Wedbush Securities analyst Michael Pachter has once again touched on Nintendo NX, having been asked as to whether it could spell the end of the company’s hardware business if it doesn’t succeed.
Sharing concern that, if parable with PlayStation 4 and Xbox One, it is arriving “very late in the cycle,” he believes that there is still enough opportunity for Nintendo to see success with their new “dedicated game platform.”
“Low potential for NX to be the end of Nintendo in the hardware business,” he replied in Siftd‘s newest Pachter Factor episode.
“I would say modest potential that it bombs. I would give them a 60 percent chance of success, I think they are smart people, I think they have learned a lot from what they did wrong with the Wii U. Are they going to get the Wii magic back? Probably not. But if they go back to a conventional-like console, their only problem they have now is they are very late in the cycle so they’re not going to sell that many. Could they sell 30 million? Sure. They could sell enough to make a difference and make a profit. They’re not getting out of the handheld business until the sales drop to zero – three or four million a year. And that is probably five, seven or eight years out. So no, they’re not going to get out of hardware.”
The question that he was posed had also asked whether another misstep could see Nintendo shift to become a third-party publisher. Pachter remained adamant that won’t happen, although sees that the company will continue to dabble in the mobile market.
“I would say low chance they go third-party, but some. Bringing them to Steam? Never,” he began. “I think the way that they will go third-party is mobile. I think that what you’re going to see is a convergence of mobile and console. So you’re going to see the mobile game experience which right now is very simple, limited by the GPU and CPU in your phone become more and more complicated every iteration of phone.
“I think that Nintendo’s debuting on mobile, because I think they are sticking a toe in the water. They have announced that they will have five games by March 2017, which is not very soon. So, let’s assume that this December’s launch is right at year end, that is one game every three months. So, not a crazy number of games, considering the company has something like 1200 games made in its history or whatever – a lot!
“I think they are testing the water with mobile, I think that as mobile processors get faster, faster and faster, that’s kind of what the NX is going to be – like a convergence device. I think you will see Nintendo games launch on NX, and maybe on mobile later. So, think about the iPhone 10 or 12, you know the 2019 or 2020 iPhone or iPad, and whether it will be as fast as an Xbox One. And it will be. And if that’s the case, then this NX device – which will be as fast as an Xbox One – morphs into a mobile experience and it doesn’t matter what processor you use.”