Opinion: If Nintendo’s next console isn’t truly ‘next generation’, they should pivot to exclusively developing software.

...unless you like waiting six years between Zelda games...

Last year, Nintendo released the Switch to much fanfare.

And while I don’t own one, I’ve played it quite a few times and it’s pretty cool, I’ve never been a big handheld guy (not to offend anyone but I think handhelds are kind of dorky), but playing at home is smooth and efficient.

The console has been doing very well in the market, with almost 20 million units shipped as of the end of June(1).

You’d think Nintendo would have to be insane to consider this move after one of their best years ever, but several underlying factors reveal that the Switch isn’t quite running away with the title in the current generation of the console wars, and this article seeks to explore why becoming strictly a software developer might be the most prudent move for the future of Nintendo.

Enter the PlayStation 4, which currently outsells the Xbox One by a 2:1 ratio, and holds a 71% stake in the home console market(2).

Even with the Switch being the shiny new toy, the PlayStation 4 still outsold it in nine of the eleven months between March 2017 and February 2018.

Microsoft looks to be done if things keep up the way they have, as the article states they only sold five million consoles in calendar 2017 (the PlayStation 4 sold almost twenty million units last year).

It doesn’t matter how rich you are, you don’t stay rich by throwing your money away, and Steve Ballmer, Bill Gates and the rest of the Microsoft board knows this.

The Nintendo faithful, among which I’ll consider myself, will say ‘the strength of Nintendo has always been in its games and first party properties, not in the raw power of the console!’

The strength of its ‘first party properties’ and games.

Let’s take a look at the IGN games of the year (because they go back the longest)(3).

2017 Game of the Year: The Legend of Zelda: Breath of the Wild

I will give them this one, because Breath of the Wild was awesome, and Nintendo couldn’t keep remaking Ocarina of Time every few years, be it in actual physical or digital re-releases (I believe we’re at 4 now), or every console Zelda game between 1999 and 2017 being ‘Ocarina of Time, but with better graphics’.

Horizon: Zero Dawn was a high runner-up.

Horizon: Zero Dawn is a PlayStation 4 exclusive. It’s also an awesome game in its own right, but I concur with IGN that the right game won.

In 2016 Overwatch won, and it is not available on a Nintendo console.

In 2015 The Witcher 3: Wild Hunt won, and it is not available on a Nintendo console, and I’ll state that as this is an opinion piece, I’m of the opinion that it’s the best game of the decade so far.

In 2014 Dragon Age: Inquisition won and it is not available on a Nintendo console.

In 2013 The Last of Us won, it is a PlayStation exclusive.

In 2012 Journey won, it is a PlayStation exclusive.

To spare you the tedium of listing them off, Nintendo last won IGN’s Game of the Year in 2007, with Super Mario Galaxy 2.

Sony exclusives have won the award four times since their inception in 2001. The odds-on favorite for Game of the Year 2018 is another PS4 exclusive, the stellar re-imagining of God of War.

Now im not saying that Sony games are better or Nintendo games are bad (Galaxy 2 and Breath of the Wild are both top-20 games I’ve ever played), but I don’t see how Nintendo can maintain their increasingly small market share when they release two game changing AAA titles within the same 18 month period every six or seven years.

Just look at the impressive list of PlayStation 4 exclusives available now:

God of War
Horizon: Zero Dawn
Uncharted 4: A Thief’s End
Persona 5
Shadow of the Colossus
Nioh
Bloodborne

And it doesn’t look to be slowing down, given the PlayStation 4 has a healthy indie development scene and the whale of The Last of Us 2 is just off the bow expected to breach within one year.

Meanwhile, you have to go back over twenty years to find a Nintendo console where the best game available isn’t an in-house developed offering, and even that’s debatable considering that plenty of people preferred A Link to the Past and Super Mario World to Final Fantasy III, Donkey Kong Country, and Chrono Trigger.

So if it’s not the games themselves, we need to look at the numbers.

As of 2017, Nintendo wasn’t making a profit off of each Switch sold(4), but given that the company had a 9 billion dollar profit in 2017, surely they must have found a way to decrease manufacturing costs (5).

Granted the PlayStation 4 isn’t doing much better (in 2013 Sony only made $18 profit off each unit sold), but one of the golden rules of the consoles is that you can expect to operate at a loss for at least the first two years. I highly doubt the profit margins on the PlayStation 4 are that slim anymore.

Software sales are also a large driver of revenue. The Switch has nearly twenty million units sold and about 87 million titles sold (about 4.4 per owner)(6).

The PlayStation 4 has sold at least 645 million units of software, good for about 9.2 per owner(7).

4.4 titles per user, not considering digital sales which it was hard to get the numbers for, is respectable. 9.2 per user is insane (I currently own eight titles and I believe RedBeard has seven).

We can chalk this up to the PlayStation 4 being older, having launched in 2013 and thus having had more time to build up its library, but given typical console life cycles (7-8 years), and that there’s no Zelda or Metroid around the corner to drive up enthusiasm while the PlayStation 4 keeps pumping out AAA titles, AND the PlayStation 4 still outsells the Switch(8), this is quite the hill Nintendo needs to climb.

The idea that Nintendo can offer better exclusives is largely a myth, as shown by critical appraisal and software sales. Their profit margins on each unit sold are hardly better, if at all, but that can be partly chalked up to it being in a different stage of its life cycle.

‘But Nintendo owns the handheld market!’

While true that the Nintendo 3DS mopped the floor with Sony and the Vita (70+ million to about 16 million units shipped respectively, ouch)(9), handheld gaming itself is a dying market, because smartphone gaming is set to account for FIFTY PERCENT(!!!) of the global gaming market by 2018(10).

In China I see the odd laowai with a Switch or a 3DS...but almost every Chinese person or foreigner I see is face down in their smartphone (the Chinese much more so than the foreigners).

An increasing amount of classic titles being available on Google Play and the App Store will also bring in the older gamers itching for nostalgia.

Why pay $129.99 for a 3DS and $49.99 per title when my phone, which I need to have, will let me download the games I want for $19.99? When I was a kid and I got $20 a week if I did all my chores maybe I would save, but now I’m an adult and I need to feed, clothe and shelter myself. In a similar vein, why would I spend money on an NES or SNES classic when I can download an emulator for free and get a controller adapter for my PC for like thirty bucks?

I love Nintendo and have since I was a boy, and I find their history compelling and interesting (Nintendo is over 120 years old and got its start selling playing cards(11)), but I see a few things giving me concern for their future.

Most baffling to me is that they can’t ever seem to sustain momentum.

Sony has pretty much been the top dog since the late 1990’s, Microsoft has at times pushed them but has mostly been the girl you married because you settled for her and not the girl you wanted, but a line graph of Nintendo from 1996 to today would look like waves in the ocean.

After essentially putting Sega out of the console game, they followed the hugely successful Super Nintendo with the Nintendo 64; while a very good and to this day beloved console, that didn’t stop them from being TKOed in the third round by Sony and the upstart PlayStation, which sold nearly three times as many units, pioneered the disc format still in use today and snatched away and has yet to relinquish many of Nintendo’s most prized exclusive properties (Final Fantasy and Metal Gear Solid chief among them).

They then followed the 64 with the GameCube, and the less said about that debacle the better. Already at the time accused of being too ‘kiddy’, someone at Nintendo decided to follow up the Nintendo 64 with a purple lunch box that used a now extinct mini disc format. To make things even less fair the GameCube was matched up against the PlayStation 2, which even given the PS4’s great numbers should still after this generation remain the best selling console in history (and for my money it’s the best console ever, its library is second to none).

Licking their wounds from the GameCube embarrassment, they appeared to capture lightning in a bottle with the Wii, which shipped over one hundred million units.

...Which they then followed up with the WiiU, a monumental failure that relied on a game pad with a three hour battery life (fucking frustrating!) and didn’t even get a proper next gen Mario title and a Zelda that launched in conjunction with the Switch.

The WiiU’s legacy will be that it led to the Switch.

Nintendo consoles have become supplementary in the world of the gamer. ‘Yeah, I have it for Mario and Zelda but mostly I play my PlayStation 4’.

My Wii was king for about two years, then I discovered Rock Band and it spent time in a box until Skyward Sword dropped (a great game, but a mediocre Zelda game), and after I beat that game, back in the closet it went.

Same with my WiiU; I got about eight solid months out of Mario Kart 8, then it sat in a box until Breath of the Wild came, and I just recently sold it to a friend for pennies on the dollar.

The Nintendo 64 was the last Nintendo system for ‘hardcore gamers’. I know Nintendo has said they want to broaden the appeal to the ‘casual market’ , but as it is in any other arena the casual market is fickle and lacks loyalty...again, not saying casual fans are bad, but rather just expressing a truth.

The casual sports fan watches from home and buys a hat, they don’t buy new jerseys and go to ten games a year.

The casual car fan goes to car shows and when car shopping stresses price and practicality, they don’t buy and fix classic cars.

The casual music fan buys a record off iTunes, they don’t see the band on all of their tours.

The casual gamer plays games at their buddy’s house or buys a console and sticks to two or three games, they don’t get a five year platinum membership and ten new games (plus downloads and DLCs) every year.

Very few gamers have a Nintendo console, even a Switch, as their ‘main’ console.

They can’t seem to pump out the high end exclusives fast enough, and there are often delays that aggravate their followers.

There was almost six years between Skyward Sword and Breath of the Wild. ‘Gamers are pissed about the news of Breath of the Wild being pushed back another 9 months, here’s a fresh idea, let’s re-release Ocarina of Time!’

Breath of the Wild’s continual delays – first scheduled in 2015, then 2016 before finally coming in 2017 – is one of the biggest reasons I have no plans to purchase another Nintendo console. Even though the game itself was worth it in the end, its not the first time Nintendo has said ‘This highly anticipated game you’re all looking forward to? We need 10 more months to work on it’. As an adult I want my fix now, not tomorrow.

Over seven years passed between Super Mario Galaxy 2 and Odyssey, but they’ll put his face on everything.

The last Metroid game before Samus Returns was in 2010, and Samus Returns is a sidescroller like Super Metroid and not a full 3D outing like Metroid Prime.

Splatoon, Bayonetta and an adaptation of seven year old Skyrim aren’t gonna ship consoles, especially when the PlayStation 4 has Skyrim on PlayStation VR and on the PC it has a very dedicated modding community.

I would like to see them develop some new IPs instead of constantly going back to the same old well, but even more than that, I want to see Nintendo step into the 21st century, with a console every bit as powerful as the PlayStation 5, not one ‘about as powerful as the PlayStation 4 which came out a decade ago’.

If they do that, they get the developers, then they get the exclusives, and then they get the money.

Regardless of what you or I think, gaming developers want their games to look as cutting edge as possible and last gen power won’t cut it.

If not, Nintendo will forever be a bit player in the console wars, the token ‘second choice’ for gamers, who just so happen have a few extremely valuable IPs that they could put on the PlayStation 5 when it comes out.

Links:

1: switch ships almost 20,000,000 units... https://www.polygon.com/2018/7/31/17634450/nintendo-switch-console-hardware-sales

2: Ps4 71% share of console market... https://arstechnica.com/gaming/2018/05/report-ps4-has-now-sold-roughly-2-5-times-as-well-as-the-xbox-one/

3: wiki, ign games of the year... https://en.m.wikipedia.org/wiki/List_of_Game_of_the_Year_awards#IGN

4: Each switch costs $257... https://www.pcmag.com/news/352893/nintendo-switch-build-cost-estimated-to-be-257

5: Forbes Nintendo 2017 9 billion dollar profits... https://www.forbes.com/sites/mattperez/2018/04/26/nintendo-ends-its-comeback-year-with-over-9-billion-in-revenue/

6: Nintendo releases sales records... https://screenrant.com/nintendo-3ds-nintendo-switch-sales/amp/

7: ps4 software sales... https://www.polygon.com/2018/1/8/16866554/playstation-4-sales-figures-holiday-2017

8: ps4 best solving console May 2018... https://venturebeat.com/2018/06/21/may-2018-npd-console-sales/

9: handheld sales who won vita or 3ds... https://www.engadget.com/amp/2018/06/08/vita-game-boy-3ds-ds-psp-compare-sony-nintendo-handheld/

10: smartphone gaming set to account for 50%...
https://www.engadget.com/amp/2018/06/08/vita-game-boy-3ds-ds-psp-compare-sony-nintendo-handheld/

11: Nintendo... https://en.m.wikipedia.org/wiki/Nintendo

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