For Nintendo, the past six years have been a lesson in learning from disappointment and rebounding with record-breaking success.
Speaking on stage at the GeekWire Summit on Wednesday, Nintendo of America President Reggie Fils-Aimé talked about how the video game giant went from facing lower-than-expected sales with its Wii U console to creating the Nintendo Switch that flew off store shelves.
The Nintendo Switch debuted last year and is already one of the most successful gaming consoles of all time, with sales nearing 20 million units. The device, which doubles as a handheld and traditional console, helped Nintendo bounce back from its previous console launch, the Wii U, which wasn’t as popular with gamers.
But sometimes failures can lead to success, and that’s what happened for Nintendo.
“We had launched the Wii U, following on the heels of the Wii, which had sold 100 million units globally,” said Fils-Aimé, who joined Nintendo in 2003. “The Wii U did not have that same level of success. But what we heard from consumers is that the proposition of a tablet that they could experience gameplay [with], coupled with the ability to play games on the big screen TV, was really compelling.”
Consumers also wanted a system that could exist not only inside the home, but go with them on the bus or to the park.
The Wii U wasn’t necessarily a “beta test” for the Switch, Fils-Aimé said, but it was essential for what ultimately became the Switch.
“WIthout our experiences on the Wii U, we would not have the Nintendo Switch in terms of what we learned and importantly what we heard from our consumers,” he said. “They were telling us, ‘I want to play with this tablet, this gamepad for the Wii U, but as soon as I get more than 30 feet away it disconnects.’ So the core concept, something that you could take with you anywhere anytime, was really compelling.”
Michael Pachter, a research analyst for Wedbush Securities, said Nintendo launched the Wii U too late and with limited software support.
“The device was complicated and awkward, and it didn’t resonate with consumers,” he said in an email. “They then launched the Switch (also very late), but since it is essentially a handheld, it was familiar to anyone who grew up with a GameBoy device, and it had a ton of first and third party software support.”
Asked about leadership tactics he used while guiding Nintendo through the Wii U letdown, Fils-Aimé said reinvention is “in our DNA.”
“We reinvent ourselves every five, ten years,” he said. “We have to, in this fast-moving entertainment business.”
Having a balanced perspective on success and failure is also key, Fils-Aimé said, echoing a Nintendo philosophy about staying even-keeled.
“When you’re doing well, don’t be excited about that high-flying performance,” Fils-Aimé said. “When you’re doing poorly, don’t be sad. Always have an even keel and always focus on the next big adventure. And that’s what we do.”
The success of the Switch has been a boon for Nintendo’s bottom line. The company posted net sales for its most recent quarter of $1.51 billion, a 9 percent increase from the year before, and operating profits of $275 million, up 88 percent over last year.
Nintendo last month launched Switch Online, a new Nintendo Switch service for online play.
“Nintendo isn’t going anywhere,” Pachter said. “They’re consistently profitable and have a large cash cushion, so I think they’ll be around for another 100 years.”