Nintendo gambles on Switch to flip its fortunes

For all its brand equity, it’s been a long time since Nintendo has enjoyed any real sense of stability. The brand legacy may be part of the problem: it’s a household name that evokes nostalgia for the early days of gaming. But it hasn’t shown true innovation since the runaway success of the Wii more than 10 years ago.

Last year saw the company’s value skyrocket thanks to its involvement in the creation of Pokémon Go. It then plummeted back to earth, however, once it became clear that Nintendo was only a bit-player in the phenomenon. To be fair, Pokémon Go itself appears to have “died faster than a homeless dog”, in the words of one online commentator. Nintendo’s reluctance to fully embrace the potential of the mobile gaming sector as a whole seems a missed opportunity — although it is stepping up its efforts in this space with the global launch of Fire Emblem, a controversial ‘gacha’ game (one that encourages players to spend money on in-game items to enhance their experience) for Apple and Android devices.

Either way, many see a continuing focus on mass-market hardware as out of step with modern times. The Wii U, which came out in 2012, was a flop, selling fewer than 14 million units against the Wii’s 100 million. So a great deal will be riding on the Switch, a gaming device that can be used in both handheld and console mode, which became available this month.

Make or break

From a brand perspective, 2017 is “the critical year” for Nintendo, says Dr Serkan Toto, CEO and founder of Tokyo-based gaming consultancy Kantan Games. The Switch has a good deal in its favour: it’s a unique, attractively designed product from a brand people like, and has drawn strong pre-orders.

“It’s a big bet, as they need a hit product,” says David Brabbins, associate partner at Prophet, a branding consultancy. “Brand-wise, it seems like a classic Nintendo move: unexpected, fun and accessible. Nintendo has a strong track record in both consoles and handhelds, and now they are betting on combining the two.”

Game of risk: As the Switch is Nintendo’s first major product innovation in over a decade, the brand has a lot riding its success.

Yet the initial response to the Switch from investors has been less than enthusiastic. While the concept of a seamlessly portable console is novel, many are doubtful that a handheld device has a future in a world dominated by smartphones and tablets. Marketing, encompassing everything from communications to pricing and the games Nintendo offers, is likely to be a key factor in the product’s success or failure.

The challenges the Switch faces are clear. To begin with, in its portable form, it’s an additive, not a substitute, to the smartphone, notes Brabbins. “This category is littered with casualties,” he says, pointing to the PlayStation Vita as an example that failed to make much of an impact. The Switch is “caught in the middle between casual [smartphone] gamers and console gamers, who likely own a PS4 or Xbox already”.

In launching the Switch, Nintendo needs to be seen to align with the modern gaming market, says Michael Sheetal, founder and CEO of PlayBrain, a marketing agency focused on gaming. But it may struggle to do that given that the device is bulkier than a smartphone and underpowered compared to consoles like the PS4 or Xbox One.

It’s also important for Nintendo to learn from the mistakes it made in marketing the Wii U. Firstly, in contrast to the Wii, the timing of its launch — when mobile gaming was on the rise and console competitor quality had strengthened dramatically — was badly off, Sheetal says. The product lacked innovation, but perhaps even more importantly, Nintendo failed to convey the advantages it did have. Education will be key in any messaging designed to promote the Switch.

“What they absolutely failed at [when launching the Wii U] was to communicate to the target group what the Wii U actually was,” Toto says. This resulted in an anticlimax. “The messaging this time [for the Switch] is much clearer: a home console you can also use on the go. This clearly differentiates it from competitors and from the Wii U. It’s the first time a hardware maker has come up with a concept like this so it’s easier to explain, but my concern is — who is the actual target group for this device?”

Everything to everyone

For Nintendo, that’s easy to answer: everyone. But this isn’t 2006. “Their marketing needs to evolve to a new target that is excited to try it, but they have a difficult job ahead,” Sheetal observes. “‘Nintendo is for everyone’ doesn’t work when Apple is for everyone and Android is for everyone as well.”

At US$300, the Switch will be cheaper than the Wii U, which — incredibly — never lowered its $350 tag. But Toto thinks it will still be difficult to persuade gamers who have moved to smart devices to part with that amount of cash, not to mention an additional $60 for each piece of software. Winning people over will predominantly come down to the experience, and that needs to be underscored in
the messaging.

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“It needs to be much better than playing games on a tablet,” Prophet’s Brabbins says. “The way Nintendo marketed the Wii by showing the gamers’ gestures and facial expressions was genius as it positioned the console as a fun machine while highlighting what was unique to it — the gesture-powered controllers.”

The brand should take a similar approach with the Switch, showcasing its key points of difference to other consoles on the market and Nintendo’s content IP, such as Zelda and Mario, he suggests. 

Nintendo has already generated a good level of interest on social media in the US by highlighting new titles including Arms, Legend of Zelda and Super Mario Odyssey. But TV is sure to play a lead role, Toto says, given Nintendo’s strategy of targeting “everyone with a minimal chance of playing games on the device”. 

As one might expect given the lack of audience definition, the advertising has been a bit of everything — “schizophrenic”, in Sheetal’s view — encompassing family fun, serious competition, esports, and even a dash of darkness and aggression. One early spot from Germany showed a gamer engrossed in Mario Kart while sitting on the toilet.

Realistically, the Switch is unlikely to recreate the success of the Wii. But Toto is optimistic that it will fare much better than the Wii U did. Nintendo will, of course, need to deliver on its promises in terms of technology, which it failed to do when it came to the Wii U. The company will also need to release innovative titles that really make use of the cross-format platform, Sheetal points out. This will be crucial post-launch; riding on nostalgia and goodwill won’t cut it at this stage of Nintendo’s game.

“Ultimately people buy consoles for playing the games,” says Sheetal, adding that he has pre-ordered the Switch himself.

“Most console purchases are for a specific title they really want. With the Switch, that title is Zelda, [not] a bunch of thus far underwhelming supporting-cast games. If [Nintendo has] more surprises on the way for us, that alone could carry them back into significance.”