Nintendo Switch: Analysts dig the concept but worry about processing power

The Nintendo Switch is a bold move from Nintendo to get back into the good graces of gamers with a hybrid device that blends a traditional home console with a portable device. The company announced today that the Switch will arrive in March 2017, and it runs on a custom Tegra processor from Nvidia.

The announcement video showed that Nintendo is targeting an older audience of teens and young adults with this system. GamesBeat asked some market analysts what they thought about the system, and here are some of their answers.

Brian Blau, analyst at Gartner:

Nintendo has come up with a unique and intriguing combination of video game console that is both portable and TV-based with Switch. The vision for Switch is clear: users can play their games wherever they want, mobile or at home, and its reconfigurable controller allows for enhanced game play on the tablet or can transform into a more traditional-styled controller for TV gaming. Without knowing details of the price or global avaiability we don’t yet know how consumers will react, but early indications are that reaction to Switch is positive and could help Nintendo regain some lost momentum in the game market.  The inclusion of Nvidia Tegra is one of the more interesting developments with Switch. GPU acceleration is key to great gaming today, but Nvidia hasn’t any recent design wins in the game console market before Switch so today marks a turning point in their strategy as they continue to dive deeper into the game market.

Billy Pidgeon, longtime game analyst:

Nintendo Switch appears to be the best integration to date of the portable game console and the home entertainment system. It will be the first handheld gaming system that can provide not only lean-in mobile gameplay on the device screen, but also lean-back living room gameplay on the television screen. And both experiences appear to be satisfying where previous portable systems from Nintendo and others have failed to deliver decent gameplay on larger monitor screens.

The third party support includes a very good number of top developers, publishers and tools providers that is sure to grow with the handheld’s installed base. Switch can give developers and publishers a single platform to develop for that supports portable and home gameplay. As Wii U has failed to attract ideal third party support, Nintendo can now regain this important asset to increase the software attach rate to a far more profitable level. Of course, strong and steady hardware sell-through is necessary as well as software unit sales. Hardware sales will be affected by factors we can only speculate at this time, including price, supply and an equally strong and steady pipeline of high quality software releases. But Nintendo knows this and will hopefully close the gap between anticipation and delivery of first and third party titles more tightly than they have in the last few hardware launches. If they can satisfactorily deliver on these fronts, Nintendo can start with the ideal market of teens to young adults that will attract aspirational growth to younger and older demographics.

Custom Tegra chips from Nvidia should provide powerful processing and performance that will be good for Nintendo and for Nvidia. Switch’s performance will likely be leapfrogged by home consoles but will be sufficient for the use cases of portable and in-home gameplay, Where Nintendo’s Wii and Wii U processing performance failed to compete with competitive consoles from Sony and Microsoft, these also failed to provide satisfactory portable gaming experience outside of the near-field porting capability of the Wii U gamepad. The dual use cases of Nintendo Switch should make the new device more rather than less competitive with stationary game consoles which lack similar portability.

Nintendo Switch looks exciting, but unanswered questions concerning Wii U and its successor remain. Nintendo will of course continue to support Wii U, but will the company invest deeply in closing Wii U’s hardware gap with PS4 and Xbox One?  Even if Nintendo plans to continue to compete in the stationary console market. waiting out the competition’s launches may be the way to go. Will Nintendo go all in on Switch to sit out the next generation console launch window? That could be the smart move. After all, how many more home console hardware cycles will there be, now that software delivery to television without complex hardware becomes more ubiquitous with smart TVs and devices such as Steam Machines?

Of course, portable game systems still have to compete with mobile games on phones, but the dominant free-to-play limits quality gameplay and profit margins for most developers and publishers where Nintendo’s continued success on console quality portables allows third parties to deliver high value software units that can bring in high margins on initial sell-through as well as downloadable add-ons.

Anshel Sag, analyst at Moor Insights & Strategy:

I believe that Nintendo’s target market are millennials who are on-the-go. That’s why you saw Nintendo’s ad target 20-somethings rather than kids. They will get kids no matter what, they’re already used to gaming on tablets. The eSports angle is also interesting, even though I’m not sure it’s relevant with most Nintendo titles. I believe Nintendo has delivered the exact for factor that they had promised and delivers an innovative way to play alone and with friends. I’m a little surprised there isn’t a streaming angle involved but that might come later. Perhaps it was inferred by the eSports arena.

The choice of picking a Tegra means to me that Nintendo wanted something with a lot of GPU horsepower and capability. Nvidia has long needed a console design win, so it’s a good that they’ve won the Switch. It also makes sense that the Tegra chip would be selected for a console/tablet for factor since Nvidia Tegra chips have shipped in both in the past. I suspect this is the Pascal refresh of the Tegra, so hopefully that translates to better battery life and performance.

I think that Nintendo is finally challenging the idea of a TV centric single purpose console. Console streaming breaks outside of that idea, but it will never be as good as being able to take your console with you wherever you go. It will also change the way that games are made and how multi-player is employed in games. Hopefully Nintendo makes all of these new ideas work together well, knowing them, they will.

Joost van Dreunen, CEO of SuperData Research:

The Switch will likely be most popular among a younger audience: its functionality is uniquely geared toward preteens and teenagers. While the device seems much less like a toy than we’re used to from Nintendo, its features like backseat multiplayer and the ability to have several people play using a single piece of the controller target Nintendo’s traditional audience.

Evidently, tablet- and smartphone-based gaming has disrupted Nintendo’s overall model as it now seeks to get in front of it by offering a combined experience that builds on the seamlessness of in-home gaming using a tablet but still relies on the sale of cartridges. The big questions marks for the Switch are its battery life and online connectivity.