Posted by: seanmalstrom | May 3, 2021

Nintendo going aggressive on Switch hardware

Read this story. It is about Nintendo wanting to produce 30 million more Switch along with Switch Pluses (Switch Pros which won’t be called Switch Pros because ‘Pro’ is a Sony term).

Nintendo would not be putting out this hardware unless they had the software to built momentum. I believe when the new model of Switch appears, some mega-software will be launching along with it.

People are surprised that the Switch is going to hit Wii and DS type numbers. I am not. I even said so when Switch was launched.

However, there are three things to keep in mind.

One, Switch does the job of both handheld and home console. Direct comparisons to handheld and home consoles are not exactly honest apples-to-apples comparisons. I think for the Switch to truly be successful it needs to sell DS + Wii numbers combined. No analyst or Nintendo will do this because that is not the perception they want.

Two, the lockdowns and pandemic have effectively banned Nintendo’s greatest competitor: Outside. With Outside banned or increasingly forbidden, Nintendo’s marketspace has a much greater ceiling. The question is how long will Outside be banned? And will Outside return as a competitor?

Three, we are in the calm before the storm. During the Wii and DS Eras, which I was here, the years of 2005-2007 were golden years for Nintendo. Then the recession of 2008 happened. This coincided with the Wii momentum collapsing in the United States in 2008.

The Wii and DS were designed to sell to new markets as Nintendo was fighting against demographic collapse of Japan. There is no demographic collapse of other nations such as the United States. This is why Wii sold so much better there.

But when the economic trends reversed, customers became much more savvy. Games like Wii Music were soundly rejected. Nintendo’s Wii ship slowed in the face of recessionary winds.

Nintendo assumed Wii’s console lifecycle was pretty much over. It would now slope downward. It had a good run. However, Iwata brought up how Pokemon rejuvenated the Gameboy. In 2009, NSMB Wii exploded the Wii market for December making it sell four million Wii systems. Nintendo was stunned.

So my prediction is that, very soon, an economic cliff will occur which will take out much of the momentum of the game console markets. It will be like 2008. I do not know the exact time this will happen, but it will happen. This ‘steroids’ of the gaming market due to the pandemic will be counteracted by economic downturn. It could be hyperinflation or something else. I’m witnessing inflation skyrocket everywhere else so I expect enthusiasm to eventually cool for the gaming stuff…

[The article has a paragraph stressing that Nintendo seeks a new Switch model to compete with the new Sony hardware. See? Nintendo is definitely competing. They are asymmetric competitors.]


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