Nintendo’s big bet

The new Switch is a cross between a traditional console and a Game Boy

Nintendo’s new console is like if Game Boy and Wii U had a baby

A decade ago, Nintendo got legions of people up off their couches to play video games when it introduced the groundbreaking Wii console. The company sold 100 million units of the gaming console over six years, but the sequel, the Wii U, was a major flop, selling just 13 million units since it debuted in 2012.

Now Nintendo is launching another radically different gaming console, called Switch. And this time, the idea is to sit, but sit anywhere — on a couch, on a plane, in a park, at a party. That’s the message conveyed in the first video showing off the new device.

The Nintendo Switch console is a tablet that sits in a dock and works just like a traditional console at home. But when you want to move, you simply pick up the tablet, attach the unique Joy-Con controllers, and take it with you.

Think of it as a cross between a traditional console and a Game Boy, an approach that seems promising considering the Game Boy and the DS handhelds have sold in excess of 100 million units each. But the company will need to work hard to explain to gamers how the system works, something it completely failed to do with the Wii U, which had multiple screens that caused confusion.

The success of the Switch will depend on Nintendo’s “ability to market a clear use case message to the audience,” Piers Harding-Rolls, an analyst with IHS, told VICE News.  “Nintendo failed to do this with the Wii U and paid the price.”

The new console won’t go on sale until March, and we don’t yet know how much it will cost or what what games will launch with it (though we do know that Mario and Zelda are coming). And we know that Nintendo really needs the Switch to be a hit.

While the success of the Pokemon Go mobile game is giving Nintendo at least the perception of relevance (the game is actually owned by Niantic Labs), the Wii U flop allowed its console gaming business to be destroyed by Sony’s PlayStation and Microsoft’s Xbox, which have sold 50 million and 30 million units, respectively.

It will be interesting to see market reaction to Nintendo’s announcement, but the Tokyo Stock Market was already closed at publication time, so we’ll have to wait until Friday morning to get a full response. On Thursday’s news that Nintendo was going to unveil the Switch, the company’s share price jump as much as 4.5 percent before closing up 3.3 percent at the closing bell.

The failure of the Wii U led the company to reassess its business model, and for the first time ever it has started creating games for smartphones. Following the launch of the social game Miitomo, the company and analysts expect big success with the launch of Mario December (20 million people have already signed up for the game before it is even available). It has signed a deal with Japanese mobile gaming company DeNA to produce another three games based on Nintendo characters.

However, if the Switch console fails to compete with the PlayStation and the Xbox, the company will have to reassess again. “Another flop in launching new hardware should be a sign that Nintendo is better off providing its rich game-title franchises to smartphones, Sony, and Microsoft,” Serkan Toto, a Tokyo-based game consultant, told the Wall Street Journal.

 

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