Does the Switch success actually hurt Nintendo?

Right now the entire internet, at least the segment of the internet that pays attention to video games, is paying close attention the Nintendo’s newest gadget, the Switch. I have to say since November when they first showed off what the Switch was capable of I have been taken in. Full disclaimer, I love Nintendo and I typically do buy their machines. But I can safely say my buying habits do reflect the larger gaming audience as a whole so I will use that as a measure to make my point.

Each subsequent home console generation from NES, to Game Cube, Nintendo seems to lose some of their market share. As I have previously pointed out, while their home console base has shrunken over the years, their overall base has grown, partly because they have continued to find success in their handheld divisions. They had 1 outlier, the Wii, which was the first time they not only increased sales, but surpassed their previous record holder, the NES. This was a big deal for the industry because it proved that Nintendo’s philosophy they weren’t competing directly with Sony or Microsoft could be true.

Here is where my question comes into play. I already assume the Switch will be a success because it combines the handheld market with the home console market, obviously that is part of the draw. The reason that could spell success is not because you can take the home console games on the go, that IS NOT a new concept there have been plenty of other systems that did just that. The first notable one was the Turbo Express which let gamers play their Turbografx-16 console games on the go. Then there was the Sega Game Gear which had a converter that allowed you to play Sega Master System games on the go. This was followed by two more portable home console devices from Sega, the CDX which was a sort of, portable Sega CD player, it could connect to a portable screen if you had one, and the Nomad a truly portable Sega Genesis complete with 6-button layout.

Then there is the reverse, which has many gamers also excited, playing portable games on the big screen. This has a big draw because hand held games tend to be reminiscent of retro or classic games. Typically handheld machines were running on last gen hardware or two gens back. The Game Boy was sort of NES hardware and was released during the NES lifespan, but it was black and white only and ran on a much smaller resolution, so compromises had to be made. Game Boy Advance, released at the same time as the Game Cube, PS2-era power, was basically running on SNES levels of power with slight tweaks. Even the Nintendo DS, released just before the Xbox 360-era, was running on essentially N64 hardware in portable mode. This is key because to keep costs down developers have had to make compromises. This means that mobile games running on Switch don’t have to be targeted towards lesser hardware, but they can be tweaked for the mobile experience. I suspect Switch will attract those typical mobile and handheld games that have made past Nintendo handhelds so popular among their target audience. But again playing mobile games, or handheld games, on the big TV is also not new.

In the mid-90’s Nintendo themselves first dabbled in putting portable games on the TV via the home console, they did is with the Super Game Boy cartridge that ran on SNES hardware. They perfected this in the Game Cube era with the Game Boy Player which ran the ENTIRE Game Boy library ranging from Game Boy, Game Boy Color and the then current Game Boy Advance. Sony has even found some limited success with this by putting TV outputs as an option on their PSP and PS Vita devices, especially if you look at the PS Vita TV. So putting portable games on the TV is nothing new, and taking the home console games on the go is nothing new, then what does excite people about the Switch?

This is where it gets messy for Nintendo. Most gamers are banking on the Switch being IT from now on. The belief is Nintendo will merge their portable and home console divisions into a single development platform, they have already stated this as having been done. The reason this is exciting is simple. If you look at a Nintendo release schedule in a given year, they make a TON of great games and attract a TON of great 3rd party and indie support. They do, just not on a single machine. If you divide their handheld and console into TWO machines, releasing separate games and having two divided release schedule you force gamers to make a choice, buy the less expensive, lower powered portable expecting it to have the games that will satisfy you. Another option that fewer people have been making, buy the home console machine for the grander experiences and sit through long periods of droughts with nothing to play. The third option, something fewer people do but what Nintendo really loved, buy both systems to get the entire library. This is key because typically, or traditionally that is, the portable games differed greatly enough from the console games you really had to chose which experience you preferred. Starting with Wii U Nintendo began merging the two libraries. First instead of releasing separate versions of some games, a home versions and a scaled down entirely different portable version, like Super Mario World vs. Super Mario Land, Donkey Kong Country vs. Donkey Kong Land, Kirby Adventure vs. Kirby’s Dreamland, etc. This time they gave you ONE game and released it on both systems. They did this with Super Smash Bros., NES Remix 1 and 2, Super Mario Maker, and a host of others. Another reason the Wii U failed was the library was too similar to the 3ds, which was selling much better and had far superior support. Super Mario 3D World didn’t really offer much different of an experience as Super Mario 3D Land.

So what happens if Switch just gets ALL the games going forward does that automatically mean it will get ALL the gamers going forward too? Here is my pause for concern. If you take this through logically it can mean only 1 thing. Nintendo has basically given up on the true home console market and doubled-down on the portable scene. Their hedging their bets on a dedicated portable machine that can connect to a TV. A few years ago I suggested Nintendo should just make a gaming tablet that used real buttons on the sides and could connect to a TV via HDMI out and I was called crazy for that. My logic was Nintendo’s consoles suffer from lack of releases because Nintendo cannot support two machines, they do not have the resources, money, man power, tools, etc, to do that. If they had all of their teams making all of their games for one system, then they will have the BEST software library in the world and could dominate the gaming industry. They did this twice before, the first time was with NES, they had 90 percent of the entire gaming market during those years. Granted the market was smaller and vastly different then, they dominated because they had so many great games on the system. It was beginning with SNES they had to split their attention between developing games for two machines. It wasn’t as noticable then because the Game Boy was basically just a watered down NES, they could get their summer interns to port NES games down to the Game Boy while sparing a smaller team here and there to pad the schedule with original games. If you look at the classic Game Boy library it really was just an NES port machine those first few years. Even if Super Mario Land was a truly original game, that was about it, and even that was very small scale compared to their console games. Also console games didn’t require as much of an investment to make.

This split wasn’t really noticeable until the N64 and Game Boy Pocket years. This was when Pokemon gave the Game Boy line a second life, remember Nintendo’s intention was for the Virtual Boy to replace the Game Boy, when that failed to take place they scrambled to double-down on saving the Game Boy to stay in business. Then N64 games took a much larger level of investment and a longer time and manpower commitment to get made. They were GRAND, they were large, epic masterpieces, for the time, that rivaled the games Sony and friends were making. The problem was they took so much effort to develop instead of having 7 teams working on 5 console games and 2 portable games, you had 2 teams working on 2 console games and 2 teams scrambling to work on 1 portable game. These numbers are not exactly literal, I don’t know the inner workings of Nintendo, but I DO know from reports at the time and talking to developers over the years, they did consolidate teams and if you read the end game credits you start to see proof of this. N64 was desperate for games so Nintendo handed out licenses to so many partners to help out, which is why you had Rare, Hudson and even Midway making games for Nintendo using their characters, they had no choice they were understaffed and over worked. Thing’s only slightly improved with the Game Cube, droughts were less common partly because Nintendo designed the Cube with their developers in mind, to make developing as easy as possible to streamline the process, they also purchased some new developers to pad the schedule and reached out to even more 3rd party partners to get Nintendo games made using their characters but made by other companies. This time they had Namco and Sega and even Square and Capcom helping out. This was even noticable on the portables when Nintendo handed their most prized IP, the Legend of Zelda, over to Capcom! This was all proof Nintendo couldn’t make enough games to support their systems by themselves.

The issue came about as console sales declined, they couldn’t continue justifying paying developers for support and as costs increased due to going HD and games becoming more complicated and advanced, developers had to be more cautious where they put their money. Again it takes even more resources to make games in HD than SD, even the same exact scope of a game, so that is where Switch comes in.

IF Nintendo can once again consolidate all of their teams to making games for just a single machine, effectively killing off the home console division and merging the two into a single portable first with TV play as an option, then they have succeeded in solving their BIGGEST issue, release droughts. Even now the Switch is seeing fewer games up front than Wii U did, it does have more games announced and in development then Wii U did during the same time frame and from the looks of it, many more 3rd party partners are on board. The key is portables sell better and are easier to develop for and don’t directly compete with the other home consoles, so this allows Nintendo do finesse developers to make games locked to a console, say an exclusive like SF5, because if the contract says console exclusive they could argue Switch is not a console it’s a portable, they have done this in the past, Sony and Microsoft have allowed their games to be released on Nintendo portables at times neither of them had portables in the market. Sony moved away from this once PSP and Vita came along, but even companies that never make games for the home console, still make games for the portable because 1, its cheaper, and 2, the sales potential, thus profit margin, is greater.

In the short term this could spell great success for Nintendo, a unified machine that does everything, gamers have been wanting this ever since PC gamers got their wish with the coveted gaming laptops and even the rise of gaming tablets. This is where the concern comes about, can Nintendo compete directly with Tablets and Laptops and Mobile Phones if say Sony decides to make PS5 a dedicated gaming tablet with multi media features, 4K output, and a Blu Ray disc support? History has indicated that in direct competition Nintendo handhelds do better than Sony while Sony consoles do better than Nintendo, but that is because Sony has ALL the 3rd party support while Nintendo just does well on their franchises and key 3rd party support while being cheaper. In a scenario where Sony had all their games on a machine that was equal parts home console, Playstation dominance, and equal parts portable, PSP tablet but with Playstation support, and instead of asking gamers to chose which machine to get, which they chose the Sony console and Nintendo portable, largely because the Sony portable mostly plays the same games as the console, this could backfire on Nintendo.

In direct head to head competition with hardware parity, 1 device that plays ALL the games no separate machines, and all the franchises land where they land, Sony wins because a dedicated gaming tablet that has Playstation controllers and Playstation level of games and Sony levels of multimedia, would KILL Nintendo because let’s face it, Nintendo survives on their franchises alone but they struggle to get 3rd party support. If Nintendo finds success with this model, Sony does have the resources to play the same game but this time could win. Here is why.

PSP struggled to take out DS despite having better hardware not because it was too expensive or the market just preferred Nintendo but BECAUSE the PSP library was not different enough than PS2. Even though it has a few select exclusives, basically every game on PSP is just a perfect or near perfect portable version of the same Sony Playstation home game. Basically what the Switch is but PSP had to also compete with PS2 and PS3 not just DS. DS was it’s own thing, it played entirely different games or different enough versions of franchises it would stand on its own. It didn’t directly compete with Wii, it complemented it. Switch replaces the home console basically putting all of their eggs in one basket. This could eliminate the edge that makes their portables so attractive. It already removed the SINGLE most attractive selling point, low cost of entry, because it is trying to be both a console and a portable.

Sony could easily out do them, they already have years of developing mobile tech and making a truly dedicated gaming tablet, even higher priced say $399 or even $449, people would buy. I think a single Plystation device that doubles as a portable would sell more than a Nintendo device that does the same thing, when you consider how the Sony machine will get ALL of the games and Nintendo will just have their games and select partners. Nintendo’s portable machines would start selling less each generation and Nintendo loses the edge they had. This is of course assuming Sony follows up with a Switch-like device. I think Sony would do better to stick with home consoles and concede the portable market to Nintendo, a return of the favor Nintendo just handed them the home console market.

See with Nintendo, the other Japanese developer out of the home console space, Sony wins by default. Japanese gamers and console gamers that enjoy Japanese games have had to chose get the Sony machine first and pick up the Nintendo second down the road when price comes down, pick up the Nintendo machine first for the 1st party games and get the Sony machine for the 3rd party stuff later when price comes down, or do what MOST people do anyways, get the Sony console and Nintendo handheld. In a world where every gamer buys a Sony home console AND a Nintendo portable, Microsoft either loses or is forced to compete harder. Sony can handle Microsoft but in a world with a united Nintendo core base, 100-200 million strong die-hard loyalists, Sony would be facing trouble. So Nintendo needs to concede the console space to Sony and concentrate entirely on making Switch a TRUE 3DS successor and let the Wii U and console line rest in peace.

 

 

 

 

 

 

 

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