People often tend to compare the Nintendo Wii U to the Sega Dreamcast. In reality, a more applicable comparison can be drawn between the Wii U and Sega’s previous console, the Saturn. Both consoles followed unprecedented successes for their companies; the Wii for Nintendo and the Genesis for Sega. Both were also pretty big failures.
The Saturn sold 9 million units compared to the 40 million of the Genesis. Nintendo’s Wii U sold 14 million units, compared to the 102 million of the Wii. Both consoles also lost big to their competitors, the PlayStation 4 and Xbox One for the Wii U and the PlayStation and Nintendo 64 for the Saturn.
The Saturn and the Wii U
The Wii U and the Saturn share many reasons for their failure. For one, both suffered from bad and confusing marketing campaigns. The Wii U’s similar name, its focus on the controller, and the debut title of New Super Mario Bros made consumers think that the Wii U was simply a peripheral for the Wii.
Nintendo failed to show why people needed to upgrade. Furthermore, Nintendo aimed for the casual audience they captured with the Wii, but they had already moved on to mobile gaming, which did not require a dedicated gaming device. As a result of this focus, Nintendo failed to interest most of the hardcore gaming audience.
The Saturn’s marketing woes were considerably worse in comparison. The Playstation had previously been announced for September 9th and the Saturn for September 2nd. However, Sega panicked, deciding that they wanted to get the Saturn to the US market first to beat the competition.
So, on May 11th, 1995, right in the middle of E3, Sega CEO Tom Kalinske announced that the Sega Saturn would hit store shelves right then and there. This terrible decision killed the Saturn before it even had a chance. Sega had kept so quiet about this release date that many retailers did not have the system in time for launch. This led to sour retail relationships that Sega never healed.
As a result, certain retailers, such as KB Toys, never stocked the console at all. Furthermore, the console did not receive a marketing campaign to precede its launch, so many consumers did not know or care about the console. Consumer focus was on the upcoming PlayStation, which was being marketed tremendously. Also, the Saturn was $100 dollars more expensive than the PlayStation, which discouraged people more.
Developers were also kept in the dark in regards to the Saturn’s early premature launch. As a result, their games were not ready, so the launch of the system came only with a few first party titles, and almost no third party games. Developers were annoyed, so many of them adapted their games for the PlayStation instead, which seemed like it would be more successful anyway.
Just like the Sega Saturn, the Wii U has received very little third party support throughout its life cycle. When it launched, developers realized that the Wii U was tremendously underpowered compared to the other consoles. As a result, most third party developers shied away from the system, since it was not powerful enough to run their games.
The third party situation was a snowballing issue for both consoles. Whether it was due to power or to a secretive launch, both consoles had few third party games. This led to few people buying the console, which resulted in even less third party support, and so on, and so forth.
The Dreamcast and the Switch
Sega’s successor to the Saturn was the Dreamcast. Unfortunately for them it was another failure, marking the end of their home console endeavor. It was hard to think that Sega would stop making home consoles since they once controlled the market with Nintendo.
Nintendo is now in a similarly sticky situation. The Wii U was their worst selling home console yet. With the exception of the Wii, Nintendo’s home consoles have been on a constant decline. Even scarier, Nintendo seems to be willingly forgoing their ever successful handheld line, merging it instead with the console market.
Nintendo is banking the entirety of their future on what seems to be the successor to both the Wii U and the 3DS: the Nintendo Switch, a console-handheld hybrid. It’s not to say that Nintendo is in the exact same situation as Sega was many years ago, because they’re not. Not at all. They don’t necessarily need the Switch to succeed to keep them in the hardware business.
However, one must admit that another failed console would mean large amounts of trouble for Nintendo. So, given that the Saturn and the Wii U were so similar, why did Sega’s next console, the Dreamcast, fail? And what does the Switch need to do in order to avoid a similar fate?
Before talking about reasons for failure, it’s important to bring up the timing of both consoles. The Dreamcast kicked off the 6th generation, coming out later than any 5th generation console. However, it also came out plenty of time before the PlayStation 2, Xbox, and Gamecube which put the Dreamcast in a weird spot.
The Switch will be in a similar situation, perhaps technically kicking off the 9th generation of consoles. It will be coming out long after the PlayStation 4 and Xbox One, but before Sony and Microsoft’s next console iterations. In the Dreamcast’s case, by the time it was released in the US, the PlayStation 2 was already announced. This won’t be the case for the Switch.
It’s also worth noting that console generation lines might be starting to blur given the “generation 8.5” consoles; the recent PlayStation 4 Pro and the upcoming Xbox Scorpio. These seem like bad news for Nintendo, as in any other generation, they wouldn’t have had any new consoles to compete with.
Though perhaps these console upgrades are a blessing in disguise. Instead of having to compete with 4-year-old consoles which have received multiple price cuts, the Switch will be competing with brand new $400 machines which might make it cheap by comparison. With no new consoles on the horizon, there should be no reason for consumers to hesitate to buy the Switch.
Like with the Saturn, the Dreamcast’s marketing was pretty bad. Not entirely horrendous, but bad nonetheless. Sega ran a series of ads which instead of showing the games or console capabilities, focused around the phrase “It’s Thinking”.
These ads absolutely failed to re-establish Sega as a big console manufacturer. It certainly failed to also convince players to buy the Dreamcast instead of the next Nintendo or PlayStation. To see a successful attempt at this, one can look at the marketing for the Xbox. Released two years later in the US, the Xbox ad campaign focused on the games and the console. Doing this managed to take significant market share from Nintendo and Sony, and it sold triple the amount of the Dreamcast.
So far, Nintendo appears to be doing a good job with the Switch’s marketing. First of all, the Switch’s reveal trailer garnered a lot of attention.
It strayed away from the Wii branding and showed that the Switch was a brand new device. Finally, the trailer clearly displayed the Switch’s main function in different scenarios. This helped consumers understand and constantly reinforced in their heads what the system does. Nintendo’s marketing has thankfully fixed many mistakes that plagued the Wii U.
Nintendo also took some time on The Tonight Show with Jimmy Fallon to promote the Switch and The Legend of Zelda: Breath of the Wild.
This, in combination with the debut trailer focusing on young adults, showed that Nintendo understood that the casual audience they captured with the Wii is gone. Nintendo’s Switch marketing seems to be focusing on the gamers themselves, and this is an excellent sign.
No Third Parties
Just like both the Saturn and the Wii U, the Dreamcast had very little third party support. Due to disputes between Sega and EA over sports games, the Dreamcast missed out on established sports titles such as Madden.
Similar things happened with many other developers, and the Dreamcast didn’t get the third-party support it needed. This is something the Switch will want to want to fix from the Wii U, although it may not happen.
Third party titles are very important to have. As the Wii U proved, Nintendo’s first party titles are not enough to make a console succeed. So far, things look promising. Upon its unveiling, Nintendo released an image full of developers that have pledged to support the Switch. The list included notable studios like From Software, Bethesda, and Activision. However, the Wii U also received claims of support before its launch. The Wii U received ports of popular 3rd party games, but with lukewarm reactions.
This proved, though, that old games do not sell a new console. Mass Effect 3, Batman: Arkham City, and Call of Duty: Black Ops 2 were not enough to make people buy a Wii U because they could already play those games on other consoles. The Switch has already shown a few third party titles, such as Skyrim and NBA 2K17. Yet like before, these games are already playable on other consoles. People are going to want a console that can play all of the newest games, whether it’s the next Dark Souls, Call of Duty, or Assassin’s Creed. The Switch has to get third party releases as they come out. Old games are not going to cut it.
How is Nintendo going to get new third party games on the Switch? The Wii U failed because it wasn’t powerful enough. The minute developers had access to the PS4 and Xbox One, the Wii U was disregarded since there was no technical parity.
Despite the new “generation 8.5” consoles, nearly all developers are still making games for the standard Xbox One and PS4. So the Switch doesn’t need to be too tremendously powerful. However, if Nintendo wants to secure the third party support that they’re promising, the Switch needs to be on par with the Xbox One.
In 2017, coming out nearly four years later, this shouldn’t be hard to accomplish, not even at a reasonable price. Otherwise, third parties will leave the Switch behind, followed by consumers, and a continued loss of support. The terrible snowball effect the Saturn, Dreamcast and Wii U experienced will happen once again.
Profits (or Lack Thereof)
In order to better compete with the PlayStation, Sega cut the price of the Dreamcast multiple times, to the point where it was being sold at a loss. They then proceeded to lose money for five straight years. Unsurprisingly, after that, Sega was out of the console marketplace for good.
It is impossible for an outsider to objectively say anything about any potential Switch price point. We don’t know what Nintendo’s exact strategies, costs, or profits are, so we can’t for sure say that they shouldn’t sell their console at a certain price. However, it generally is a bad idea to sell your console at a loss.
Once again, that is of course much easier for an outsider to say. Nintendo is aware of common economic principles, probably better than the average gamer. But then again, Sega probably was too, and look at them now. Bottom line: don’t sell your console below your bottom line.
Also, it’s important to note that Sega lost over a billion dollars throughout the Dreamcast’s life cycle. Nintendo, on the other hand, made money during the Wii U’s life cycle. To be fair, these profits were not due to the Wii U specifically, but mostly to other ventures such as the 3DS and Amiibo. However, ventures like these will continue throughout the Switch’s life cycle. If anything they will expand more, such as with mobile games, theme parks and rumors of TV shows and films.
To sum up, it would take a pretty big failure to really hurt Nintendo. Especially considering that they have over $4.6 billion dollars simply in cash and deposits alone as of a recent estimate.
Portability, the Switch’s Saving Grace
Finally, even if the Switch fails to succeed in most or all of the ways above, it is still probably going to be far more successful than the Wii U or Dreamcast ever were. This is because it is not just a console; it’s a hybrid. It’s a successor to both Nintendo’s console and Nintendo’s handheld line – that of the Wii U and 3DS.
Even if the Switch achieves a small amount of success following the Wii U, it will be a hit as the heir to the 3DS. As a combination of the two platforms, it surely will be successful given how Nintendo’s portables have always been since the Gameboy.
Due to this, the Switch has to be a success when compared to the Wii U. But compared to the 3DS? To do that becomes more difficult. Due to its dual nature, the Switch will likely get to a point that many consider fairly successful. However, that doesn’t make it a good business decision, not if it means leaving their incredibly successful handheld line in the dust.
It is generally good to expand, which Nintendo already has done by making a portable line in the first place. Perhaps focusing all their games on one platform will prove very successful. Nintendo will be able to give the Switch more focus than the Wii U without a separate handheld component, so maybe third parties aren’t really necessary after all.
Perhaps the rising popularity of the mobile phone will render dedicated handhelds obsolete, forcing Nintendo to do this now. However, mobile phones rose years ago, and the 3DS has been incredibly successful regardless. Maybe Nintendo will continue the 3DS line along with the Switch, but that would defeat the entire purpose of the system itself. Why would anyone want to play their 3DS when they could be playing their Switch?
What’s important to get across is that it’s likely for the Switch to succeed due to its portability. But what if that’s less than the success to be had across two different platforms?
Nintendo believes that combining their two platforms will bring the success of the handheld to the console. But what if instead, it brings the borderline failure of the console to the handheld, forever diminishing their handheld dominance? It just seems silly to risk something that Nintendo has kept so prominently for over 25 years.
In the event of the Switch’s failure, Nintendo can always go back to the way things were before, but it would be a hard thing to return to. It seems like an unnecessary gamble, putting all their eggs in one basket when they’ve never needed to before. If the Switch were to fail, what would Nintendo fall back on?
Learning From Mistakes
If there’s anything to take from this, it’s that Nintendo has at least three different failed consoles – the Saturn, Dreamcast, and Wii U – to look back on. Nintendo ought to learn from their and Sega’s past mistakes in order to be as successful as possible. Clear marketing is a good first step, which hopefully will continue. Price is another important thing for the Switch to nail; hopefully, it’s not above $300, definitely not past $350.
Nintendo is behind, so if they want developers to make games for their system, they need to make it as easy as possible. To do this, the Switch should definitely be as powerful as the Xbox One. Hitting this mark would make it so much easier to port games to the system, would give the Switch more third party titles, and would help the system tremendously both out of the gate and in the long run. After generations of evidence, it should be clear that for this reason, power matters.
There is the definite possibility that the Switch will not be as powerful as the Xbox One or the PS4. If this happens, that does not mean that it will be a failure. The Switch has a unique element on its side, which is that it combines Nintendo’s console and handheld lines. Whether this is good for Nintendo can be argued for days, but the fact remains that Nintendo handhelds have always seen some measure of success. This truth will not disappear with the Switch, regardless of power. However, for maximum success, it’s important to take lessons from the past and not let history repeat itself.