the barrier to entry even farther.

This competition is really hard to overcome as it puts a lot of economic pressure on the consumer and makes it hard to justify investing in the Switch - paying $200-300 for the console to be able to play the few top quality exclusive games at $50 a pop.

So what's the alternative? I think Nintendo needs to focus on making great games, not on making unique hardware. They can bring that kid & family friendly gameplay to other platforms. Start with the XB1 and PS4 instead of trying to figure out the "free to play" model. Focus on great gameplay, although I'm sure the development teams will be overjoyed not to be constrained by underpowered hardware.

Another possibility is to become a publisher. Use some of that war chest to fund development teams and bring their games to market.

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Nathan Strum 11,921

Posted January 20, 2017

Great write-up. Nintendo seems to be lost right now.

They would do much better to abandon the hardware market entirely, and just publish software. They could even make goofy controllers and peripherals for other consoles if they wanted to still try and innovate.

I guess they weren't paying attention to the Vita. Or the Wii-U, for that matter.