Posted by: seanmalstrom | February 19, 2017

How you don’t do Nintendo analysis

I saw this video which is supposed to be a ‘great’ analysis of Nintendo (acclaimed great by those who were recommending it). In it, we see a puppet talk about how Switch is a ‘soft’ launch and how this is a great strategy by Nintendo.

The problem? Nintendo already declared why they are launching at this time. All you have to do is go to a search engine and look it up. It takes 30 seconds. But whoever made this video would rather talk out of his ass.

Here it is:

“When asked why Nintendo wasn’t launching the NX in time for this year’s big holiday season, Kimishima explained that Nintendo wanted to make sure there were games to go along with the NX.”

There you go.

There is no ‘super strategy’ of soft launching it in March. Nintendo would have wanted it in holiday of 2016. Keep in mind that Nintendo loves new console launches in holidays because of viral marketing with people showing off the consoles during Thanksgiving and Christmas. This is a big reason how the Wii got so big so fast.

He says things like ‘Switch needs a better launch line-up’. What is a good launch line-up? We are going into Generation Nine here so we have dozens of consoles with launch line ups we can compare and contrast regarding their sales performance. I already did a post on this myself, and it is easy to see why Wii had the best launch line up (especially including the VC software).

Did you know that Nintendo considers the SNES launch line-up to be a failure? It’s true! Genesis was outselling the SNES in America because SNES didn’t have the correct games. The correct games were not Castlevania IV, Gradius 3, and Actraiser but shovelware kid games, sports games, and other stuff message forum dwellers do not like to play. Genesis didn’t sell so strongly because of Gunstar Heroes or Phantasy Star IV. It sold so strongly (aside from Sonic) due to sports games such as EA’s Madden. But no one is interested in such titles from a retro perspective.

As I leave this arena of gaming commentary, I am pleased and maddened at the progress and anti-progress. Everyone has realized that HARDWARE SPECS DO NOT MATTER. All that matters is software. Software sells the hardware, not the other way around! They did not realize this during the Wii (it’s true!).

But there seems to be no cross connections of the upcoming new generation versus prior non-consecutive generations. People keep looking at Generation 8. Why? Nintendo is doing everything the opposite from Generation 8. For example, with Wii (Generation 7), Nintendo used Atari style marketing (Generation 2) and used a hardware and software approach of the NES (Generation 3). If you were not familiar with Generation 2 and 3, then the Wii didn’t make any sense. The analysts at the time literally thought game consoles began with PlayStation 1 so they were blind to other generations.

There also is little interest in the macro-economics. These matter. It is much easier to sell game consoles when the economy is not in recession or stagnancy.

As for the Switch’s future, I believe the console that is closest to it will be the DS. During the height of the DS, the DS games were SO GOOD that we were playing our DS at home instead of playing our home consoles. The DS was also intermixed with our daily life. A commercial on TV? Time for more DS. This was a huge change because the Gameboy line never overlapped the home consoles. Also, the library on the handhelds left much to be desired. Most of the Nintendo first party software on the Gameboys were ports.

The DS was also when Japan’s handheld market de-coupled and became dominant over Japan’s home console. Prior to DS, Japan was PlayStation 1 and 2 Land. Japan being handheld dominant (DS and PSP, later 3DS and Vita) is a big reason why we have the Switch.

Switch may be the landmark console that de-couples the West from home consoles as the DS did to Japan. In other words, the West then switches to handheld gaming as its primary gaming. Keep in mind that younger generations are growing up with smartphones and tablets. They do not see a game console hooked up to a TV as sacrosanct. Nintendo is keeping in mind the future pipeline of their consumers.

Gaming commentary from message forums to Youtube videos has exploded since I began this little blog. I have been curious why there isn’t another Malstrom. Why can’t I point to someone else and be like, “Damn, that guy makes some great analysis.” There are the professional analysts who use a quantitative method using supply numbers and all… data I do not have access. But since I spend so much time playing older generation consoles and studying their business history, I come in with a qualitative assessment as to why a console is doing what it is doing in the market.

One big element is that I am a natural writer. This site has been going on for over a decade which is unheard of on the Internet, especially this dinky amateur blog. If there is such analysis out there, they may lack the communicative skills to express their analysis.

But I think a larger part of it is absorbing new contexts of data. Instead of looking at the past generation for clues of what Nintendo will do, why not look at ALL the generations? After all, generation 8 will be the generation Nintendo wants to do everything OPPOSITE of so why anyone gives Generation 8 as a benchmark for Nintendo is beyond me. Why are we not taking in the macro-economic data? What are the future trends for consumer behavior concerning gaming? Do they want to stick with a TV? Nintendo’s Switch is better they may transition away such as in the West.

There also doesn’t seem to be much critical thinking on conclusions. For example, if you said “Based on sales numbers alone with Link to the Past selling around 4.61 million units and Phantom Hourglass selling 4.76 million units, we must conclude that Phantom Hourglass is the better Zelda than Link to the Past. It is very dangerous to compare sales of games that are decades apart. You have to account for population growth. You have to account for the different macro-economic situation. The install bases are also different. Just because a game sells well does not mean it is well received. No Man’s Sky also sold extremely well and look what happened there. Seeing how much worse Spirit Tracks sold, it is clear that Phantom Hourglass wasn’t exactly a social phenomenon with consumers.

Look at how the NES Classic Mini is STILL sold out. This tells us something about the demand or value of these older gamers. Not even Nintendo fully grasps this! Nintendo appears to be the one who is most surprised at the NES Classic Mini’s success.

It is no surprise to readers of this page. Not all gamers live in the current generation. Many of us live in prior generations or, at least, we take long sabbaticals to those time periods. NES Classic Mini is a tool to take a trip to Generation 3 which is snapped up by those who lived in that time period but also in huge demand by those never lived during those times. They want to take a trip to Generation 3 too!

Games are so unique that gaming of Generation 3 is unlike anything in Generation 8. Gaming of Generation 5 is unlike many games of Generation 8 too. There are so many differences.

I guess I just wish I could be the one reading analysis instead of being the one writing it.



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