Nintendo rises from ashes on Switch sales

If the global, albeit temporary, success of Pokémon Go is anything to go by, then things are about to get a lot better for Nintendo – as the Japanese firm teased that a Pokémon game will be landing on the Nintendo Switch this year.

Emerging from its most profitable quarter for eight years, posting operating profit up 261% to $1.1 billion for the last quarter, Nintendo is a company on cloud nine right now after years of mounting concerns that its glory days were long behind it. A games console market increasingly dominated by Xbox and PlayStation, as well a surge in mobile gaming, drove Nintendo to diversify its product range yet again with the somewhat risky Switch – bridging the gap between a hand-held gaming device and a traditional household console. It is based on an Nvidia Tegra X1, built around four ARM Cortex-A57 cores and four ARM Cortex-A53s (so 8 cores) on a single chip.

That risk has paid off on an unexpected level. The next question for Nintendo is how can it keep this momentum going to avoid a Wii-type fall from grace, and how can it disrupt the burgeoning online gaming market – one which is increasingly mobile?

First of all, Nintendo is looking to two old guards, Super Mario Bros. and Pokémon, to keep up sales figures throughout 2018. An official Pokémon announcement is yet to arrive but was listed in the company’s earnings last week for release on Nintendo Switch in “2018 or later”, developed by Game Freak, while a new Mario Kart Tour game is due to arrive on mobile devices in the next 14 months.

Nintendo’s flagship Mario franchise contributed in a big way to impressive sales of Switch devices since launching worldwide in March last year, and it will be hoping to transfer this success over to mobile platforms in the same manner as seen by Pokémon Go’s society-stopping arrival in summer 2016, as well as the popular Mario Run mobile game. Should Nintendo meet its 2018 launch date for Pokémon, its target of between 25 million and 30 million Switch sales by the end of the year should be well within its reach.

The creator of Super Mario Brothers, Shugeru Miyamoto, told Wired that simply putting the existing game on a mobile device and emulating a plus control pad does not interest him. “That’s not fun creatively. We’re more interested in looking at how we can be creative with Mario, and design for iPhone in a way that takes advantage of the uniqueness of that device and the uniqueness of that input and the features which that device has. For us, that is much more rewarding creative work,” said Miyamoto.

The Americas led Nintendo Switch sales for the nine months ended December 2017, bringing in $2.3 billion, followed by Europe with sales of $1.4 billion, while Japan alone brought in $1.25 billion in Switch sales, to total $5.4 billion for the period. These sales include the device hardware and accessories, plus downloadable and add-on software.

Software sales in particular saw unexpected uptake. Nintendo shipped a total of 12.1 million Switch units in the nine-month period, with software sales of 47.1 million – that’s a very high ratio of nearly four downloads to each device in a very short time frame and a clear sign of the future of gaming.

Also in the pipeline is the full paid version of Nintendo Switch Online, swapping out the free version in September 2018 for a $3.99 a month service. Still, Nintendo is significantly undercutting the online subscription prices of Microsoft’s Xbox Live and Sony’s PlayStation Network which both cost $9.99 a month.

While Nintendo looks at increasing online and mobile sales, the company has brought out some add-ons to extent the shelf life of the Switch and to appeal to younger audiences. Nintendo Labo will launch in April this year, a $70 kit of cardboard Lego-like attachments to complement the Switch device.

Cars, motorbikes, fishing rods and even a piano are among the portfolio of cardboard cut outs. These make use of the Switch’s infrared controller and sensors, letting users interact via hand gestures to play games. Although aimed at children, in true Nintendo style the reviews from adult fans who got an early taste of Nintendo Labo are flattering.

An impressive period for Nintendo means the company has raised its operating profit guidance for the year ending March 2018 from $1.1 billion to $1.45 billion.

Switch has sold nearly 14.9 million units to date, compared to the 13.5 million Wii U devices shipped in five years from launch in 2012.