E3 2017 Nintendo – The Longest 25 Minutes

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The Nintendo defense force has faith. Despite a tiny launch line-up and a cloudy future, Switch entered the gaming market with a bang. Stocks issues keep being recorded in all continents, the situation being extremely serious in Japan where costumers have to earn the right to purchase via lotteries organized in stores. As the demand seems to be never ending, observers wonder if we might be witnessing a Wii-like phenomenon.

Before entering the (dramatically important) analysis of Switch’s debut, let’s have an overview of the firm’s yearly financials. Here, we must stress that despite the 2.74m Switch shipments, the fastest-selling Pokemon game ever and the greatest Zelda of all time”, revenues still go down 3%. Operating result melted 10% in the wake of new expenditures. The net result, however, skyrockets by 521% and this is where it gets interesting. Those profits comes from 3 items : minority interests bring 20 billion yens (Pokemon GO dividends, no doubt), the exchange market was 13 billion more favorable compared to 2016, and the company earned no less than 60 billions by selling securities. By doing the maths, you realize that video games actually don’t make more profits than last year. Those artificial profits hides the truth, which is that the business is flat due to the fact that Switch cannot compensate WiiU’s rapid collapse. On the next fiscal term, 3DS shipments should go down, increasing the pressure on the new system.

The big question is : who’s buying Switch ? Who are those who frantically throw themselves on the first Switch in sight ? With 2.76 millions copies sold, Zelda Breath of the Wild has over 100% attach rate. Mario Kart 8 DX also has a high percentage, with half of Switch owners getting it at launch. 1,2 Switch is stalling, and many ports achieve mediocre sales. My interpretation is that Nintendo fans become increasingly radical : they want more Nintendo, as soon as they can grab the stuff. True, some core gamers at large join them in the Switch install base, the offer being a lot more attractive than WiiU in its time. But data is lacking to give solid conclusions. August 31st will be key in ascertaining Switch’s attractiveness as Nights of Azure 2 hit PS4, PSVita and Switch at the same time. FIFA Switch eventually came to be FIFA18 but will come in a weaker version, lacking Forstbite engine and story mode. The only question will be whether Nintendo fans quit playing Splatoon 2 to embrace EA’s football.

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Let’s stress that those will be the only occasions in which Switch and PS4 will directly face each other : despite the stupefying sales pace, 3rd parties around the world do not care about the hybrid system. NIS America may have shipped 100K units of Disgaea 5 Complete, NIS Japan disregards that and is making all its next games for PS4, PSVita and PC. Not even a little port for Switch ! Very surprising given the business opportunities that were proven by Disgaea 5 Complete’s good reception. BandaiNamco, who’s regularly provided Dragon Ball Z games for 3DS, and who’s porting Xenoverse 2 on Switch, ditches Nintendo’s new system in the case of Dragon Ball Fighter Z, one of the best games of E3. Code Vein, Namco’s brand new post-apocalyptic action IP, is skipping Switch too. The last direct that had revealed Nights of Azure 2, Fate Extella and Senran Kagura for Switch shook the web. But after this E3, we can conclude that Nintendo merely reactivated old alliances, KoeiTecmo and Marvelous obeying the Big N every time a fat check comes from Kyoto. In Japan, the balance of powers has yet to turn in Nintendo’s favor.

In the West, no one will be surprised in seeing large publishers shunning the Switch. Bungie was recently saying that Destiny 2 on Switch would be “unrealistic” because the idea behind the Switch doesn’t fit with always online. Bethesda is not doing more than the Skyrim super late port, and is almost being cynical in the way it keeps all its new games for PS4 and XboxOne. Despite outsourcing the development of Mario + Rabbids, Ubisoft has no big game to give in exchange of borrowing the Mario franchise : Switch ends up having the usual Just Dance, and Starlink Battle for Atlas, a shoot’em up based on toy models. One after the others, AAA titles shine at E3, and for none of them Switch gets the spotlight. In the mid/long term, Switch can only choke form the lack of AAA, not even having AA titles to resist. In fact, the situation hasn’t really changed compared to January 13th : Nintendo is trying to find its way alone and the line-up is as weak as before… As I said last year, the “perfect Zelda” achieved nothing in the console war.

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Nintendo intends to ship 10m Switch by next March, but that would merely make it reach WiiU’s final figure. Once every Nintendo fan has the system (adding some core gamers interested in some Nintendo IPs), how will Switch extend its influence without any of the big names that dominate today’s gaming market ? After this E3, Switch welcome a mere 10% of upcoming titles and no 3rd party developer came up with something new in the tiny Direct of just 25 minutes. And on the 1st party side, nothing big enough to threaten Sony’s and Microsoft’s market share. True, we got a glimpse of the ever returning Yoshi and Kirby, but no doubt they’re quicly developed low end games aimed at luring the masses. Xenoblade 2 received a new, improved design by jumping on the bouncy harem RPG bandwagon and Fire Emblem Warriors seems to have quite an effective casting. But those two seem isolated, not mention that their release window is still vague. To Call of Duty WWII and Far Cry 5, Nintendo hasn’t got more than a simple Metroid Prime 4 logo to oppose. The competition must be stricken with fear… Only Mario Aliasing Odyssey got a definite release date, which leaves room for many delays. In the current state of affairs, the Switch is trying to conquer the world with an army of late ports, a flurry of indies and a 500-yen Senran Kagura application. Not sure it’s gonna be enough…

By the way and if Sony and Nintendo both achieve their objectives, Switch would be largely dominated by PS4 in its first full year, Sony expecting no less than 18 million PS4. The gap would only grow whatever the reason (no enough supply or loss of interest). That said, there is no doubt that Switch will eventually sell several times more than WiiU. It’s the most powerful handheld on the market, which gives it a potential market of at least 25 million costumers in Japan alone. Even without 3rd parties to support it, the mainstream public (who still buys 3DS) should guarantee continuous sales. It will also get a main Pokemon game and a main Fire Emblem strategy-RPG, so that’s millions more clients in the bag. And with no successor for PSVita, many Japanese developers may need Switch to tap the handheld market. This is the major subject of the next few years : will Japanese 3rd parties make sufficent profit on PS4 alone ? Will their technological level improve to the point Switch ports would become impossible ? Monster Hunter World and Code Vein already signify their PS4pro/XboxOneX optimization : even before releasing, Switch was out of the league. If that becomes a general trend, then the current divide of the Japanese market will continue : older core gamers playing on PS4 in cold war with a mainstream majority focused on casual experience. At best, Nintendo can aim at peaceful coexistence with Sony, both system being complementary and a decent number of gamers playing on both.

As suprising as it may seem after 3 months of massive success of its new console, Nintendo is still a tiny player on the world stage. Not a single publisher has faith in Switch even though it’s flying off shelves, and the manufacturer itself isn’t strong enough to match ambitious and innovative rivals. This E3 is further proof that Nintendo is leagues behind and isolated from everyone.

A Marvelous con

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Switch is getting traction. Ignored until now, Nintendo’s new system arouse interest among indies and japanese publishers. Gust’s key AA game Nights of Azure 2 will be getting a Switch version at the same time as PS4 and PSVita version. It’s fine : it’s only normal that japanese companies would seek to reach a new audience to offset Vita’s unavoidable decline. It is not ok, however, to take opportunistic behavior and turn your back on your fans, like Marvelous is doing.

The Japanese corporation is proud to announce that Fate Extella is coming to Switch this summer, with all the previous DLC included. The game came out for PSVita and PS4 just 3 months ago. Day-one buyers on Sony systems find this outrageous : why would they still be charged large sums (it’s 2€ per costume) while Switchers, who have yet to prove that they’ll support Marvelous’s business, will receive the whole stuff for free? Sony fans are on edge, they’ve recently made Senran Kagura Estival Versus a significant success with some 320K sold worldwide, only to be treated like dirt. Even after that unfair treatment of customers has been made public, Marvelous keeps prompting Playstation players to open their wallets for their overpriced DLC. Anybody would choke at such shameless commercial practices. Marvelous points out that both Vita and PS4 had exclusives costumes, but the Switch version actually has a better costume and it comes on disc whereas the Playstation-exclusive costumes were preorder items, so every Switcher will get it. The great mocking continues.

At this point, you might wonder whether Marvelous has just gotten hostile to Playstation. But notice one thing : US and European have been including the DLC in the Steam late ports until Nitro+ Blasters. But recently with Senran Kagura Estival Versus, they’ve started charging you for additional content just like PS players. This has been reconfirmed with Valkyrie Drive today, while Switch owners still receive the largesse. Let me rephrase it for you. If you play on a Playstation system or on PC, you are SECOND-RATE costumers to them. Glorious PC players, if by any chance Fate Extella ends up coming to Steam without the DLC, I expect you to RIOT until those vultures give you the equal treatment you deserve. At some point, we must express our anger to be played second fiddle despite our long commitment to share our love for their content. I don’t say that you should boycott Senran Kagura Peach Beach Splash because it’s a fine game and producer Takaki has been fair to its audience since Estival Versus. But don’t buy the DLC or buy less of it, that should hit their profitability hard (DLC gives by far the highest margin). I didn’t buy the Super Sonico DLC and I wouldn’t have bought the whole DOAX3 DLC if I had known the publisher would back-stab me like this.

In doing unfair practices and denying equal treatment for all their customers, Marvelous reopens the era of rotten game business and illegitimate favoritism. Such wrongdoers must be hit with the mightiest strength, otherwise another console war will break out, undermining the gaming community again.

Sony, the total supremacy

 

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It’s over. Nintendo bought as much time as it could. The entire gaming world had hold its breath for months, but now everybody has shown his hand. The situation is clear, there is no doubt on the current status of the gaming market : Sony has achieved crushing dominance over its rivals. Nintendo Switch is weak, its line-up even more so and its so-called partners are doing nothing but lip-service. How did we get to that, and where are we going?

To find some answers, let’s first have a look to Famitsu’s top 100 chart, published in a recent issue. How can Switch seem so feeble when top ten rankings show Nintendo owning Japan? It’s very trivial : developers and publishers, unlike journalists don’t simply look at top ten. So let’s borrow their point of view and observe the top 50 (49 actually because of the title line) of combined SKUs. As usual, the sources are GAF, Vgchartz’s digital sales thread and Dengeki’s weekly rankings.

The first thing to notice besides the (deserved) domination of the superb Pokemon Sun&Moon, is that Sony now has a majority of games here : 29 PSV/PS3/PS4 games against 20 on 3DS/WiiU. If you look in detail, you’ll also notice that 9 out of 20 games on Nintendo systems are from Nintendo itself, whereas there’s only one first party game (Uncharted 4) in the Playstation best-sellers. Third parties have therefore a lot more business opportunities on PSVita or PS4 (knowing that PS3 is almost phased out). Another parameter of growing importance : the digital purchase rate is quite higher on Playstation platforms, around 10% (22% for The Division!). Digital reduces variable costs and improves the margin. Publishers love that.

Japanese publishers came to be wary of the 3DS/WiiU audience, hungry for kiddy games which is rarely what 3rd party developers want to do. A major part of the 3DS/WiiU best-sellers is aimed at children (but also at adults in the case of Pokemon) so Japanese 3rd parties naturally prefer addressing and older and more core audience, and that audience plays on Playstation. Best proof of that is Level-5 : hugely successful on 3DS with Yôkai Watch, the company didn’t go as far as announcing Ni no Kuni Revenant Kingdom for Nintendo Switch. As a side-note, observe that both Dragon Quest Heroes II and Dragon Quest Builders sold more than Dragon Quest Monster Joker 3 : Nintendo consoles are no longer the home of SquareEnix’s famous series.

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So what happened on 1/13? Everyone was hoping/expecting Nintendo to turn the tides with a flurry of powerful exclusives. That failed to happen, and it’s the direct consequence of what we’ve seen above. Big games are still pretty far away : Xenoblade 2 (splendid character design this time around) gets a vague 2017 and Fire Emblem Warriors looks like development has barely started (EDIT : it’s confirmed for fall, so things are looking up slightly). The launch line-up is downright ridiculous : besides Zelda Breath of the Wild and 1 2 Switch, some party game looking like the despicable Wii Sports, all games are ports from PS4. Nintendo has lost the initiative, they’re completely out of the race.

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The third party part of the conference is ice cold. Atlus quickly mentions a new Shin Megami Tensei project for Switch, but also confirms a 3DS one, just in case… As a consequence, the exciting Project ReFantasy must be for PS4. Many wondered what Nippon Ichi Software (whose clients have been Playstation players for years of not decades) could do on Switch, and the publisher answered by saying they were providing «serious» support. It so happens that the only thing NIS has in store for Switch is a Disgaea 5 port, that is to say their biggest commercial failure. Switch is not getting NIS’s brand new games The Witch and the 100 Knights 2 (PS4) or Exile Election(‘PS4/PSVita). Far from being serious in its support, NIS actually seriously makes a fool of Nintendo.

SquareEnix has more in the works. Dragon Quest XI for Switch is briefly talked about, and Dragon Quest Heroes I&II are confirmed as launch games. Then comes Octopath Traveler, a 2D JRPG very much like Grand Kingdom and made by the developer of Bravely Default (which confirms the latter as deceased). However, nowhere in the Famitsu article it is mentioned to be exclusive. A PS4 or PSVita port could come quickly. No other JRPG is scheduled for Switch, and that won’t come as a surprise if you look at the chart. In the top 50, major 3DS JRPGs (Shin Megami Tensei IV Final, Etrian Odyssey) are flattened by numerous competitors on Playstation platforms, including the disappointing Star Ocean 5 and the discreet World of Final Fantasy. The big names of JRPGs sell better on Playstation and 2016 showed that again : Persona 5 beats the series’ record and Tales of Berseria is more or less flat compared to Tales of Zestiria.

But the most embarrassing moment is when Toshihiro Nagoshi comes on stage. The director of Yakuza games faces the public, speaks a couple of gentle words on Switch and, probably too busy counting the hefty profits made from Yakuza 6 in Asia, goes back without any confirmation he’s working on Switch at all. Suda 51, columnist extraordinaire at Dengeki, doesn’t really ease the worries : Let it Die’s creator shows a random artwork of No More Heroes while speaking some strange monologue. All this sets the eerie impression that nothing is ready, that maybe nothing is really decided for Switch. Capcom, Nintendo’s most faithful ally, is a no-show. What happens to Monster Hunter 5 and Great Ace Attorney 2? Will Switch even get them? KoeiTecmo, besides working closely with Nintendo on Fire Emblem Warriors, has Nobunaga’s Ambition Power up kit and Romance of the 3 Kingdoms Power up kit (it weakest software) for Switch. Games like Ni-Ô, Dynasty Warriors 9, Blue Reflection, Musô Stars and Nights of Azure 2 stay as Playstation exclusives. Skittish Japanese publishers are actually avoiding Nintendo as much as possible, and it’s a complete disaster for Switch : as it is now, it wouldn’t even take one customer from Vita.

The West is the biggest question mark and a huge stake for Switch. Bethesda confirms Skyrim Switch, but the game is far from ready despite being out for PS4 and XboxOne. Comes Electronic Arts, whose representative looked like at a burial : FIFA Switch is announced, but we won’t see anything of it. Despite its continuous praise for Switch, Ubisoft is not at the event Still, it has some oldies to port on Switch : Rayman Legends (remember, that WiiU exclusive), Just Dance and Steep. Pathetic is the word, Nintendo’s new system is going to be smashed into pieces on Western markets.

Nintendo mentions more than 80 titles in development for Switch, BandaiNamco promised a Tales of at some point… Sure. Crysis 3, Ghost Recon Online and Alien Colonial Marines were to be released on WiiU too. Such titles had seen their development stopped the second their publishers realized the audience didn’t fit. At least this time, Ubisoft doesn’t go as far as announcing Ghost Recon Wildlands for Switch : history shows that it would have little success on that platform, provided it could run on it. You also have to consider the issue of a new console that is coming right in the middle of a generation, which had never happened before. How should developers react? They’re already working on install bases of dozens of millions systems where the business is flourishing. Why would they make extra effort, let alone exclusives for an underpowered system that has zero install base? From a third party point of view, it’s just money thrown by the window.

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Switch’s other problem is itself. The open world (although we’re not sure of that yet) in Super Mario Odyssey is ugly and full of aliasing. It looks terrible compared to Watchdogs, a nearly three-year old PS4 game, and it so happens that precise tech specs have not been made public. Surely are they as bad as the leak published by Digital Foundry. We can now be certain that the most ambitious PS4 games cannot be be ported on Switch : forget Battlefield, Read Dead Redemption or Mass Effect Andromeda. The share button exists, but the official site already tells us that some games will block the feature. Anyone who’s tried to save a screenshot in Pokemon Sun&Moon knows how much you can trust Nintendo on that subject. The manufacturer also indicates that game «generally» won’t be region-locked. I translate that by « some games will be region-locked and you won’t be able to play them on your EU system ». So in fact region free doesn’t really exist and all this looks like a mere PR stunt. The most striking point is the total lack of trophies : why would today’s gamers even want to play their games without a centralized achievement system?

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But Nintendo might actually be targeting another audience with Switch. The conference, for most part, was focusing on Switch’s biggest innovation : playing without screen. Switch players will be invited to face each other in party games in which the screen is accessory. Table tennis, Rock/Paper/Scissors game, boxing… Switch aims at local communities rather than at solo players. In the same way, Splatoon players will be able to gather anytime, anywhere to face each other in multiplayer. In other words, Nintendo is asking casual gamers to open their wallets again to avoid facing Sony directly. Future will tell if this audience embraces the concept and if it’s large enough to make a difference. Nintendo still believes in the miraculous game/idea that sells loads of system, but nothing proves that can still happen. Rare exceptions aside, whole librairies of games sell systems, and nothing else.

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What about Microsoft then? The American recently made the brilliant decision to cancel its most hyped exclusive. From that, it’s clear that Redmond’s firm lost its will to fight : they timidly recommend Sea of Thieves and Halo Wars 2 in replacement. At best Microsoft can cling to the second place and do business in Sony’s shadow.

Miracles exist, but Nintendo Switch will need a really big one to avoid critical failure after that poor reveal conference. Sony has now more than 50 exclusives and welcomes all the commercially huge multiplatform games that Switch won’t have. Sony succeeded in taking market shares while building a win-win situation with 3rd parties, something that Nintendo is unable to do. The Kyoto-based company hence ends up totally isolated and powerless to compete. The concept of an hybrid system is really attractive, Xenoblade 2 looks awesome but Switch won’t achieve much without a strong library of games. And as a matter of fact, Nintendo has no real ally at the moment. As it is, it can just satisfy Nintendo loyalists and casual gamers not yet addicted to Super Mario Run. What is at stake for the Big N now is whether it can keep its “big” for long or if it become a regular publisher, light years behind a leader even more hegemonic than in the PS2 era.

Nintendo Switch, the impossible trade-off

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Let’s say it again, Nintendo is going through a key period in its history. WiiU has died as the biggest failure of the company and 3DS is welcoming less and less games. 3rd parties abandon ship and those still aboard are slowly drowning in vast quantities of unsold 3DS games, the public being increasingly less dedicated. Eyes are thus now focused on Nintendo Switch, the Big N’s new and revolutionary concept. Having a home console and a handheld in the same piece of hardware indeed seems to be a major trump card. The whole world is holding its breath as January 13th approaches.

In this rather tense atmosphere, people jump even at the slightest piece of rumor. So when Eurogamer quotes the hardware specialists of Digital Foundry, internet forums begin to shake. Eurogamer’s article is not at the rumor level : figures are extremely precise and the analysis quite relevant, Digital Foundry’s video as guarantee. Those people are ultra-famous among hardware circles and they can’t afford to provide information out of thin air. The bad news for Nintendo loyalists is that the first tidbits aren’t exactly delightful.

Switch’s CPU lets people down. When the rumor of a Tegra chip surfaced some months ago, many were hoping that Tegra X2, well above the now mediocre X1, would be the objective given the 2017 launch. Nothing of the sort, Eurogamer confirming that the architecture is inspired by Tegra X1, the CPU being a ARM Cortex A57 running at 1GHz, whereas PS4 is around 1,6GHz and XboxOne 1,75GHz. A bit below then, but not a major flow.

It’s the GPU that will be the bottleneck factor, because of the hybrid stance of the machine. Switch’s GPU runs at 768MHz, quite lower than Nvidia Shield TV which runs PS3 games with mixed success, when docked. The GPU is thus a nerved version of the X1, which doesn’t make us optimistic about how the games will look like. And with only 256 shaders compared to 1152 in the case of PS4, overall graphical performance fails to reach 400 Gflops, while PS4 pulls out 1,8 Tflops. Definitely not in the same league as PS4, let alone PS4 Pro. But the big problem occurs when you leave home, Nintendo being driven to painful trade-off in order to keep decent battery life and prevent heating. The Switch undocked, GPU clock speed is halved to 307MHz, that is to say a mere 157 Gflops. The very concept of hybrid is risky and here’s the snag : how will developers deal with a GPU that runs at different speed depending on the situation? Will they embrace the full capabilities, even at the risk of seeing framerate collapse when the tablet leaves the dock, or will they just play it safe and lower their ambitions? This looks like to be a much more serious problem than the use of the Gamepad. Even assuming it can work like a PS4 Pro patch like Eurogamer seems to suggest, how can that work out? The game would have to un-patch itself every time the console leaves the dock…

Raw memory bandwith definitely won’t help : with 25GB/s to read 4GB of RAM, Nintendo Switch is light years behind PS4 which reads is 8GB of GDDR5 (the finest RAM available) at 176GB/s. Safe to say at this stage that you’re probably not going to see high-end games like Battlefield 1 on Switch. EA’s blockbuster wouldn’t even fit in any of the standard game cartridges for Switch… As for PS4 first party masterpieces like Uncharted 4 or The Last of Us Part Two, such level of quality is unthinkable on Switch as it is now. The open world of Zelda Breath of the Wild look dumb next to Final Fantasy XV, which doesn’t even have its PS4 Pro patch yet. When we talk about a home console experience to bring everywhere with you, it’s certainly not the quality and ambition we know on PS4, to which players around the world have become used to. On GAF and pretty much everywhere else, gamers are crestfallen.

Actually, it’s the philosophy behind the architecture of the Switch that should interrogate us. If Sony has made the PS4 Pro and if Microsoft is so keen on building an even more capable Scorpio, it’s because developers are eager for more power, not less. Developers want to push back the limits, to go even deeper in their art so as to leave a trace in the history of gaming. Do you imagine them wasting their time downscaling their formidable 3D engines for the small bunch of folks who will actually bother quiting his beloved Zelda or Mario?

People might be raising eyebrows at the tiny 32GB hard disk, disk space is heavy and costly. Larger space would hurt the handheld side of the device and its launch price. It’s probably not even important, since most of the data will be on cartridges with no need to install internally. Let’s not forget that you’ll likely be able to add cheap and hefty SD cards if you need more space. Nothing to fuss about, then.

Given the weak specs, many observers are now calling for a 199€ pricepoint. Let’s stop right here. New3DS XL currently retails for 179€, so there is absolutely zero chance that Switch, being a whole new concept and better tech, would cost only 20€ more! 299€ is definitely what you can expect on shelves next March, or maybe 249€ if you’re really lucky and if 3DS family gets a cut at the same time. Still, the problem remains that PS4 now trades for 259€.

Switch therefore takes the risk of being an awkward compromise meeting no sufficient demand : it’s not powerful enough for core gamers who might not find the AAA games they like (or not at the same quality level) and it might be too expensive for the mainstream public now fed by Super Mario Run and lured by much cheaper 3DS which still gets support. The only thing that could make the difference is handheld capability, because it’s surely gonna be a very good one. But here again, the potential market is unsure. PSVita failed to achieve market penetration in the West for a reason : people there don’t feel the need to play during travel, and there’s no reason that this would magically change when Switch hits stores.

Nintendo’s next system would then only have one kind of audience left : veteran gamers still seduced by handheld gaming, that is to say PSVita owners and Nintendo’s core audience. To few clients to drive Switch to success, all the more troublesome that it has to sell twice more since it’s one system for two types of offer. The alarm raised by Digital Foundry means serious worries for Switch’s future. We’ll see on 1/13 if the actual situation is better, or if it’s red alert status in Kyoto.