Nintendo’s new console still doesn’t solve Nintendo’s biggest problem

Nintendo is considered by many to be the Disney of video games. Iconic characters like Mario and Donkey Kong are instantly recognizable by children and adults the world over, just as Mickey Mouse and Donald Duck are.

But that comparison misses a fundamental piece of Nintendo’s history: games made by companies other than Nintendo.

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Capcom

If you’re like me and grew up playing Nintendo game consoles like the Nintendo Entertainment System, Super NES, Nintendo 64, and GameCube, you likely have fond memories of characters like Chun-Li and Ken from the “Street Fighter” franchise.

Or maybe for you it was “Resident Evil 4” – an exclusive, believe it or not, on the GameCube.

It’s hard to imagine now, but Nintendo was once known for more than its own games. Capcom, the Japanese game developer and publisher of the “Street Fighter” and “Resident Evil” franchises, has largely moved on – both of those are made for Microsoft’s and Sony’s home game consoles, but not Nintendo’s.

If you’ve come to the Japanese console-maker in the past 10 years, though, you’re forgiven for not remembering such a time.

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Nintendo’s Wii was wildly popular, but the console was little more than a means of playing a single game — “Wii Sports” — for many.
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Joe Shlabotnik

Since the Nintendo Wii launched – and exploded in popularity – in 2006, Nintendo has been almost entirely reliant on its own software to sell consoles. And what sells game consoles? Games! Unfortunately, even a game maker as capable as Nintendo can’t sustain its hardware on its own.

This is evident from a cursory glance at sales of the Wii U, Nintendo’s most recent game console:

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Nintendo’s first consoles was the NES/Famicom, followed by the SNES, the N64, the GameCube, the Wii, and the Wii U. The Switch launches on March 3.
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Nintendo

The Wii U is the worst-selling home console Nintendo has ever made, and it’s not because Nintendo didn’t make great games for it.

    “Mario Kart 8” is arguably the best “Mario Kart” game ever. “Super Mario 3D World” is a true delight and one of the best Mario games in history. “Super Mario Maker” is a new concept from Nintendo that enables players to create their own “Super Mario” levels from scratch. Incredible!

Despite these great games from Nintendo – and many more I didn’t mention – the Wii U tanked.

While the Wii U sold so poorly for many reasons, prime among them is a complete lack of support from so-called third-party developers – game developers other than Nintendo.

If you wanted to play the latest “Call of Duty” game in the last decade, there were few chances to do that on Nintendo’s consoles. That also applies to other major franchises, from “Grand Theft Auto” to “Mass Effect” to “Assassin’s Creed.” When entries from those series did make it to the Wii or Wii U, they arrived later and looked less impressive. Since the Wii, Nintendo consoles have existed solely to play Nintendo-made games.

And Nintendo’s next console, the Switch, looks to be in the same situation.

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“Super Mario Odyssey” for the Nintendo Switch looks amazing, but is it enough on its own to sell the $300 Switch?
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Nintendo

Thus far, there is a single “big” game launching alongside the Switch: “The Legend of Zelda: Breath of the Wild.” It’s a gorgeous entry in the long-running “Legend of Zelda” series – made by Nintendo, of course – that puts players in the role of an elfin boy named Link, who’s often tasked with rescuing a princess named Zelda.

Outside of that game, though? It’s slim pickings.

And that’s a problem when Nintendo’s competition, Microsoft’s Xbox One and Sony’s PlayStation 4, have enormous game libraries, cost less, and are more powerful. Nintendo realizes this, of course, as do analysts who cover the video game industry.

During a recent investor Q&A, the question of third-party support for the Switch came up. Shinya Takahashi, a Nintendo director, offered an answer that doesn’t exactly instill confidence:

“Nintendo will keep on creating unique software. By doing so, I believe we will encourage third-party developers to create a number of quality software titles for Nintendo Switch.”

Right.

Nintendo’s argument largely boils down to “We’ll lead by example, and hopefully third-party developers will follow.” It’s a nice sentiment, but recent history indicates that’s unlikely – the laundry list of excellent games made by Nintendo on the Wii U didn’t spur third parties to make games for the Wii U.

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The gimmick with the Switch is that it’s a home console and portable console at the same time. It can be docked at home for TV play, and taken on the go as a handheld.
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Nintendo

More problematic is that the Switch isn’t as powerful as the Xbox One and PlayStation 4.

While those consoles aren’t identical, they have enough in common that game developers can make games for both relatively easily. When it comes to the Switch, however, it’s different enough that blockbusters like, say, the next “Red Dead Redemption” game, aren’t possible. The console simply can’t power the same game that runs on the Xbox One and PlayStation 4, and that’s going to keep the next “Call of Duty” from the Switch.

Apply that same logic to the next “Mass Effect,” the next “Assassin’s Creed,” the next (insert your favorite third-party blockbuster franchise here).

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“Mass Effect: Andromeda” is heading to Xbox One, PlayStation 4, and PC on March 21, a few weeks after the Switch launches.
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BioWare / EA

To be clear, some games from third-party software makers are coming to the Switch.

They’re mostly games from years ago, rereleased on the Switch. That includes “The Elder Scrolls V: Skyrim,” which originally launched in 2011, and “Disgaea 5,” which originally launched in 2015.

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In the Switch reveal, a man plays “Skyrim” on the console.
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Nintendo

These are not the type of third-party games I referred to earlier – the “Assassin’s Creed”s and “Call of Duty”s and “Fallout”s of the world are what matter nowadays when it comes to third-party support. If you’re in the market for a new game console – and you’re not a crazy person like me who buys every game console, regardless of logic – you’re looking for one to serve as many of your wants as possible.

If you’re into Nintendo games and only Nintendo games, it makes sense to buy something like the Switch (though I’d still argue you should wait until the holiday season).

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Nintendo

It’s possible that Nintendo has more to reveal about the Switch that would trump its lack of third-party support.

The new console’s version of the Virtual Console service, which offers access to Nintendo’s incredible vault of games from past consoles, could be a game-changer. If Nintendo could spin the nostalgic grab of its game library into, say, a subscription service – Netflix-style – that could be huge. As of now, there’s no indication that such a thing is happening.

Otherwise, if you’re one of the many people who want a game console that does more than run Nintendo’s own games, the Switch is a hard sell. And that doesn’t bode well for Nintendo, its stock, or its investors.