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Forums - Nintendo Discussion - Reggie admits Switch was a "Make or Break" product after the poor performance of the Wii U

Stuart23 on 30 January 2021

https://www.nintendolife.com/news/2021/01/reggie_admits_switch_was_a_make_or_break_product_for_nintendo_after_poor_performance_of_wii_u

From the article:

"Nintendo of America's former president, Reggie Fils-Aimé, recently appeared on a New York Gaming Awards Twitch stream earlier this week alongside industry counterparts Jack Tretton (Sony) and Robbie Bach (Microsoft).

Reggie was asked what his defining achievement was during his time at Nintendo and touched on the company's transition - as a collective - from the Wii U generation to the Switch. He summed up the hybrid device as a "make or break product" for Nintendo after the "poor performance" of its previous system.

It comes as no surprise the Switch had to be a "hit", considering the Wii U shifted just over 13 million units during its lifetime.

"You know, Nintendo has done so many innovations in the space... I think what Nintendo did with the Switch, after the poor performance of Wii U, I think to me and what I was part of, that's my lasting memory."

"People forget, when the Wii U launched, the performance over that life cycle was so poor, I mean it was the worst-selling platform, I think maybe Virtual Boy was a little bit worse, but Wii U underperformed pretty radically in the marketplace."

"And when your only business is video games that next had to be successful and the Switch continues to be a dynamic platform - selling exceptionally well. And the ability for the company to come up with the concept, to bring it to life, to bring it to the marketplace, to have not only great first-party content but great third party and independent developer content - that is going to be something I will always be proud of."

"Along with so many of the other things I was part of, but the Switch really was a make or break product for the company and luckily it was a hit."

In contrast to the Wii U, the Switch has already sold 68 million units and is barely halfway into its lifecycle.

While Wii U played host to some fantastic first-party titles, at the time it was a rough period for Nintendo (again, because of sales) and in a lot of cases, it was equally as difficult for fans. Fortunately, as noted by Reggie, the situation has drastically changed since then - with Switch not only hosting quality first-party games but also "great" third party and independent content.

Back in 2019, Reggie described the Wii U as a "failure forward" simply because it led to the creation of the Nintendo Switch."



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PAOerfulone on 30 January 2021

“People forget, when the Wii U launched, the performance over that life cycle was so poor, I mean it was the worst-selling platform.”

Oh, I don’t think any of us forgot, Reggie.



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Metallox on 30 January 2021
RolStoppable said:

Exaggerated and overdramatic.

Nintendo did not have only the Wii U during the previous generation, but also the 3DS. If Switch had failed in the home console market, Nintendo could have focused on their monopoly in the handheld market by releasing a cheaper hardware revision to salvage their business pretty easily, so Switch was never a case of make or break.

Despite a poor financial performance last generation, Nintendo had hardly touched their cash reserves to get through the rough times. Nintendo was not on the brink of reaching their end as a hardware manufacturer, because they had enough money for more than one try.

Reggie is a marketing guy first and foremost. The story of the phoenix rising from the ashes sounds amazing, but the reality wasn't even remotely as dire as he described.

I don't think he's referring to the economic side at all, he's just saying that another failure would've made them change their strategy with their home console business, even moreso than with the Switch which is exactly what you're saying, anyway. That is a make or break situation to me. 



My bet with The_Liquid_Laser: I think the Switch won't surpass the PS2 as the best selling system of all time. If it does, I'll play a game of a list that The_Liquid_Laser will provide, I will have to play it for 50 hours or complete it, whatever comes first. 

Metallox on 30 January 2021
RolStoppable said:
Metallox said:

I don't think he's referring to the economic side at all, he's just saying that another failure would've made them change their strategy with their home console business, even moreso than with the Switch which is exactly what you're saying, anyway. That is a make or break situation to me. 

"Make or break" means you either succeed or you are done for good.

Fair enough. 



My bet with The_Liquid_Laser: I think the Switch won't surpass the PS2 as the best selling system of all time. If it does, I'll play a game of a list that The_Liquid_Laser will provide, I will have to play it for 50 hours or complete it, whatever comes first. 

zippy on 30 January 2021
RolStoppable said:

Exaggerated and overdramatic.

Nintendo did not have only the Wii U during the previous generation, but also the 3DS. If Switch had failed in the home console market, Nintendo could have focused on their monopoly in the handheld market by releasing a cheaper hardware revision to salvage their business pretty easily, so Switch was never a case of make or break.

Despite a poor financial performance last generation, Nintendo had hardly touched their cash reserves to get through the rough times. Nintendo was not on the brink of reaching their end as a hardware manufacturer, because they had enough money for more than one try.

Reggie is a marketing guy first and foremost. The story of the phoenix rising from the ashes sounds amazing, but the reality wasn't even remotely as dire as he described.

Hit the nail on the head. Couldn't have said it better myself (literally couldn't) 



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Pemalite on 31 January 2021

If a company can go from printing money to going under after just a single product cycle, then they need better management.
That is *allot* of risk.

This is just highly exaggerated, Nintendo would have still stuck around, they could have survived purely on mini classic consoles probably.



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Jranation on 31 January 2021

The timeline we are in doesn't want Nintendo to fail. They even throwed in a global pandemic which boost the Switch to ensure that.



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Azzanation on 31 January 2021
RolStoppable said:

Exaggerated and overdramatic.

Nintendo did not have only the Wii U during the previous generation, but also the 3DS. If Switch had failed in the home console market, Nintendo could have focused on their monopoly in the handheld market by releasing a cheaper hardware revision to salvage their business pretty easily, so Switch was never a case of make or break.

Despite a poor financial performance last generation, Nintendo had hardly touched their cash reserves to get through the rough times. Nintendo was not on the brink of reaching their end as a hardware manufacturer, because they had enough money for more than one try.

Reggie is a marketing guy first and foremost. The story of the phoenix rising from the ashes sounds amazing, but the reality wasn't even remotely as dire as he described.

I believe somewhere in the past that they said Nintendo has enough room in the bank to make 3 consecutive flops in a row before they consider dropping out of the home console market. 



Mnementh on 31 January 2021
RolStoppable said:
Azzanation said:

I believe somewhere in the past that they said Nintendo has enough room in the bank to make 3 consecutive flops in a row before they consider dropping out of the home console market. 

The number of flops that a company can afford depends on how to handle any given flop. What Nintendo did with the Wii U was to cut down on costs to lose less money on it as opposed to trying to make it sell as many units as possible. Nintendo lost less money on the Wii U than Sony lost on the PS3.

That's why statements that it would take a few Wii U-like flops in a row are correct, because Nintendo's businessmen are competent enough to navigate through rough times.

You could argue though, that the willingness of Sony to power through the failure and burn money is helping the consistency of the Playstation brand overall. Building trust.

On the other hand PS3 never did go as bad as WiiU, especially after it launched in europe (which was months after the american and japanese launch). The eruopean launch did well and somehow saved the image of Playstation a bit.

Also, if we consider Vita, Sony was dropping it like a hot potato pretty fast, so their willingness to eat losses seems to differ. That it didn't tarnish the PS image more is only explainable with how many dissociate in their mind home consoles from mobile consoles.



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Azzanation on 31 January 2021
RolStoppable said:
Mnementh said:

You could argue though, that the willingness of Sony to power through the failure and burn money is helping the consistency of the Playstation brand overall. Building trust.

On the other hand PS3 never did go as bad as WiiU, especially after it launched in europe (which was months after the american and japanese launch). The eruopean launch did well and somehow saved the image of Playstation a bit.

Also, if we consider Vita, Sony was dropping it like a hot potato pretty fast, so their willingness to eat losses seems to differ. That it didn't tarnish the PS image more is only explainable with how many dissociate in their mind home consoles from mobile consoles.

In general, the PS3 is more comparable to the 3DS than the Wii U, because neither the PS3 or 3DS had suffered a complete breakdown of third party support. The point of my Wii U vs. PS3 comparison was that unit sales don't tell you how much money a system lost; it's common knowledge that the PS3 sold a lot more units than the Wii U.

The topic of trust is a different one. Since Switch sold so well, it's hard to argue that Nintendo suffered any long term damage in trust from low Wii U sales. It's much easier to argue that Nintendo reinforced trust with the Wii U, namely that gamers can count on Nintendo to keep putting out new great games even when confronted with absolutely disastrous hardware sales. In other words, even if Switch were going to do badly, you wouldn't need to worry about Nintendo stopping support for the system. The main reason why you bought the console (Nintendo games) wouldn't be at risk.

The console business is cyclical with its hard resets in installed base with each new generation. That's why the idea of building trust through high hardware and software sales is misguided as each new console is evaluated by the market on its own. It's clear that Nintendo knows this, hence why they handled the Wii U the way they did while not lacking confidence in their follow-up console. Nintendo didn't put any importance on high unit sales, but they considered it important to satisfy Wii U owners with continued releases of high-profile software. An individual Nintendo console may suffer a bad fate, but Nintendo as an overall video games brand continues to be trusted.

Consumers perceive Nintendo and Sony in very different ways. For PS fans, Sony's forays into the handheld market were viewed with mixed directions because a good chunk of PS gamers is about (cinematic) high production value games; you don't get that on a handheld which has to deal with technological limitations due to size of the device and battery life. That the Vita tanked was actually welcome by many PS fans because Sony would put all of their resources back into the home console market. Sony's failure in the handheld market can be argued to have strengthened trust in their home console business.

Iv always said sales never determines a systems success when it comes to a business perspective. Success = profits/Revenue. WiiU undersold yet bleed less money than both the 360 and PS3. I am not saying the WiiU is successful however comparing that to the PS3 which lost Sony $6b and the 360 losing MS $4b even tho they both sold 4 times the amount the WiiU did with their hardware, doesn't really make those platforms more successful, more popular yes but popularity can come and goes quite quickly as we have seen from the PS2 to the PS3, the 360 to the XB1 and the WiiU to the Switch. Success is what you take home in the bank.