Can the Switch save Nintendo?

Despite its rich heritage and globally-recognised brand, Nintendo is struggling.

For tens of millions of people, Nintendo holds a special place in their heart. It was the Nintendo Entertainment System (NES), and even more so its successor the SNES, which brought gaming into our homes for the first time.

The iconic grey box with its gamepad featuring four colourful buttons brought Mario, Zelda and Donkey Kong into the living room. In more recent years the Wii became a huge hit among those who may have never played the game before. In the era of Call of Duty and Grand Theft Auto, it was a throwback to a time when games were more innocent and aimed at children rather than adults.

Despite its rich heritage and globally-recognised brand, Nintendo is struggling. This week the company announced it was stopping production of the Wii U, a product which has failed spectacularly while the PlayStation and Xbox have seen huge success.

Nintendo will always be a hugely loved brand and its characters — in particular Mario and Link — will always have a place in people hearts, but to remain relevant it needs a hit, and that is where the Nintendo Switch comes in.

Launched with this promotional video last month, the Switch is a games console and tablet in one. The concept is to allow you bring your games with you where ever you go and with a unique set of controller let your friends join the action. The question now is can Nintendo convince people to buy it?

The Wii U failed so spectacularly because Nintendo failed to convey to the public how the console worked. The Wii U sold just 13 million units since it launched in 2012, which pales in comparison to the Wii, which has sold over 100 million in its lifetime.

Nintendo says there is a lot more to know about the Switch and will reveal more details in January before finally launching the product in March. The problem for Nintendo is that March is not an optimal time to be launching a new games console. It will miss the lucrative Christmas spending spree and anyone looking for a console between now and then will be tempted to look at Sony and Microsoft’s offerings.

Image: Nintendo

Nintendo has always put fun at the heart of its games and with the Switch that seems to be no different. It is refreshing to see in a world where ultra-realism and violence dominate the gaming world. While some analysts believe that this is Nintendo’s last big shot at remaining relevant in the console hardware market, but there may be life beyond consoles for Nintendo should the Switch fail like the Wii U.

Earlier this year Nintendo’s share price rocketed. Not on the back of sales of its Wii U, handheld 3DS console or its own games.

No, the spike was thanks to the huge surge in interest in Pokemon Go, an augmented reality game for smartphones which was developed by a company called Niantic Labs, but which used Nintendo’s IP as the hook to make the game so popular.

Niantic Labs have been making another augmented reality game called Ingress for years before Pokemon Go came along, but it never took off. It was the power of Pokemon (a brand which Nintendo co-owns) that helped drive the success of the game, clearly showing how Nintendo can leverage its existing portfolio of characters to help drive sales.

Image: Nintendo

Next month will see another step in that direction when Mario comes to the iPhone. Already over 20 million people have pre-registered to download the game when it becomes available.

Mario has been such a beloved character for so many people for more than three decades that it is unsurprising that people want the chance to relive that nostalgia on their commute to work every day.

Mario on the iPhone will be a huge success and could make Nintendo a huge amount of money. Finnish gaming company Supercell, which makes mobile games like Clash of Clans and Hay Day, have built a lucrative business using what is known as the freemium model — offering the game for free initially but raking in millions through in-app purchases. In 2015, Supercell made almost $1 billion profit on just three mobile games.

Nintendo has signed a deal to release another four smartphone games in the next couple of years and should Mario prove to be the hit everyone expects, then we could see Zelda, Mario Kart, Donkey Kong and Star Fox all make their way to a smartphone very soon.

Image: Nintendo 

Nintendo obviously wants the Switch to be a hit, but it may be that the world has moved on too much for a Nintendo console to be a success. The PlayStation and Xbox dominate to such an extent that there is little room for a third console on the market.

But if Nintendo is willing to continue to leverage its beloved characters and games, then its future as an important part of the video game world is assured