Analysts are Wrong — the Nintendo Switch is a Brilliant Product Decision

There’s been a lot of chatter on the market about the Nintendo Switch. So far, gamers, investors, and analysts alike haven’t been impressed — as shown by the downward push on NTDOY’s stock price every time they release new information. The critics are clamoring about how the entire product has been a mistake— its size, its lack of pure hardware power compared to its Sony and Microsoft rivals, and the shrinking size of the console market in general. They’ve lambasted the company for being so late to go into mobile, the largest growing games market. Then punished it heavily when Super Mario Run didn’t repeat the same success of Pokemon GO.

Image Credits to Newzoo

But they’re wrong.

And it’s for the same reasons they’re criticizing it for.

Because Nintendo HAS Learned From Pokemon GO

If there was any good news about the Pokemon GO fallout — it was that one: Nintendo could actually rightfully shrug off the responsibility to Niantic. And two: they learned that their largest and most fervent market was the ages surrounding that of millennials: A generation that dyed their products in deep shades of Pokemon nostalgia and throwback comfort.

And most importantly — a generation that’s now entered the job market and whom possesses disposable income, yet discovering themselves in increasingly different stages in their lives. For those of us between 20–34, we find ourselves being near a TV less(partially because of on-demand services reducing passive watching), trying to be more social, and playing less video and computer games than we used to. And that’s due to a combination of factors: full-time jobs, living on our own, maybe even a kid or two.

Mentioned specifically are the earlier

So we have less time. Different needs. Changing tastes. But more freedom and the willingness and ability to pay for it.

These are the changes that millennial gamers have found themselves in. What companies have to do if they want to retain this generation of users is to grow their product with them so that their value stays relevant. With BLS’ chart above as an example, they could either choose to tie their product into a growth segment (with reading and socializing being the only ones in the ages we’re looking at), or try to use their product as a tool for change.

Nintendo has already tried the latter to some success. The Wii was an earnest attempt to change our gaming habits to be more physical, and increase the share of time spent in the exercise category. Now, the Switch is an attempt to do the former: to capitalize on the generation’s growing want to socialize and ease it with the comfort of an activity they know they enjoy (gaming).

The Switch is Nintendo Growing Up with Us

With myself as an example. I used to love the Gamecube and Wii — I spent more hours than I could count with the ‘Tales of’ series, Zelda, and Paper Mario. But now I work full-time, I’ve relocated multiple times for my career, and even on weekends I have a nagging feeling that tells me to be productive even if all my work done.

So I need something portable that I can take along easily when moving. Something that is casual enough that dropping the game for a few weeks wont be an issue in starting it back up. Something that still delivers me my favorite old titles but in a way that I can enjoy them without going back to being a shut-in.

A casual observer would just tell me to play on mobile. But that’s not the solution. Never mind the “Hardcore gamer” folk, but the mobile experience has been a whole issue of its own: littered with noise, disgraceful freemium models, and a forced and inflexible interface. For us who grew up on PC games and consoles — we’ve come to expect much more in terms of game depth and player interaction.

And thats where the Switch hits the sweet spot for all of these. Nintendo has sat firmly on its throne as the “Family’s Console” since the Wii. But now it’s transferring all of that into a bite-sized model that fits perfectly into a new working adult (with an inner child)’s life. Add a little bit of nostalgia and you have a winning formula.

The Switch Represents the Epitome of Nintendo Values

Creating a community. Being open to all levels and people. Emphasizing real face-to-face experiences.

This is the reason why the Wii was such an astounding success. Because it abandoned all the traditional notions to do with gaming — that it was just full of people who lusted for better graphics and performance. Nintendo proved that assumption wrong, and that gamers existed in every spectrum of life: not just in age differences but in lifestyle and preferences.

The Switch’s use of controllers bring back the memories of huddling in a group of friends on the elementary school playground during lunch — connecting our gameboy colors together to trade Pokemon and battle.

But it’s even better. Because Nintendo knows we can’t go back to that time and instead seeks to make new ones —like burning the July 4th meats because chef Donny got too distracted in a Switch title co-op mission or playing a quick Mario Kart game with the pretty stranger sitting next to you at the doctor’s office because you were both late for your appointment.

Knowing this, I almost feel a bit of the pride a parent feels watching their child at graduation: Because the Switch is GameBoy growing up to be the GameMan.

Update: Seems like the player-base agrees! As of 1/31/2017, Nintendo has confirmed that it needs to boost production to match demand.

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