The Switch has been Nintendo’s big
thing for over seven years now. And to say it’s been a success is an understatement. In terms of hardware sales, it’s sold about 140
million units, making it one of the best selling consoles of all time. In fact it’s pretty much on
track to take the number one spot. I mean it only needs 15 million more to beat the DS and PS2,
and it’s still selling. I think at this point the only thing that could stop it is the Switch 2
launching SOON, being fully backwards compatible, launching with a bunch of absolutely can’t-miss
games, and being so surprisingly affordable that no one would even THINK of buying a regular Switch
instead. I don’t think all of that is likely, so the Switch is probably going to make it. And
if Nintendo wants to give it one last little push to the goal, they haven’t even dropped the
price, they’ve still got that ace up their sleeve. And whereas many companies are happy selling their
hardware at cost or even at a loss in order to really push that install base, aiming to make up
the difference in software sales, Nintendo is all about profiting on their hardware. So just selling
the Switch system itself and all its iterations, they’ve made an enormous amount of money. But
when you look at software, you’re talking about an embarrassment of riches. This generation has
seen Nintendo’s biggest IPs selling better than EVER. Absolutely unprecedented numbers, the kind
that traditionally we’ve only seen with pack-in games. The best sellers chart is filled with
tales of staggering success. Already-beloved Zelda selling several times better than ever.
Already hyper profitable Pokemon selling better than ever even in the face of massive controversy.
Even some absolutely baffling surprise successes like Luigi’s Mansion and blue ocean newcomer
Ring Fit Adventure. And that’s just first party. When you own a platform, you get a sizeable
cut of every third party game sold on it, and the third party scene on Switch has been
extremely strong. Total software sales have far surpassed one billion units, making it the
first Nintendo console to hit that milestone. AND, don’t forget that thanks to the steady rise in
digital purchases bolstered that much more by the indie scene, Nintendo is making substantially
more money with each sale. And all this isn’t even to mention other Nintendo-related products. A
strong place in the industry means high relevance, and high relevance means success in these
extra-gaming endeavors. Nintendo now has its own theme park in multiple locations, and the
Mario movie was such a success that now there’s already a sequel and a Zelda movie in development.
Nintendo is rolling in the dough right now. Kane is no doubt illustrating this by using that clip
of the gold train level from 3D World! They are a cultural icon. One of the behemoths
of the gaming industry. Especially now, with all these enormous AAA corporations putting
out flops and cutting staff and canceling games, Nintendo is just doing things the old fashioned
way, putting out banger after banger and raking in that cash. Need I remind you that they’re
the richest company in Japan right now! And next year they’re likely to
finally release the Switch’s successor, their next console. We don’t
know what it will be like, but it’s not hard to imagine that it
will live up to the Switch’s legacy. In fact Nintendo has reached such a
level of success with the Switch that we can all confidently say…it will
last forever. Nintendo will always be this successful. They’re simply too
big to fail now. Dot dot dot…RIGHT??? Well, it may be easy to imagine that Nintendo will effortlessly roll right into the next
generation, hit the ground running, and perfectly maintain this crazy level of
success. But that is by no means a sure thing. Especially if you’re younger or relatively
new to the Nintendo scene, you might not really appreciate how tight of a spot they were
in before the Switch came around. Their handhelds have historically done well, with the DS just
barely failing to snatch the title of best selling console ever from PS2. But their home consoles
haven’t fared as well. The NES was a smash hit, it singlehandedly saved the gaming industry
from collapse. Other companies were feeding into an unsustainable level of growth,
flooding the market with more garbage than consumers could keep up with. Sound familiar?
Indeed, it’s similar to what’s happening today, but the market was still in its infancy back then
and wasn’t equipped to deal with the fallout. And when everyone else was abandoning
ship, Nintendo came along and said hey, how about a cool system with some cool games?
And the day was saved, and everyone rejoiced. Nintendo was the undisputed king of not
just family games, not just platformers, but ALL VIDEO GAMES. They were the champions
of the entire industry back then. And I’ll bet that at that time, it seemed like they could
never be bested. They would be on top forever. But after those NES days, every one of their
consoles performed worse and worse. Every time it was simply fewer and fewer sales. Even when
they were revolutionizing the art of games and pioneering genres, people were just less and
less interested in their games and consoles as time went on. The Wii broke that downward trend,
but it was kind of an outlier. It tapped into the casual market in a brand new way, so it sold
a disproportionately high number of units to people who didn’t traditionally play video games
at all. But then smart phones came around and that crowd moved on, so when Nintendo gave us the Wii
U, it fit right back into that downward trend. It’s actually kind of uncanny how perfectly that
line goes down. Their console sales declined so consistently, and this was despite the fact
that in all that time, the industry was only growing. The number of people playing games was
exploding exponentially. But for whatever reason, they weren’t interested in Nintendo in
very high numbers. Before the Switch, Nintendo was in a genuinely bad place. Their
handhelds were helping prop the company up, but even that wasn’t all smooth sailing. The 3DS
had a disastrous launch, and while it did end up being a really terrific success, it still didn’t
even come close to touching the success of the DS, largely because of that aforementioned
casual crowd moving on to smartphones. Handheld games were keeping them afloat, but
they could tell it wouldn’t last forever. Now that the Switch is so big, they’re
no doubt working VERY hard to ensure that whatever comes next lives up to our
expectations and is another great success. So this video is really addressing
two primary questions. The first is, is their next console guaranteed to be
successful? And the answer to that is simply no. Nintendo has been on the top of the world before.
The Wii frenzy was crazy, this was the NES frenzy all over again, you couldn’t even find one of
the things to buy for like three years. Sure, a lot of that was probably Nintendo’s fault, as
they used to really be into that gross artificial scarcity thing, but the demand for Wiis was still
very high and they made a very large sum of money from the system. And then it all came crashing
down. One success simply does not guarantee another success. And this is especially true with
Nintendo, because their whole MO is being weird, being unpredictable. They don’t just like
making games, they like making TOYS. They like weird gimmicks that change how a person
plays. And this is always a gamble. Dual screen, touch-controlled handheld gaming paid off.
3D gaming did not pay off. Motion controls paid off. Dual screen touch-controlled home
console gaming did not pay off. They’re also very enigmatic and don’t like to pay attention to
the rest of the industry or even the desires of their customers in many cases. And again, this is
a risk. Sometimes they hit us with these random, crazy ideas we never even knew we wanted,
that end up setting the world on fire. And sometimes they create baffling products that
immediately seem like terrible ideas to anyone outside of the company. They’ve surprised us with
their bizarre genius, and they’ve also completely missed the mark and seen disastrous consequences.
We simply do not know what their next system will be like. For all we know it will include some
uninteresting gimmick that actually hinders the overall enjoyability factor, or ends up only being
a slightly fun thing to play around with a little, but has little impact on the games themselves and
dramatically increases the price of the system. I mean I know I rag on the Wii U a lot, but it’s
really important to understand just how much of a misstep it was. Its whole identity hinged
on a feature that was only slightly interesting at best, yet raised the price by like a hundred
bucks. It was an objectively poor idea. And that was the system Nintendo tried to sell RIGHT BEFORE
THE SWITCH. The Wii U was very recent! Apart from a few notable and unfortunate departures since
those days, this Nintendo we have right now is the same Nintendo. And they are very much still
capable of making mistakes. Maybe even big ones. However, there is something that Nintendo’s
got going for them this time around. The Switch wasn’t just luck on their part. It was born
from a very dramatic shift in the company’s thinking. The Switch is not a gimmick. Switching
effortlessly between TV and handheld play is not some silly little feature most people
will ignore. It’s extremely functional, it’s convenient, it fits any lifestyle by design,
and it doesn’t get in the way of the games themselves WHATSOEVER. The games aren’t weird,
they don’t use multiple screens, they don’t have to use motion controls or weird controllers
or anything. They can just be good games. And that’s another thing. Nintendo still has some
work to do in this department, but for the most part this generation has primarily been about
fun games first and foremost. They’ve eased up on the weird and focused on creating games that
still have that Nintendo level of creativity and quality, but appeal to much wider audiences.
The kinds of sequels that you’d expect from a new generation. The biggest Zelda ever, the biggest
Mario ever, the biggest Smash Bros. ever, the biggest Animal Crossing ever. And this has paid
off. HANDSOMELY. Like we already talked about, this strategy has seen them become bigger and more
profitable than ever. And it came from a big shift in their philosophies. This is what gives me hope
that their next system won’t be another gigantic misstep. They won’t forget everything they learned
with the Switch and start putting out more weird, gimmicky niche stuff on a weird, gimmicky
system the general audience has no interest in. It’s technically possible, but I see
no real reason to imagine it will happen. So that answers that question, but let’s
finally get to the main question posed by this video. Even if the next system is a success,
can it possibly match the success of the Switch? Can Nintendo maintain this momentum, maybe even surpass it? And finding
that answer is a bit more complicated. What Nintendo’s got going for them is momentum.
The Switch is still selling. Demand is still very strong. And people aren’t stuffing their Switches
in their closets to collect dust with their Wii Fit balance boards. They’re still PLAYING. They’re
still buying the big new games. Whenever Nintendo releases NSO numbers we see that a big chunk
of the install base is paying for the service, suggesting that those people are actively engaging
with the system, and we can assume that many more people are active while simply not paying for NSO.
And over these last seven years Nintendo has built itself up into a household name again. Longtime
Nintendo fans are happy. Fans of previous generations who fell out of touch with the company
have returned. The Switch has even tapped into some of that casual crowd, not through gimmicks
but pure quality and ease of play, and those more organic fans are more likely to stick around. And
perhaps most importantly, it’s the kids. One of Nintendo’s biggest problems before the Switch was
that they were putting out games that appealed to kids on the surface, but didn’t necessarily appeal
to the ACTUAL wants of modern kids, especially in the face of other massively popular properties.
But now more than ever their games appeal to kids and adults alike, and younger folks are finally
playing their games in much bigger numbers. And that right there is a long-term benefit. Much
of our tastes are determined by what we engage with as children, and the Switch has created
many lifelong Nintendo fans, I have no doubt. So logically, Nintendo should be able to carry
that momentum into the next generation as long as they skip the big gimmicks and keep
the great games coming. But here’s the thing about all that: consumers are
a fickle bunch, and hype is fleeting. One success, no matter how huge, NEVER
guarantees another of equal size. It’s just not how things work. The market
changes. PEOPLE change. Plenty of people do end up jumping on something because it seems
like the thing everyone’s jumping on right now. The Switch is new, it’s got this cool concept,
Zelda looks amazing, let’s go for it. And I fully believe that the next system really should just
be the same thing again but better, but I also recognize that Nintendo will lose people when that
hype level just isn’t quite as high. It’s not as much of a BIG THING, you know? I mean all of it,
the beginning of the generation with its brand new hybrid concept, its huge Zelda and Mario, then
the pandemic Animal Crossing craze. You can’t expect to replicate those levels of hype. And
if your numbers are inflated WHATSOEVER by hype, then a hype cycle that doesn’t match means
that the numbers won’t quite match either. On the plus side again though, I don’t
think shallow hype is THAT much of a contributing factor. If it was, then the Switch
wouldn’t still be selling as well as it is. The absurdly-hyped Wii had an overall shorter
lifespan and dropped off a cliff at the end, whereas the Switch took longer to peak and has
been declining more gradually. This indicates an overall healthier life and more genuinely
engaged customers. And again, this is largely because Nintendo has focused on all the right
things this generation. As long as Nintendo isn’t relying ENTIRELY on pure hype going into next
gen, as long as they keep focusing on what they SHOULD focus on, they should be in a good place.
But there’s still no knowing how things might pan out. If they had a healthy success, and
they’ve got a lot of dedicated fans now, and they keep delivering, there is indeed a
chance that their success could continue to grow. They could just keep bringing in new fans
faster than they lose the interest of older ones, especially if they keep capturing the
interest of those kids nice and early in life. But I think it’s probably just as likely that
the crazy levels of hype and success this time around might not repeat themselves. Breath of the
Wild was such a crazy new thing, it was so huge, it was different from other open world games.
And I was skeptical that Nintendo could repeat that success. I thought so much later in the
Switch’s life, using the same formula and world, there was a good chance we’d see a huge
decline in sales when the sequel came around. But Nintendo managed to introduce some
crazy new mechanics into Tears of the Kingdom, which recaptured everyone’s attention, and the
game sold tens of millions of units all over again. But like…that whole thing where you’ve
got to constantly keep one-upping yourself, is not sustainable. It’s the hype thing, hype is
fleeting, people are fickle, you can’t hedge your bets on these kinds of gambles. You’ll reach a
point where you’ve just got to put out a game that doesn’t necessarily do anything crazy and new, but
is just really incredibly good. And if you do, and it still works, then you KNOW you’re successful.
I guess what I’m trying to say is that next gen could really go either way. Personally, my gut
tells me that the Switch successor will be very, very successful…but not QUITE as successful. It
won’t hit QUITE the same hype levels or sell the same number of units. It feels more likely
to me that the next system will lose more people in the transition than it will gain.
The Switch is reaching market saturation, we’re getting to a point where everyone’s got
one or more. The value proposition is so high, the library is so huge, the hits are so plentiful,
that I can’t imagine there are THAT many people who still haven’t taken the plunge, but will when
the next system launches. Those people do exist, sure. And there might be a good number of people
who have been waiting this whole time for a price drop, which hasn’t happened. Maybe they’ll
say FINE, I won’t wait for a drop this time, I’ll just get the next system already. Lotta
different people with different tastes and spending habits out there. But I just don’t
think it’s likely that Nintendo will be able to deliver some system concept or games that send
everyone into an absolute frenzy all over again. Though it is possible. We’ve got to consider that
the Switch is MULTIPLE generations behind when it comes to graphical capability and performance.
I don’t doubt that there are many people who just thought the system was too weak, they want to
play beefier, prettier games that don’t sometimes struggle to even run. If the next system is
more like an eighth gen console instead of a seventh gen one, it might be much more enticing
to those people. And those graphics will be a decent jump. Even just LOOKING that much better
might make Nintendo’s new games VERY enticing. Maybe they won’t even need crazy new ideas,
people will just be like “Have you SEEN how the new Zelda LOOKS??? GIMME!!!” If the thing is
priced properly, maybe being shiny and new will be all it really takes to spur more growth.
And on that note, being more powerful will make the system even better for third parties.
Multiplats on Switch have often been dramatically compromised. But right now, there are barely
any PS5 or Xbox Series X exclusives. Most games are still playable on those systems AND on PS4 and
Xbox One, and they don’t even look that different. If the Switch 2 ends up being as strong as a PS4
or Xbox One, then suddenly it’s just about on par with its competitors. Suddenly it’s getting even
more multiplats, and they’re all playable on the go. That’s a HUGE selling point.
So when you look at it that way, it could be that the Switch, despite already being
a huge success, was just the beginning! Just the warmup! And the next system will be even bigger,
even more fully realized. The other companies will be bleeding their bank accounts dry trying to
push for that increasingly small graphical bump, and Nintendo will be right behind them, working
with more manageable specs to make games that look almost just as good on hardware that’s much
more affordable and raking in the billions, through the life of the next system and
beyond! Geez, I’m kind of convincing myself here! The Switch was great, but it was
quite weak, and it was kind of rushed out, and it still managed to be this much of a success.
It could be that it’s just a winning formula. But…you still never know. Nintendo knows better
than anyone that success can be fleeting. Every one of their previous humongous successes–the
NES, the Wii, and the DS–have failed to repeat themselves. The Switch is next in line, and
maintaining the same level of success will require breaking a decades-long curse. However,
it’s much more likely to break that curse because like we talked about, those other systems were
all propped up by hype. They reached people who got all caught up in the idea of having the cool
new thing, then moved on. The Switch is different. And really, it’s the games that will
largely determine what happens. You never know how any game is going to turn
out. You never know how broadly appealing Nintendo’s ideas will be. You never know
if they’re about to make another misstep. Can Nintendo repeat the Switch’s
success? Absolutely. WILL they? I say matching or surpassing its success is
very much possible, though not guaranteed. Though I’m pretty confident that
even if it doesn’t quite match, it won’t be too far behind. It will
still be a very big success. I do think Nintendo simply has a better idea
of how to please its audience nowadays. Like I said, just having Nintendo
games with amazing graphics will really go a long way. I mean imagine
a Mario that looks like a PS4 game? A ZELDA that looks like a PS4 game? Or
a Pokemon that looks like a…PS3 game??
