Pachter: Nintendo NX Success Hinges On Third-Party Support


After Nintendo NX has seemingly been revealed to be a portable, handheld console that has detachable controllers, Wedbush Securities research analyst Michael Pachter has once again stressed that third-parties will be important to the console’s success.

His reasoning is that if NX sells strongly, third-parties will commit to developing for it which will allow it to become “a modest success.” Pachter believes that Nintendo fans will want the chance to play game series such as FIFA, Call of Duty and Grand Theft Auto, and that it will be a far harder sell if the library is only built from first-party software.

But questions remain around whether the console will have parity with PlayStation 4 and Xbox One, as that could limit the chance for third-party publishers to port their games to NX.

“I think Nintendo could pull it off, and I think that the innovation here is we know that the DS was supremely profitable and sold gajillions of units,” the analyst explained in Siftd’s Pachter Factor. “We know that the 3DS is less profitable and selling fewer units, but still millions per year. I think the forecast is now five million for this year, and that’s down from 25 – 30 million that DS did at its peak and down from the 13 million that the 3DS did.

“But this thing isn’t only a handheld theoretically, assuming that these rumours are true. This is a handheld that can be docked and you can play the games on your television. That makes it more of a hybrid, a better way to look at it is an inexpensive console as opposed to a glorified handheld. ”

He continues: “I think that is somewhat appealing. I think if you can play Nintendo first-party IP, and if Nintendo get their releases out on time enough to support this thing, yes, I think it could be successful. Now how do we measure successful?

“Nintendo is a public company, so I think that the right way to look at it is ‘are they making a profit for their shareholders?’ One thing I do like about the company is they don’t sell anything at a loss, so they will price NX such that they can make a profit on each hardware unit.

“If they can sell five million or more units per year, they are going to be profitable on the software as well. They’ll sell plenty of Nintendo first-party, they will probably attract enough third-parties that the NX can be a modest success. The real question is, will the device be powerful enough to support third-party games?

“And by third-party games, I mean can Electronic Arts take FIFA and port over the Xbox One version to NX. If the answer is no and they have to build a ground-up game, they’re probably not going to do it. And that’s what we saw with Wii U.

“If they can, then I think the NX can be very successful because there are a lot of Nintendo fans out there that want to play FIFA, Call of Duty, Grand Theft Auto, but those aren’t available on Wii U. That really made people buy the Wii U only to play Nintendo first-party.

“If the NX has first-party and third-party, I think it can be successful. If there’s first-party only, I do not think it has a chance at succeeding. So, we’ll see.”

This week has brought the rumour that SEGA, Square Enix, Ubisoft, Activision and Warner Bros. Interactive Entertainment are all behind the console, with Pokémon, Mario and The Legend of Zelda: Breath of the Wild to populate the Nintendo NX launch window. Ubisoft has also shared that they have “surprises” in store for Nintendo NX.

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