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Media & Entertainment

Nintendo learns Wii U lessons to reap Switch profits

Software strategy of inundating market with new games stimulates strong demand

The scarcity of the Nintendo Switch continues. (Photo by Wataru Ito) 

OSAKA -- Sales of the Nintendo Switch gaming console are expected to top 100 million units in the fiscal year ending in March 2022, surpassing those of the old Wii U console.

Nintendo's software strategy for the Switch looks much stronger than for its predecessor. 

Nintendo sold 28.83 million units of the Switch in fiscal 2020, bringing the cumulative total of sales to 84.6 million, the home gaming company said on Thursday. Nintendo is forecasting sales of 25.5 million consoles for fiscal 2021, which will surpass the 101.63 million units sold of the Wii U.

Data on software sales since the Switch was put on the market in March 2017 shows that Nintendo has successively released new games for the console for four years in a row.

As far as packaged games available at mass home electronics retailers and other shops are concerned, the cumulative total of titles released in Japan stood at 849 as of the end of March.

The total was 56 in the first year, 245 in the second and 508 in the third. That exceeds the 111 titles released for the Wii U by nearly eightfold. The Wii U was launched in 2012, but only 35 and 64 games were released in its first two years. 

To develop a game, special development engine software is needed. Nintendo used more limited old engines for Wii U games that were mostly developed in-house. Although these included a number of hits, sales gradually stagnated. Nintendo has lately been able to use much more versatile creation tools, such as Unreal Engine 4 and Unity.

General purpose development engines that are used to make smartphone and PC games have meanwhile enabled new companies to enter the market. It has also been become easier to share games developed for one console with other brands.

Nintendo restricts the product data it releases, but as of May 6 more than 3,100 dowloadable titles were available to gamers.  

"The window for the development of games has become much wider," said Masahiko Nakamura, president of Indie-us Games, an Osaka-based company developing games for the Switch and other consoles.

Games for the Switch "can be developed even by individuals," Nakamura said. The development engine can be used free of charge, or a dedicated development kit can be purchased from Nintendo for tens of thousands of yen.

The market for "indie games" developed by individuals and start-up developers has been gathering momentum. In December 2020, for example, Among Us, a game developed in the U.S., was released exclusively for download on the Switch. The multiplayer game identifies imposters hampering work on a spacecraft. In March, it was the second most downloaded game for the Switch, after Capcom's Monster Hunter Rise, and overtook other popular titles, including Animal Crossing.

The Switch is a "rare" console in that it has lineup of games that range from full-scale to more niche offerings, according to Hideki Yasuda, a senior analyst at the Ace Research Institute.

There is more in store for the Switch with a second round of popular games is in the pipeline. Nintendo recently said it would release Splatoon 3 in 2022 as the sequel to Splatoon 2 which was released in 2017. It also plans a sequel to The Legend of Zelda.

"Nintendo used to release one intellectual property per hardware," said Hirokazu Hamamura, digital content adviser to Japanese media conglomerate Kadokawa Corporation. Splatoon 3 will follow, Hamamura said. "The life span of the Switch will be extended for sure if second-round titles are introduced one after another."

Now in its fifth year, Nintendo President Shuntaro Furukawa said: "The Switch is only in the middle of its life cycle as a game console."

At the halfway point in its potential lifespan, analysts wonder if it can maintain momentum. There is likely to be much less of a tailwind this year from people stuck at home because of the COVID-19 pandemic. 

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