Nintendo NX Console Set For March 2017
APRIL 27, 2016 • Nintendo Co. Ltd. released its consolidated financial statements for the fiscal year ending March 31, and in the small print was a statement that the Nintendo NX console would be released in March 2017. At the accompanying earnings press conference held in Osaka, Japan, chief executive Tatsumi Kimishima confirmed the March launch for Nintendo’s next system. The executive did not say what markets the NX will be shipped to next March, nor how the console will be priced. The only software announced for the NX is the next installment in the Legend of Zelda series, which will release concurrently with the new system and the Wii U next March. Nintendo also said both versions of the game are being developed in tandem. Nintendo has chosen not to use the Electronic Entertainment Expo in June to debut the NX, which it said will be unveiled later in the year. The gamemaker will use The Legend of Zelda to highlight its presence at E3 instead. In related news, Nintendo will bring its Animal Crossing and Fire Emblem franchises to mobile this fall. Both apps will pack in many more game features than the company’s first smartphone title, Miitomo, plus the Animal Crossing title will be connected to console versions of the game.
Impact: Thanks to conflicting sources there was significant speculation whether the NX would see the light of day during the holidays of 2016 or 2017. DFC’s take was that it would be major mistake for Nintendo to try and release in 2016 and that under any scenario the NX would not have meaningful impact until late 2017. This was projected in our recent forecasts where we assume that even an early 2017 release will be in fairly limited quantity. Our concern is based on Nintendo’s poor record of releasing sufficient first-party content with a new console launch and the current lack of interest among third-party publishers in new Nintendo platforms.
However, we do see signs of hope for Nintendo and definitely do not count them out. The fact they are delaying until 2017 is seen by DFC as a positive for the potential of the NX. Nintendo has simply not had its act together for new product launches and rushing a new product to market in such a highly competitive 2016 environment would be a mistake.
Of course, the March 2017 launch plans are intriguing. Getting away from the crush of holiday marketing could be an astute move. Nintendo has not devoted sufficient creativity or resources to promoting its wares in recent years, and not having to compete with Sony or Microsoft’s holiday marketing could be a plus. But much still remains unknown, including which territories the NX will initially launch in. Although the practice has been to release new systems globally for several cycles, we can see a scenario whereby Nintendo goes back to tradition to release the NX first in Japan.
There is a great deal of pressure for Nintendo to rush the NX out the door but we see a wiser path in a more gradual rolling out of the system. DFC believes there is more early growth potential for a new Nintendo system in Japan than other markets. Console demand as a whole has been down in Japan, but it only takes one product to turn that around. Japan has been crazy for mobile products in recent years but that craze could be wearing off and Nintendo could be there to take advantage of that. Launching in Japan exclusively would lead Nintendo fans elsewhere to pine away for the NX.
Waiting six or more months for a Western launch would build more anticipation and demand than a simultaneous worldwide launch as consumers are forced to salivate while watching YouTube videos of Japan consumers playing NX games. Furthermore, the delay would give Nintendo more time to bring together a marketing message and get more titles in shape for the launch in Western markets. Most importantly, DFC is convinced that it is a mistake to release the NX globally before it is ready.
As for the mobile news, Nintendo finally entered the mobile fray with an additive strategy to reach out to non-core consumers with new IP. We like that the follow-up to Miitomo is two core Nintendo franchises in Animal Crossing and Fire Emblem. Bringing core Nintendo IP to mobile can’t hurt the gamemaker’s bottom line, and may actually do a lot of good in terms of expanding reach. DFC still sees Nintendo’s mobile play as more focused on Japan, but so was Pokémon back in the day. Big things could come from good Nintendo mobile games. Of course, Nintendo’s mobile strategy is another indicator the firm is starting to look more at trends in its home market.