The Nintendo Switch is a worldwide success, already selling significantly more than the 3DS in just four years. And yet, when watching this year’s many E3 conferences and announcements, third parties tended to focus on PS4, PS5, Xbox One, and Xbox Series, despite Nintendo’s hybrid still topping hardware sales charts in many territories.
The Switch missed out on most of the big third party announcements at E3, and indeed has done for a few months now. Most major games third party games won’t be getting a Switch version, including Lost Judgment, Elden Ring, Tales of Arise, Rainbow Six Extraction, Diablo IV, Tiny Tina’s Wonderlands, Avatar: Frontiers of Pandora, Demon Slayer: Kimetsu no Yaiba – The Hinokami Chronicles, Far Cry 6, Battlefield 2042, King of Fighters XV, GRID Legends, Dead Space Remake, and of course Final Fantasy XVI. I’ve obviously omitted a lot of lower profile releases that are also only coming to PlayStation and/or Xbox platforms there. It’s clear that the Switch is going to progressively fall behind in terms of the amount of major new releases.
The Nintendo E3 Direct did reveal some new third party games, including Super Monkey Ball: Banana Mania, Marvel’s Guardians of the Galaxy, and Life is Strange: True Colors, but just a handful, and outside of those we were only treated to some very late ports (Dragon Ball Z: Kakarot, Danganronpa Decadence, and Life is Strange Remastered Collection). The Switch is still a hot item for consumers, but no so much for major third party publishers, where a clear trend is starting to emerge – that of third parties providing few games for Switch but a fairly consistent number of new high-profile titles for Xbox and PlayStation platforms. It’s a major failure for Nintendo and its third party relations that, even after four years of incredible sales success, the manufacturer is unable to cultivate a diverse and ambitious line-up from them.
While being left behind in terms of AAA games, Nintendo has managed to turn the Switch into a key system for AA Japanese games. We can mention Koei Tecmo here, with Samurai/Dynasty Warriors games being made for Switch despite the company’s somewhat quiet participation in the 3DS market. The Atelier series has also had favorable sales performance on Nintendo’s hybrid, with the Ryza series achieving a shipment total of one million. Persona too has had a Switch entry, in the form of Persona 5 Strikers. And Square Enix has supported the Switch with its Japanese output, most notably with Trials of Mana and Kingdom Hearts: Melody of Memory.
Publishers who are able target family audiences have also achieved record profits thanks to the Switch; the long term success of Tsuri Spirits (a fishing title created by Bandai Namco which has sold over 500,000 units in Japan), Story of Seasons (250,000 sold by Marvelous in March), and Momotaro Dentetsu (an enormous three million copies sold) demonstrate that the Switch offers access to a formidable market – publishers just need to be able to grasp the interests of that particular audience in order to tap into it.
But the core gaming market is a different story even in Japan and, despite the Switch’s solid foothold in its home country, even smaller third parties are beginning to hesitate on this front. Aquaplus is making Utawarerumono Zan 2 for PS4 and PS5 only. Kadokawa, despite releasing numerous Switch titles up until now, has gone PlayStation-only for its newest IP, Relayer. Falcom has been contracting with Nippon Ichi Software for Switch ports, but still won’t jump on the Switch bandwagon for Kuro no Kiseki. The next mainline entry in The Legend of Heroes series will also be PS4-only at launch, following a lengthy period of time when the platform of choice was “undecided”. No single port of Ys or The Legend of Heroes for Switch has managed to sell more than 10,000 units in Japan (less than 10% of the total audience for those titles), which probably explains the decision.
Compile Heart is also an interesting case – initially keen on moving to Switch after profitable but declining Vita years, the company has seen its sales crumble. Not only did its Switch ports sell miserably (for example, Mary Skelter 2 sold 2,000 units at launch, five times less than the PS4 version), but its PlayStation releases have also begun to draw in fewer customers. Neptunia Virtual Stars sold around 14,000 in 2020, while its PlayStation Vita releases usually shipped 40-50,000 during the platform’s peak. Mary Skelter Finale, which was released on Switch and PS4 at the same time, sold a mere 11,000 copies, half of what Mary Skelter Nightmares managed in 2016 on the PlayStation Vita alone. These performances have forced Compile Heart to be a lot more discreet when it comes to Nintendo’s hybrid. Currently, the surprising ninja crossover between Neptunia and Senran Kagura, Senran Ninja Taisen Neptune, is set to be a PS4-only release, and the publisher is now quietly smuggling commercial failures (Dragon Star Valnir, Death End Request 2) onto Switch as digital-only eShop releases.
Another example comes courtesy of the port of God Eater 3 on Switch in 2019 – it sold around 25,000 units, several times less than the PS4 version, and significantly less than God Eater 2 Rage Burst’s almost 350,000 sold by the end of 2015 on PSVita. That probably led Bandai Namco to focus more on home consoles and PC, first with Code Vein and then again more recently with Scarlet Nexus – two highly acclaimed, big budget releases from the Japanese publisher. While I think the Switch will continue to have a steady stream of AA games, Western and Japanese alike, most of them aren’t likely to chart highly on a global level.
As third parties begin to look elsewhere, Nintendo is also losing a number of former exclusives. Fatal Frame Maiden of Black Water is being revived on all consoles, despite being a notorious WiiU exclusive. It’s strange that Koei Tecmo, which has made millions by participating in both the development and publishing of Hyrule Warriors, won’t grant even the smallest exclusive to Nintendo of its own accord. Rune Factory 4, a significant 3DS exclusive when it first released, is now also coming to PS4 and Xbox One. Even Ace Attorney is now releasing on PS4. So at the same time that it’s being left out of many new release announcements, Nintendo is also finding many long-running third party exclusive franchises are diversifying. Surely this should be a cause of concern for Nintendo, which needs to look far ahead beyond the Switch’s short and medium term success.
Of course, the Switch does have third party exclusives, but is time running out on these? One recent major exclusive is Monster Hunter Rise, which has had a strong start (seven million shipped), but the gap between it and the multiplatform Monster Hunter World (17 million shipped, plus an additional 7.7 million for Iceborne) remains large. Isn’t it more likely that Capcom will decide to opt for the larger PlayStation, Xbox, and PC market next time? Another example is Rune Factory 5, which has yet to hit the West. But the upcoming launch of Rune Factory 4 Special on PS4, Xbox One, and PC might be a sign that the fifth entry isn’t going to be a Switch exclusive for very long. Things look better for Shin Megami Tensei V, which looks set to become a worldwide hit, but beyond that there’s only Project Triangle Strategy, an indie-styled tactical-RPG from Square Enix. Will these be enough to withstand the tidal wave of PS5 & Xbox Series blockbusters in 2022?
Of course the truth is that the economic history between Nintendo and third parties hasn’t always been very rosy. When it’s not developing a Mario game, Ubisoft sees just 11% of its total business on Switch, while its traditional target platforms (PlayStation, Xbox, and PC) represent more than 70%. And given that a large chunk of that 11% must be for Just Dance, which is especially popular on the Switch, you can imagine why the French company isn’t closer to Nintendo, despite the successful partnership with the Rabbids IP. According to Nintendo’s own financial results, 20% of software sales come from third party games and 80% from first party titles. For comparison, PlayStation first party games accounted for only 17% of PlayStation software sales over the same period (a period that included The Last of Us Part II and Ghost of Tsushima).
It’s not just Ubisoft, either. Warner’s Mortal Kombat 11 had an estimated market share of just 4.2% on Switch in the UK, and also fell faster than PS4 and Xbox versions in NPD rankings. Bethesda’s Doom Eternal failed to chart in European eShop rankings when it eventually released on the hybrid system, showing little sales potential for shooters amongst Nintendo’s audience. But I think the most striking example is that of The Outer Worlds – when it was ported to Switch in June 2020 it ranked 30th in the combined UK chart, the same week that 51 Worldwide Games took 6th place. In other words, Switch players would rather play chess from Nintendo than pick up an ambitious third party port. There couldn’t be a more negative message for those third parties that are working hard to push the boundaries of gaming experiences and offer them to Switch gamers.
Nintendo has managed to successfully win a new type of audience centered on what I’d call the nostalgic indie market. The indie game market has grown considerably in recent years, and by retaining an element of gaming on the go Nintendo has provided the right tool for those looking to experience more modest software and retro, or retro-inspired, releases. These games tend to be more enjoyable on a smaller screen and are perfect for short play sessions – while travelling or commuting, for example.
In this field there have been a number of Switch sales success stories – Hollow Knight’s sales were significantly boosted by the release of the Switch version, for example, and Kamiko reached an impressive 250,000 units sold before even releasing on other systems. Hades also made a big impression last year, both critically and commercially, selling over one million units on PC and Switch (sales for Switch alone were unspecified). The indie gaming market has reached something like critical mass, appealing to millions of customers. By playing host to them and allowing indie developers to flourish on Switch, Nintendo has built up an asset for the future, but I fear that’s not enough and certainly not an alternative to the third party publishers who can and do produce AAA games.
While it’s not a problem for indie developers, technology is a major obstacle to third party investment in Switch. Unlike Sony and Microsoft, who make hardware decisions while taking into account feedback from a wide range of developers, Nintendo makes hardware for its own needs and based around its own specific strategy. Developers have to make do, and it’s not always simple or easy. Since the Switch’s commercial success prompted many third parties to jump back on-board after years of Wii/WiiU drought, there have been technical issues with several ports, including releases like Cities XL and Ark: Survival Evolved. The framerate in particular sometimes dips below acceptable levels, especially in Deadly Premonition 2, a bug-ridden exclusive that goes as low as Read More