Nintendo’s Turnaround

Nintendo’s Turnaround

Japanese video game giant Nintendo announced last week that it sold through 7 million units of its Nintendo Switch hardware, following its release in March of this year. Before the fiscal year is over, the Switch is expected to sell 14 million units. This would put it ahead of the lifetime sales of the Wii U – its predecessor and Nintendo’s biggest flop since the illustrious Virtual Boy. It spells a remarkable turnaround for a company whose self-imposed requirement for continuous innovation led to both tremendous success and crushing failure. The Switch is the culmination of a decade of experimentation that started with the Wii, and just when the company appeared to be in dire straits, it pulled itself back on top. How did they do it?

A Unified Vision

In 2006, Nintendo had been stuck playing catch-up ever since Sony released the first PlayStation in 1995. Convinced that the company had to reinvent itself to stay relevant, then-president Satoru Iwata plotted a new course. Nintendo struck gold with the release of the Wii (2006), which would go on to sell 101 million units. But besides Wii Sports, the runaway hit bundled with the console, it would become clear that Nintendo had not figured out how to tie its new customer base to its brand. Seemingly unsure on where to go next, a muddled marketing campaign and scrambled design philosophy saw the company’s biggest hit followed by its biggest flop.

The original Wii (left) became a phenomenon as new fans flocked to the console to try its motion controls in pack-in title Wii Sports. The Wii U (right) featured a tablet, but its weak signal meant that the player was confined to the same room as where the console was plugged into the socket.

When Nintendo presented its next generation hardware, even enthusiasts were unsure whether the Wii U (2012) was a new console, or a peripheral for the geriatric Wii. The Wii U’s controller was modelled after a tablet, but could only be used within 5 meters from the console itself. An uneven line-up of games and an aimless PR strategy resulted in a paltry 13.56 million units of lifetime sales, causing investors to worry for the company’s future.

The Nintendo Switch: play on the TV, or take your game with you on the go.

With the release of the Switch, Nintendo proves that it has learned important lessons from both the Wii and the Wii U. Its appeal is immediately apparent: the Switch offers a home console experience that can just as easily be enjoyed on the go. The console is portable, and encourages multiplayer out of the box by including a controller that can be shared with a second player. And instead of betting on a gimmick to sell the system, Nintendo now focuses on what drew players to the company in the first place: Nintendo games.

An Unbeatable Line-Up

Behind the scenes, Nintendo worked out a strategy to come out of the gate swinging with its new console. The Wii U saw its share of quality titles, but when Nintendo revealed the Switch late 2016, it became clear that the company had been holding back. Upon its release in March, the Switch launched in tandem with a revolutionary new entry in one of Nintendo’s most beloved series, The Legend of Zelda. When the game released five years after its initial announcement, The Legend of Zelda: Breath of the Wild was met with universal acclaim and became one of the highest rated video games of all time on media aggregator Metacritic.

The Legend of Zelda: Breath of the Wild sits at a 97 aggregate on Metacritic, making it one of the most critically acclaimed games of all time.

In stark contrast to the Wii U’s anemic offering, Nintendo has kept up a steady stream of new games, featuring system selling franchises like Mario Kart and Splatoon, and culminating in the release of its flagship title for the holiday season: Super Mario Odyssey. For its mascot, Nintendo has once again gone back to the drawing board to refine the Mario series signature style of intuitive gameplay in a masterfully crafted adventure. Mario was lauded by critics, and now shares the number 1 spot for highest rated game of 2017 with Zelda, making sure that Nintendo will garner its share of Game of the Year picks by enthusiast outlets.

In the video game industry, the release of new hardware is often accompanied by a lull on the software side. By cutting its losses with the Wii U, Nintendo was able to release its new console riding on one of the strongest selection of games in the history of the medium. Expectations for the holiday season are soaring, and analysts project numbers close to that of the original Wii. With relatively little information on what’s coming in 2018 it remains to be seen whether Nintendo can keep this momentum going by itself. But with third party developers scrambling to put their games on the system, the future is once again looking bright for one of gaming’s founding fathers.

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