Even if it's a spectacular failure, there's plenty to keep Nintendo on top
The Switch "could possibly sell as much as the Wii," Nintendo president Tatsumi Kimishima recently told Japan's Nikkei newspaper, regarding his company's next game console.
Of course it's possible that the Switch, a hybrid machine that lets you play games on your TV or on the go, will take off like a rocket when it launches on March 3. Anything's possible. It's just not likely. But the Switch can be a success even if it's a more modest hit. And Nintendo might not even need for it to be a hit at all.
This may sound a bit crazy. In most cases, it's entirely true that the launch of a new game machine is a make-or-break moment for a platform holder. Sony was on top of the world with PlayStation 1 and 2 (both of which sold more than the Wii), but none of that mattered when it did a total faceplant with the release of PlayStation 3 in 2006, ceding a huge chunk of its gaming empire to the Xbox 360 and Nintendo's Wii.
A company can recover from this, as Sony did, but it requires that everybody go into crisis mode for a few years trying to furiously bail out water, instead of getting to enjoy a few exciting years building momentum. This is the peril of having a single point of failure: if one key product fails to sell, the foundation of your entire multi-billion-dollar corporation starts to crumble.
But Nintendo right now isn't Sony in 2006. Of course the company wants the Switch to be a hit, but even if it flops it's not the end of the world for Nintendo. Look back at the last 12 months: from the perpetually out-of-stock NES Mini to its unexpected mobile hits like Super Mario Run and Fire Emblem Heroes, Nintendo has very clearly been going out of its way to diversify. Smart and, some would argue, way overdue. So even if the Switch ends up being more Wii U than Wii, Nintendo probably has a plan. Here are some of the ways the company is trying to insulate itself from the vicissitudes of making game consoles.
MORE WAYS TO PLAY NINTENDO
As recently as 2015, if you wanted to play a Nintendo game (legally), you had no choice but to buy one of the two pieces of game hardware produced by Nintendo. Not so today – its first entry into mobile, the odd social-network-cum-chat-app Miitomo, may have been a flop, but Nintendo is now raking in millions in microtransactions from Super Mario Run and Fire Emblem Heroes and clearly has no intention of stopping any time soon. With Animal Crossing coming up next, it's time to start wondering what it's going to be like being in debt to that asshole raccoon-dog Tom Nook for actual money.
The Switch is a bit too big to fully replace the pocket-friendly Nintendo 3DS.
With Nintendo's array of killer brands – which both Microsoft and Sony would still kill for, even after all these years – it has a shot at being a big player in mobile. Mario, Fire Emblem, Animal Crossing, Pokémon and perhaps even Zelda could repeat their golden goose status on phones and it's not much of a stretch to imagine Nintendo making more money from mobile than it does from a merely OK-selling Switch. But Nintendo's also shown that it wants to mix things up in other ways.
Take the NES Classic Edition – if you can find one, that is. The $60 miniature Nintendo Entertainment System is more than just an impulse purchase toy with an awesome controller; it's Nintendo providing an all-in-one solution that allows people to interact with Nintendo games without first buying an expensive Nintendo machine.
This Mario gateway drug has been perpetually sold-out around the world since its November release, which speaks to the ridiculously huge popularity of the device, but also the fact that its success took Nintendo by surprise. Nintendo creative guru Shigeru Miyamoto admits he gets it now, though: "With NES Classic Edition that Nintendo released last year, we are realizing anew how important it is for Nintendo to catch the attention of both new consumers and consumers who stopped playing video games, and provide ways to overcome generational gaps so parents and children can play together," he said at a meeting for investors earlier this month.
Nintendo needs to concentrate on ramping up NES Classic production to a number commensurate with demand. There's every reason to believe that these could be a gift that just keeps on giving for Nintendo – the similar Atari Flashback machines have been on store shelves for over a decade now. The fact that you can walk into any Bed Bath & Beyond in the US today and buy a Flashback but not an NES Classic is a travesty.
Once that's taken care of, the sky's the limit. Super NES Classic? Game Boy Classic? Virtual Boy? (OK, maybe not that one). But the exact form that these projects take is less important than the general idea of thinking outside the console, of looking at stuff that can spread Nintendo play far and wide without needing to spend $200-300 on a general-purpose game box.
NINTENDO CAN STILL RELEASE A SWITCH-COMPATIBLE PORTABLE
Nintendo bills Switch as a "home system" and not a portable, but it's obviously both: If you want to buy a Switch and just carry it with you, you can; conversely, if you want to just superglue the thing into the dock and only play games on the TV, that's fine too.
These aren't just hypotheticals: anecdotally, I've heard a lot of people say that they expect to fall into one or the other of those buckets. I imagine that what Nintendo is hoping for here is that even if people think they'll only want Switch for a single purpose, once they get it they may be surprised to find that they end up using it both at home and on the go.
One relatively easy thing that Nintendo could do is craft a portable-only version of the hardware. It could have a clamshell shape, slide pads instead of sticks, a smaller screen – all the things that 3DS owners enjoy.
Switch producer Yoshiaki Koizumi even told Time in no uncertain terms that this is Nintendo's play for a one-console future: "Previously, you would play certain things on your home system and certain things on your handheld. Our hope is that Nintendo Switch can be the system that bridges both of those and becomes the constant system that you're always using," he said.
But the potential weakness of the Switch is that it strikes a compromise between the needs of a home machine and a portable. If you truly do only want to play Nintendo games on a big-screen TV, then it's a waste to have to buy a tablet screen and a battery that sits unused. And – perhaps more critically – the Switch is a bit too big to fully replace the pocket-friendly Nintendo 3DS.
So let's say not enough people buy a Switch. One relatively easy thing that Nintendo could do is craft a portable-only version of the hardware. It could have a clamshell shape, slide pads instead of sticks, a smaller screen – all the things that 3DS owners enjoy. And it could easily be compatible with all the existing Switch software, since that software comes on tiny cards. Or flip the idea around, and Nintendo could make an Apple TV-type device that's just for the home. Either of these ideas would cost far less than Switch, but wouldn't need their own software.
And let's be clear: A dedicated portable version of the Switch – to replace the 3DS line – seems like it's definitely happening. Nintendo president Tatsumi Kimishima told Time this month that Nintendo is "not creating a successor to 3DS right now," but instead is "thinking of different ways to continue the portable gaming business." And since Switch already is a portable, it would make zero sense for Nintendo to attempt to have two incompatible portable machines on the market after the 3DS sunsets.
NINTENDO IS MOVING BEYOND GAMES
When he went in for his job interview at Nintendo, Shigeru Miyamoto brought in some toys that he had made. Now he's making some very big toys: the creator of Mario is working closely with Universal Studios on "Super Nintendo World," a section of the theme park that will open in all three of Universal's locations: Osaka, Florida, and California. Hopefully, this means more than just a Mario-themed motion ride and a gift shop with exclusive Zelda toys. It would be interesting to see Nintendo's game designers really get into this collaboration and perhaps end up producing some unexpectedly cool interactive riffs on the theme park experience.
In general, Nintendo has long been wary of collaborations on this scale, of letting others use its prized franchise characters (perhaps the 1993 movie flop, Super Mario Bros., had something to do with it). But last year, Nintendo said it would be getting into the feature-length film biz again. Done right – as a Pixar-style animated adventure – and coupled with the increased visibility of Nintendo characters in theme parks, this could be a winner.
And although the project has been back-burnered for now, Nintendo's entry into the consumer health technology market – the sleep-tracking device it announced in 2014 – is still actually in development, Kimishima said. If that does happen, that's another potential business that Nintendo could play in, applying its gaming know-how to creating a better Fitbit.
The future is a diversified Nintendo, with fingers in many different pies – ideally with the Switch at its heart. Owning a game platform can be lucrative, since you can make money off everything: software, hardware, accessories, third-party publishing, and, now with Switch, online membership fees. If all goes right for Nintendo, the increased attention on its characters and games will flow back into the Switch and build momentum.
But if it doesn't work out that way – and it might not – then Nintendo has put itself in a much stronger position to weather a Switch that doesn't hit.