Was Nintendo right to opt out of the graphics arms race?

[IcaroRibeiro]

It was the right call

While Nintendo gave up a significant portion of the market, this strategy created the sense that Nintendo belongs to a distinct submarket within gaming

The PS5, Series X|S, and PC storefronts (Steam, Epic, etc.) all compete for essentially the same audience. While this audience is at least three times larger than Nintendos player base, Nintendo has built a distinct image and value proposition that cant be found elsewhere. There is a clear reason to own both a Sony and a Nintendo console, or a PC and a Nintendo console

Nintendo console sales also appear to be quite inelastic relative to other consoles, that is, they don't seem to be meaningfully affected by how well competing platforms perform. Nintendo can achieve success regardless of how many units Sony and Microsoft sell combined

This can be somewhat dangerous, however

Because Nintendo consumer pool is already much smaller than that of other consoles and PCs, Nintendo must fight for consumer spending every generation. By contrast, other consoles and PC storefronts can take a large portion of their user base for granted

It's relatively easy to skip a Nintendo console: at worst, you miss a handful of exclusive games that are likely be re-released in the subsequent console anyway, which is a trivial trade-off for anyone who isn't huge a Nintendo fan. On the other hand, skipping both Sony and Xbox and not owning a PC for a whole generation (I'm thinking on ~7 years) effectively means giving up modern gaming and almost every major release every single year. That can happen, specially if you are a busy adult, but it's rarer