Nintendo, the once infallible game maker, currently find themselves outside of the modern console market. That’s a terrifying prospect as we approach the release of their new platform, codenamed “NX”. It’s surreal seeing the Japanese company succumbing to the veraciously shifting nature of the industry it once stood atop. It’s also telling to see their hesitation as we march closer to their next machine.
In a recent Nintendo earnings report, the Kyoto-based company outlined a number of plans for their future. Among them, were both the release dates for their upcoming NX console as well as the eyebrow-raising second delay for the still unnamed Zelda game, pushing the title into 2017. While conventional wisdom as well as numerous credible reports suggested a holiday 2016 launch for the console, analysts seem to be on board, claiming that Nintendo is making the right call. The change in tone is surprising, especially when noting the other news that came out during Nintendo’s report.
According to VentureBeat, during the last fiscal year Nintendo reportedly suffered a 60.6 percent drop in profits in the wake of falling Wii U and 3DS sales, which have been attributed to competition with Japan’s growing mobile market. While sales in general have only slowed slightly compared to last year, the company’s total net income dropped to ¥16.5 billion. It’s important to note that Nintendo had predicted sales to falter as they prepare to shift focus from the Wii U to the NX, yet their software sales seem to paint a more interesting picture. On the 3DS, Animal Crossing: Happy Home Designer sold 3.04 million copies while Pokemon Super Mystery Dungeon sold 1.22 million. While both respective, the report also noted that the “lack of major titles” were the cause of the portable’s drop in sales. On the Wii U, Splatoon and Super Mario Maker both sold at 4.27 million and 3.52 million respectively, but still could are not do much for the struggling console. It seems that the Wii U’s audience, who have historically held very high attachment rates, seem to be waning as Nintendo has slowly entered into their self-attributed content drought.
“It seems that the Wii U’s audience, who have historically held very high attachment rates, seem to be waning as Nintendo has slowly entered into their self-attributed content drought”
Nintendo has made clear however that they are not particularly worried about these numbers, constantly bringing up how the drop in sales had been in line with their expectations. Another important note is that their operating income has risen 32.7 percent. It’s clear their attention has become fixated on the development of the NX, as the company’s outlook for next year has no mention of the Wii U. Instead, it seems Nintendo will rely on amiibo and 3DS sales to hold them over until the NX’s global launch in March of 2017.
The fan reaction to the spring launch date has been mixed, but many analysts agree that the long-term success of Nintendo is reliant on the NX and the long wait could be for the better. However, Nintendo’s lowered profits seem to be proof of their need to re enter the console space as their audience begins to grow impatient. It’s even more unfortunate when you take into account the mediocre critical response to their latest Wii U title, Star Fox Zero, which very well could be the console’s swan song. Yet with the help of their new Miitomo platform, which has reportedly taken on 10 million users, Nintendo is in a strong position looking ahead. The company has estimated a 36.9 percent rise in next year’s revenue, despite this year’s lower than expected profits.
There are a couple of important takeaways here. First, Nintendo doesn’t seem confident in sending their new console out in the notoriously competitive window of Q4. Traditionally, consoles have launched during the holiday season to capitalise on end-of-the-year gift giving. It’s also a time of the year where some of the biggest games are released. As DigiTimes previously reported, we’ve already heard rumors of companies like Foxconn that have already been partnered with Nintendo to manufacture the device as early as Q1 of 2016. If this is indeed true, then Nintendo shouldn’t have much problem making it to market by holiday this year.
So if not one, it must be the other. The delay of the new Zelda title may be linked in some way to the spring launch date. While reminiscent of Twilight Princess’ (almost) simultaneous launch back in 2006 on both the Gamecube and the Wii, the next Zelda game’s delay could perhaps signal a lack of other launch-ready titles from Nintendo. With no actual word from Nintendo outside an interview with Metroid Prime producer Kensuke Tanabe from Eurogamer, which claimed the next Metroid to “likely” be on the NX, there is little to go on as far as speculation. However, it doesn’t seem too unreasonable to expect an NX launch lineup as barebones as the Wii U’s.
“The fan reaction to the spring launch date has been mixed, but many analysts agree that the long-term success of Nintendo is reliant on the NX and the long wait could be for the better”
Along with the March 2017 launch announcement, Nintendo also revealed that they will be keeping things close to the chest, and will have only the new Zelda game playable at E3 leaving the NX out of the spotlight. An odd move seeing as E3 is the usual stage for big console reveals. Perhaps this is an attempt to stay out of the fight between Sony and Microsoft with rumors of the two unveiling new hardware during the big event. However, the missed opportunity seems like a critical mistake as the NX will be one of the few consoles to be revealed and released while never making it to a single E3. No doubt Nintendo has multiple big Nintendo Directs which will devy out information on the new console like an IV drip, but this drastic change from traditional console launch hype is insane, even by Nintendo standards.
It’s clear releasing the NX this holiday would be disastrous for the company, whether due to a lack of time to prepare for launch or their low count of launch-ready games; perhaps releasing during the spring of next year still isn’t giving them enough time for preparations. Many would argue that waiting longer to launch will result in an even more drastic drop in net income by next year’s earnings report forcing the company to make due with 3DS sales alone, leaving many of the manufacturing costs for the NX up in the air. While that may be true, it’s also important to note that the NX’s launch in March will only allow for a few weeks of early-adopter sales to be accounted for 2016’s financial year’s end in April. That won’t amount to much in the eyes of their investors, as the reality of the NX’s sales won’t be clear until the following year.
Why not simply wait a few more months till the holiday of 2017? Since Nintendo is already skipping E3 this year, it would give them enough time to reveal and announce features for the console on their own terms, and give people a chance to get hands on with the device during next year’s E3 before ramping into production and launching later in 2017. It would force Nintendo to bite the bullet for an entire year of slow profits without many AAA titles shipping to market, however it could potentially mean an even more impressive launch for the NX. If the Xbox One has taught us anything it’s that defining a console’s life early is vital to its long-term success.
Historically, Nintendo has always been a company of small losses and large successes. Learning from their mistakes, they’ve never been able to take no for an answer. They’ve redefined the way many people think of games and have put their namesake on the line countless times over. However, the industry has changed drastically since their last truly impressive product. While amiibo and their mobile efforts seem forward thinking, they find themselves between a rock and a hard place. However, it’s easy to forget that they’ve been here before, and have since strived on to their most historic successes. The future, like with all things Nintendo, will be difficult to predict. Only time will tell if their gamble will pay off.
