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Tuesday, January 25, 2022

Talking Point: Are Nintendo’s Exclusives Enough To Win A Next-Gen Handheld War?

Switch PR shot
Image: Nintendo

When it comes to the world of entertainment technology, everyone likes to get ahead of themselves. Everything is ‘the next big thing’, until about a year later, that is, when it’s evident that the tech isn’t ready yet. Augmented reality and virtual reality are good examples; they’re both exciting technologies with some excellent games and a handful of major success stories, but the majority of gamers around the world are still playing on flat screens with controllers (or on touchscreens with their smartphones / tablets). There have been fantastic innovations and shifts in the market in the last five or so years but, actually, the mainstream scene continues to tick along with a lot of the same conventions.

This is also evident in discourse around Nintendo and the Switch, as well. Every time a new hybrid / portable device comes along people wonder whether it’s a disruptor to the Switch-led sector of the gaming market. Yet, to date, none of them have been, and none are likely to be in the next year or two at least — for several reasons.

These devices are often small-scale and not targeting the mainstream market, and are frankly designed for niche audiences that simply enjoy the Switch comparison. This $1200 portable PC is a good example of a device that offers a fascinating glimpse of a hypothetical Switch — one unbound from boring mass market practicalities such as a reasonable price point or decent battery life. One superficially Switch-like device that bucks the trend a little is Valve’s Steam Deck, which is attempting to offer a sane range of prices with the appeal of playing huge Steam libraries on the go.

There are multiple reasons why Deck / Switch comparisons are off the mark, however. One is Valve’s intent with the device — even the keenest advocates for the Deck can see that it’s not aiming for mainstream impact, at least not in this early form. Not only have purchases been limited to Valve’s own platform, but manufacturing and logistical challenges mean that even existing pre-order deliveries have been pushed back well into 2022.

These aren’t criticisms, to be clear, but an assessment of what Valve is trying to achieve with Steam Deck. It’s setting the scene and testing the waters, seeing how the business of producing portable gaming hardware works and keeping Steam prominent in the conversation while rich companies like Epic attempt to chip away at Steam’s incredible digital monopoly. For Valve and its most eager supporters, the Steam Deck is fascinating and, yes, exciting.

Steam Deck 2
Image: Valve

As a proposition, though, it’s not an immediate challenger to Nintendo or the Switch approach. For one thing, Valve has clarified that the Deck will have no exclusives of any kind, saying “it’s a PC and it should just play games like a PC”. This isn’t surprising in the slightest, but another reminder of what this device is trying to achieve. It’s not a platform, Steam is the platform — the Deck is just Valve-produced hardware showcasing how far portable PC technology has progressed. Steam is a hugely popular storefront, still the leading powerhouse in PC and Mac gaming and, as the company has made clear, the Deck isn’t shifting that focus; if anything, this is designed to remind people that they’re probably sitting on a huge Humble Bundle-bolstered Steam library that they could be playing on-the-go with this bit of kit.

Nintendo’s first-party franchises are often highlighted as the key differentiating factor, but franchise power alone is not enough… Switch hits some other key areas that are just as important as the games

The lack of exclusives is clearly a big difference to the battle typically undertaken by Nintendo, Microsoft and Sony. The technology of Switch (and all Nintendo hardware since the GameCube) means that its exclusives aren’t technological showcases, but their appeal is driven by their other qualities, the fact they’re often unique to the market and tap into iconic IPs. Nintendo has continued to keep its premium entries in franchises like Mario, The Legend of Zelda, Animal Crossing, Mario Kart, Metroid and Pokémon solely on its hardware. There are spin-offs and alternative games in some cases on mobile, but the big-name ‘main’ releases remain console exclusives. These games are important in driving initial buzz — like The Legend of Zelda: Breath of the Wild did at launch — and then for maintaining momentum as the generation progresses.

Of course, Nintendo’s under consistent scrutiny in a broader sense as similar ‘hybrid’ concepts and products emerge, whether in full-blown devices or grips / controllers for phones. There are key strengths beyond exclusives in the Switch offering that, when combined, have contributed to its leading market position despite the sporadic appearance of ‘rivals’ and the ongoing opening up of iOS and Android gaming to support controllers and TV play.

Nintendo’s first-party franchises are often highlighted as the key differentiating factor, but franchise power alone is not enough, as underselling systems like Wii U and even GameCube demonstrate. The Switch hits some other key areas that are just as important as the games — affordability and ease-of-use being key. A significant number of players, of various kinds, seek gaming systems that are a sensible price and are immediately intuitive. PC gaming may be the apex in terms of graphical experience, but it isn’t simple or affordable. Consoles typically are both, and in the case of the Switch it delivers a hybrid setup ideal for TV or portable play, has easy-to-access games and technically offers multiplayer options and controller flexibility out of the box. It has a number of different tricks up its sleeve, but all wrapped in an immediately understandable and intuitive setup.

Switch Family
Image: Nintendo

Availability and affordable prices also play into another key market — households and families. There’s a reason Nintendo’s current adverts revolve around smiling families in living rooms, or perhaps aspirational photogenic younger people playing Switch while traveling home for the Holidays. It’s not just by-the-numbers marketing, but reflects the fact that Nintendo’s data likely identifies these consumers as hugely valuable for what the Switch offers. Its also a system with plenty of family-oriented games, or indeed more challenging games that are nonetheless colourful and ‘safe’. Nintendo’s take on a shooter, after all, is Splatoon 2.

Nintendo is now, arguably, in a more challenging spot for its next system in terms of ‘getting it right’.

And, at present, these are areas where ‘rivals’ that get talked up and then forgotten are well off the pace. They’re not available in the mass market, and don’t have that vital combination of clever design, accessibility, affordability and exclusive games.

It’s important to remember, though, that Nintendo can’t afford to get over-confident, or slide into the boom-bust pattern that all of the ‘big three’ have experienced from generation to generation. Nintendo is now, arguably, in a more challenging spot for its next system in terms of ‘getting it right’. Unlike in past generations, Nintendo can’t prop up an underperforming home console with sales of a popular portable. The one system model is hugely lucrative and profitable when it works, like the Switch, but if a single platform flops that’s a tough scenario.

Qualcomm Portable
Image: Qualcomm

And while Nintendo’s competition in the hybrid space isn’t much of a threat right now, the signs are there that some may be planning to make a breakthrough, even if it’s a few years away. Not only is Valve testing the water, but major mobile chip producer Qualcomm is producing a developer / concept device, no doubt designed to show its portable performance as a showcase to major companies and platform holders; similar to how NVIDIA’s Shield devices likely caught the eye of Nintendo for the Switch’s choice of the Tegra X1 GPU. Add to that the never-ending rumours that have companies like Apple and Microsoft supposedly exploring these areas. A lot of that noise also seemingly revolves around cloud technology, with the idea being that increased access to 4G and 5G in the coming years will open up streaming tech to potentially billions of players.

Right now, the Switch is the only major product filling its particular area of the market, which helps explain why it still shifts 20 million+ units per year. Yet Nintendo’s next move will be critical not only in maintaining the Switch-generated momentum, but in reading trends and seeing off future rivals. So, when you see headlines about disruptive hybrid devices to ‘challenge’ the Switch, look beyond the hyperbole to a few years down the road — that’s where Nintendo’s biggest challenges are to be found.

Don’t bet against the company still coming out on top, however; as history proves, Nintendo is full of surprises and nothing if not resilient.

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Jennifer Jones
But sometimes I can be lazy. I spend a lot of time studying foreign languages. I spend a lot of time studying foreign languages.

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