Tech

Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

Nintendo's new games console isn't named for its key feature. It's a plea: Switch.

Catchy name, catchy concept.

Instead of choosing between a TV-connected machine and a handheld device, the Nintendo Switch offers both. Rather than slaying beasts from the comfort of the couch, fans can slide out a tablet-like unit from its docking cradle, switching it to a handheld device, and head to the great outdoors where they can continue the battle from a park bench.

In a three-minute video released late Thursday, the Japanese company pitched heavily to a hipster crowd that supposedly doesn't want to choose between playing video games and walking the dog or attending a rooftop party.

Within 12 hours, the clip attracted close to 5 million views on YouTube, more than 270,000 thumbs up and 81,000 comments. It also got 9,000-plus thumbs down, which is quite a large amount of negative feedback for a games console. Investors share that sentiment, sending Nintendo down as much as 7.1 percent in Friday morning Tokyo trading.

Not Impressed
Investors aren't wowed by Nintendo's Switch, sending the stock down the most in three months
Source: Bloomberg

This reminds me of the day four years ago when Asustek unveiled its PadFone, a tablet with a slide out smartphone that made it a two-in-one device. Executives were elated by their brilliance. The crowd guffawed (and not in a good way.)

Nintendo clearly thinks it has come up with something great. A device that can capture both the game-loving console crowd and the casual mobile gamer might give it a shot at unseating Sony's PlayStation and Microsoft's Xbox franchises. With few details so far unveiled, including price, we can't yet know whether Switch will entice users to do just that.

Nintendo Lags in Consoles...
PlayStation and Xbox dominate console hardware sales with the handheld 3DS being Nintendo's outlier
Source: VGChartz

What the device does unveil is the unfortunate strategy dilemma Nintendo faces: Stick with consoles or go mobile. Or try to straddle them. The runaway success of Pokemon Go this summer shows that its catalog of games and characters are as appealing as the hardware they run on. And yet data from VGChartz show that Nintendo not only trails in console hardware sales, but in game catalog sales, too.

...Nintendo Lags in Games Sales...
Its Wii, released a decade ago, sold more software units than any of its other offerings, yet still trailed PS3 and Xbox 360
Source: VGChartz

Of the top 10 console games this year, not one is for a Nintendo system. The best it can manage is No. 11, with a Pokemon title. The games that are selling well tend to be graphics- and sound-intense titles with richer storylines, areas where Nintendo doesn't fare well.

The Games Aren't as Compelling...
Not a single Nintendo title appears in this year's top, 10, which is dominated by Sony's PlayStation 4
Source: VGChartz
Note: Data are for yearly sales published by VGChartz.com on Oct. 21.

Those richer titles also often (not always) sell for a higher price. This means they not only garner more revenue, but the high volume coupled with higher price indicates that gamers find those titles more compelling and value them accordingly. While Nintendo can look to Pokemon Go as a sign that its characters do attract interest, the company should consider how much money gamers paid to play (usually none) and how quickly the phenomenon dropped off, before committing to a mobile-only strategy.

...and Nintendo Lags in Games per Console
Fans of its games machines buy, on average, fewer games than for PS and Xbox consoles
Source: VGChartz, Bloomberg

The other thing it needs to weigh is the loyalty of the fan base. The best way to judge that is to look at how often people shell out money for a game, and in this regard Nintendo garners fewer sales per console than its rivals.

With the unveiling of its new hardware, and the buzz it's already created online, there's clearly an interest in what Nintendo has to offer. But will it be enough to make gamers, well, switch?

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net