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Why Nintendo keeps coming back to classics like Pokemon

On Wednesday, the Japanese gaming company announced the launch of two new Pokémon games on its Switch console: Pokémon Sword and Pokémon Shield.

This decision is a sign that Nintendo is trying to use adaptations of old favorites to breathe new life into its Switch gaming device. Two years after its successful debut, Switch's sales expectations have proved too ambitious, according to Michael Pachter, an analyst at Wedbush, a private financial services company. Nintendo has responded by giving people what they want – the classics they fell in love with years ago.

"Pokemon is absolutely their sweet spot," said Pachter. "They will sell 12 to 20 million [games]. This is something that Pokédads will buy because they remember and love the Pokémon brand. "

Pachter told CNN Business that Nintendo had at least 30 different brands, including favorite brands such as the Mario, Zelda, Pokémon and Super Smash Bros. franchises.

"What impresses at Switch, is that in the first two years, four of their biggest brands are available," he said. "Nintendo, it's like the Disney games." It's like bringing out a new Marvel or Star Wars movie – it's guaranteed because people love the brand. "

Pachter praised Switch's deployment and noted how different it was from the Wii U console, which did not feature big-name games. Released in 2012, the Wii U was an attempt to capitalize on the success of Nintendo's original Wii, but it failed to make itself understood.

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The Nintendo Switch console had the opposite problem. It was so popular when it was launched that there were problems to meet the demand. The device, consisting of both a mobile gadget and a home console, has sold to 10 million units less than a year after its release. launch in March 2017.

This helped to boost Nintendo's earnings and share price. The company recorded a 25% increase in profits compared to the same period last year. Making popular brands available on Switch has also paid off. In its third quarter results, released in late January, Nintendo has raised its switch gaming sales forecast from 100 to 110 million euros.

Nintendo President Shuntaro Furukawa has repeatedly stated that the company will continue to rely on well-known franchises and new versions of popular brands to "enhance the attractiveness" of the switch.
Nintendo (NTDOF) recently unveiled new games from the popular Legend of Zelda and Mario series.

He also launched a 99-player online version of the Tetris puzzle game. Tetris 99 is a "Royal Battle" game, a kind of video game that simultaneously challenges multiple players. This forces them to fight to survive, to explore and to recover in a game. The title has become extremely popular with the rise of similar games like Fortnite.

But Pachter noted that a number of Switch games sell for about $ 10, far less than games for rival consoles such as Microsoft's Xbox and Sony's PlayStation. He said the lower price of some of the Switch games could have an impact on revenue.

There are also signs that things are already slowing down.

In its third quarter profit and loss account, Nintendo lowered its Switch sales target from $ 20 million to $ 17 million. It has also reduced the sales forecast of its 3DS portable system from 4 million to 2.6 million.

According to Mr. Pachter, the only way for Nintendo to reach its original $ 20 million sales goal is to lower the price of the switch by about $ 100 and simply make it a handheld.

Nintendo was not available to comment.

While the novelty of the Switch is fading, the Nintendo of America is also changing.

Last week, Nintendo named Doug Bowser as head of its US operations. Bowser – who had a brief moment of viral celebrity this month for sharing a name with the notorious villain Mario – will take over the role in April of Reggie Fils-Aime, who had been running Nintendo of America for 13 years and was popular with fans. .

Since Nintendo is a Japanese company and most of its business is based abroad, Nintendo of America focuses primarily on retail and partnerships.

"Reggie has spent a lot of time as the brand's spokesperson, but Doug will market it," said Pachter.

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