Why The Nintendo Switch Makes A Lot Of Sense

 

It’s quite easy to talk about the Switch, it’s hybrid concept and indeed, about the potential hardware inside the machine.

For the moment, I’d like you to put that aside. Lay down your fanboy hearts and minds, and take a deep breath because I’m going to drop some surprising numbers on you. For all the talk of the Nintendo Switch, and its relationship with the Wii U (an unavoidable distinction, granted), we end up ignoring the bigger picture and it’s often the bigger picture that provides us with a more interesting perspective. The following numbers are based upon both factual data and, in a couple of instances, assumed figures because in the case of the Vita and XBox One, Sony and Microsoft respectively have decided it’s not worth reporting on those numbers. You’ll understand why soon.

Anyway, let’s take a look at the major players on the market and their sales figures;

  • Nintendo – 13.36 million Wii U consoles / 61.37 million 3DS consoles / 74.73 million overall (based on September 2016 numbers)
  • Sony – 50 million PS4 consoles / 14 million PS Vita consoles / 64 million overall (based on December 2016 reports and estimated Vita sales)
  • Microsoft – 24.58 million XBox One consoles (Based on anticipated sales via VGChartz)
datagraphhardware

Image via Statista

 

If you conflate both the home console market and the handheld console market, you end up with Nintendo sitting 10 million units ahead of Sony. Now, stop rolling your eyes because I know what you’re thinking. Why on earth do that? Isn’t this just fanboy talk to justify Nintendo as still relevant? You may have a small point, but it demonstrates that in the market – Nintendo still remains a strong competitor, just on a different arm of the industry. To deny such is to ignore the data, and when you ignore data to make a point, well… that’s what fanboys do, isn’t it?

But in truth, it’s these numbers which pose the very underlying point of the Nintendo Switch, in my mind.

If you combine these figures, Nintendo is comfortably ahead of its nearest rival Sony. But, of course, we rarely do combine these sales figures because… well… we don’t. We like to make the distinction between Home and Handheld Console because we often think of them as completely independent markets. In the home console scene, Nintendo has taken a battering the last few years – but at least Nintendo still reports on its sales figures, unlike Sony who haven’t reported on official Vita sales figures since 2012, where Sony took the beating this generation. Both companies are dominant in different fields of arguably the same market, but we prefer to see Home Consoles, rightly or wrongly, as the standard in which a company is judged. This is a problem, and there’s really no good solution, or at least there wasn’t.

Enter the Nintendo Switch and its Hybrid Console Ethos.

This may arguably be more pitched as a handheld console, as this would logically be the right sort of time to drop a new handheld console generation – but it’s clearly more than that. With the failing of the Wii U and the 3DS coming to the end of its natural commercial lifespan, Nintendo is in the right place to drop something like the Switch from a business standpoint. If you need to replace both your home and handheld consoles at the same time, surely the sensible move with current technology is to wrap both of them up into the same package? It saves costs, saves on research and development and most of all is better for the consumer, who only needs to buy the single device compared to two separate devices, as well as only one version of a game rather than two distinct entities.

It also means Nintendo can solve that thorny issue of the market being more interested in home console sales figures.

After all, if you had a massively successful and dominant part of your company but all the press did was talk about the arm that wasn’t selling very well, you’d think there was some perceived bias going on, wouldn’t you? After all, if your rivals are having their success reported whilst the media arguably ignores their big failure, you’d think something was really rather fishy underneath it all. But Nintendo couldn’t find a way to change this – not with great video games and not with good deals. Which must be terribly frustrating for their marketing department; no-one cares what they’ve done right with the Wii U, they’re only interested in the twenty-five year long circle-jerk that is “Nintendoomed”.

And after the reality-altering paradigm shift that was the Wii and the DS in Generation 7, which they all predicted would flop (and together shifted more than 260 million units combined), it must be nice to finally have that thing you’ve been saying over and over again for two and a half decades finally proven right. Well, at least on one arm.

In truth, companies do combine the sales figures internally because it all gets taken into account in their annual fiscal reports. It’s quite important to retain perspective even in the toughest of times; keep remembering you’re doing something right, and with Pokémon Sun and Moon already on course to break sales records for the series and become one of the most successful games of the last four years – Nintendo clearly can’t deny that the 3DS, in its twilight days, has been a source of comfort and revenue.

The Switch by the nature of its concept is poised to do this naturally, and that’s arguably one of the strongest moves Nintendo has played in years. It also has other considered benefits for both Nintendo and its third party support network.

For a start, the nVidia hardware powering the Switch is a known quantity; for the first time in a long time, Nintendo hardware won’t need to have exorbitant time or expense lavished upon it in order to adapt to its inner quirks. nVidia themselves are also known for supporting those working on their own hardware, meaning that third parties have two companies on which to draw upon in coming to grips with the Switch. That’s a strong support network and if Nintendo focuses on firmware and software support whilst nVidia focuses on their hardware support, you’d end up with an enviable safety net for developers.

It also means lower development costs. One of the most ignored stories of our generation is that we have lost an estimated 80% of our markets developers in four years, almost exclusively due to lack of funds. Making video games now costs an exorbitant amount of money, and whilst the Switch hardware may be relatively modest when compared to high-end tablets, this also means that developers should be able to make games for it without worrying about their budget spiralling out of control. Easier to use hardware with good middleware support and a strong support system won’t magically reduce costs, but it will certainly ease concerns and help things from getting financially out of hand for third parties.

For Nintendo, it also means reduced marketing costs. Rather than working on two different fronts, with different degrees of success, this can finally be unified into one cohesive whole and whether or not it succeeds, it will certainly save them some much-needed cash in the long term. Plus third parties only really need to consider development for one unified system, rather than worrying about dividing their attention between two vastly different sets of hardware – a problem both Sony and Microsoft will face up to in the coming years, and one which Nintendo arguably already faced with the 3DS and the New 3DS.

It also gives Nintendo stronger leeway into mobile markets; in Japan, where 3DS sales recently overtook PS2 sales figures. In China, where handhelds and mobiles are just the norm. And in the USA and Europe, where the Smartphone market has expanded so much that it now eclipses the console industry. The market has already changed; Nintendo is arguably just following them, and with the success of Pokémon Go and Miitomo (and sort of Super Mario Run, even if people don’t like paying money for it), it’s arguably a sensible move.

Not that the Switch is going to have it easy.

The problem with combining those sales figures is that it doesn’t take into consideration households that have both units. In a market where sales figures matter more than household count, that’s an inevitable issue, but it means that pitching on an assumption of 74.73 million units ignores those with both units. So the actual targeted market could be smaller – though admittedly even if you assume all Wii U owners have a 3DS, that’s still more than sixty million people. A far cry from the hundred and fifty million former DS owners, but not an insignificant figure either.

It also has to get beyond the current media trend to just mercilessly beat on Nintendo for… well… any reason at all. The Switch hasn’t even officially been detailed and many big (and formerly-big) gaming publications are already doing their damnedest to kick Nintendo in the nads. Whilst the press should realise that this generation has been a massive cesspool of fail for the console market and that we need all three companies to do well in order for any new growth to be achieved, it’s still got to somehow undo more than two decades of inherent bias against it, and that’s something it hasn’t accomplished to date so expecting the Switch to miraculously change this is akin to expecting your favourite Hollywood actor/actress to turn up at your door on a wet and stormy night after a mysterious instance with clothes-eating bats.

Plus it’s never a good idea to plan out a consoles trajectory. Before Gen-7 started, EuroGamer ran the headline “Nintendo Concedes Defeat” in regard to the Wii, and the press still soundly mocked the DS for its touchscreen. It was assumed the PSP would beat the DS, and even analysts though the Vita would run rings around the 3DS. We were expecting a much stronger generation this time around too – perhaps blindsided by the rise of the PC Gaming scene coupled with the unabated growth of the Smartphone market, we assumed after 260 million+ home console sales in Generation 7 that we’d see a repeat performance. Perhaps we thought the home console was unassailable. Too big to fail, even. Not thinking overall, after four years, we’d still not have breached the hundred million mark on home consoles. This generation in particular has demonstrated how unpredictable the video game market truly is – I mean, hell, Street Fighter 5 sold 1.4 million in its opening (a bit of a disaster) and then less than 100,000 between May and September, and for a brand as identifiable as Street Fighter, you’d never expect it to fall that flat. Big franchises are struggling to match figures of years gone by.

What the Switch is and does may have end benefits for the consumer, but first and foremost it’s about transforming Nintendo, and making life easier for itself and third parties. It’s about unifying sales figures, about reducing costs and ultimately about trying something different out, and if the Switch succeeds – be acutely aware Sony and Microsoft will be moving into hybrid consoles in the coming years, because they’ve never been above stealing Nintendo’s good ideas (or their bad ones for that matter). And that’s no bad thing or backhanded compliment; competition for a newly-developed hybrid market will help propel hardware advancement in the same way the Smartphone market saw exponential generational improvements in seven short years. Heck, maybe finally more investment will be piled into battery life development, which is currently the main limiting factor in any handheld device. More research and development into this new scene should vastly improve it over the next decade, and we should all hope the Switch is the catalyst as a result. Who wouldn’t want a higher-powered handheld/home console hybrid? Well, it all has to start somewhere.

It’s a brave new frontier, and like always Nintendo is staking its claim very early on. Regardless of what happens in the next year or so, the Switch is an example of a company coming to grips with itself and the state of the market, and thinking of clever ways to bridge those gaps. It’s the perfect opportunity, the right state of the market coupled with a company perfectly poised to replace two parts of its hardware existence. People think Nintendo is forcing this – my take, I think it’s the exact right time to force it. The console market is at its weakest in twenty years, perhaps even thirty years, perhaps because there has been on obvious improvements in anything but visuals in a decade. Obvious joke incoming…

vaasfc3

Something something definition of insanity.

With the zenith reached in Gen 7, the market has radically altered. Hardware has changed, with far more investment now going into mobile technologies. And now we’re all playing catch-up. Nintendo is just the first of the big three to start adapting to a very different market, and whether that’s through good analysis or just because it had no other choice in the matter is an issue for a few years down the road when we have a far firmer grasp on the successes and failings of the Switch as a machine.

Now it’s up to Nintendo and nVidia to push the Switch and see how far it goes.

Based on public reaction so far… I don’t think it’s going to be too hard a sell.

You can leave a response, or trackback from your own site.

Leave a Reply

Powered by WordPress