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Nintendo Switch reveal wows gamers but alienates stock market

Posted by on October 24, 2016.

With Nintendo’s secretive ‘NX’ project finally given a trailer reveal as the Nintendo Switch, gamers have finally been given some answers on Nintendo’s new product, but there are still some important questions left to answer. The trailer does a good job of showing the USP of their new product – a home console which can convert into a portable handheld via two detachable controller pieces, while retaining the functionality and power of its static console form.

Nintendo’s current console iteration, the WiiU, has been disastrous for the company. Between confusing marketing, a lack of processing power and poor long-term uptake from third party developers, the WiiU has been a less than profitable venture to say the least. From what has been released so far, Nintendo seems to be remedying these mistakes, making the Switch both a more well-rounded, versatile console as well as a natural evolution of the WiiU’s gamepad.

The trailer shows footage of the HD remaster of Skyrim being played on the console, indicating a level of processing power much more in line with the competition than Nintendo’s previous two systems. This is backed up by Nvidia, who have announced their industry-leading graphics technology will be powering the Switch. While Bethesda have not confirmed that Skyrim will be a playable title on the Switch, they are a confirmed development partner for the system – alongside an extensive list of other companies, including AAA developers and publishers such as Capcom, EA and Activision, along with lesser-known and mobile developers.

This looks very promising on first glance, but with so much expensive hardware being released recently – VR releases and new editions of the Sony PS4 – the Switch’s price point is an important question. One of the few things not revealed in the trailer, the new console’s launch price instantly became the subject of much discussion. Industry analyst Michael Pachter believes that $300 is the maximum Nintendo can charge to stay competitive. Another analyst, Paul Jackson, speaking to Express Online, suggested that £300 (currently about $370) would be a good launch price, but should drop to £200-£250 for the best chance for mass adoption.

One interesting facet of this reveal has been the stock market’s reaction to the trailer. When the trailer was announced, but before it was shown, Nintendo’s shares shot up by more than $1 billion in value. After the trailer was released, the shares plummeted back down and then some. With what looks like such a promising reveal, what could be behind this lack of faith? It’s possible that investors were hoping for something more akin to the original Wii, which saw great success with its motion controls and targeting an audience beyond the normal scope of gaming. After Pokémon Go’s success and the early buzz around Virtual Reality, it could be that investors are disappointed that Nintendo isn’t making a stronger pursuit of the AR or VR markets.

If so, this suggests the stock market is out of touch with current gaming trends. ‘Innovations’ like motion controls have fallen out of favour with a great deal of gamers, with even VR being met with lukewarm early sales. Consoles with the best longevity have always been the ones with the most support from third-party developers. To see this, one only has to look at the PlayStation 2 or Xbox360. The dominant systems of their respective generations, they were both noteworthy for their accommodating system architecture, attracting a wide range of game developers and resulting in a large library of games which attracted more customers.

Investors may not be pleased by the Nintendo Switch, but Nintendo is clearly learning from its mistakes with the WiiU, and paying attention to the demands of the console-gaming market. Nintendo will be facing some large obstacles caused by its reputation for underpowered consoles and failure to keep developers on board, and may find it hard to win gamers’ trust at first. The Switch needs to show that it can keep those third-party partners for more than just the launch period, but if it can weather the first year or so, the Switch has enough attractive, accessible features to keep strong sales in the long term. While it’s unlikely to ‘redefine’ gaming as Ubisoft claims, if the final product meets the trailer’s promises, it’s sure to be a solid, flexible and appealing product.

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Submitted in: Josh Townsend, Uncategorized |