To Switch, or not to "Switch."

Let's start out with a little history lesson.

Have you ever heard of the 'Osborne Effect?' According to Wikipedia.....

"The Osborne effect is a social phenomenon of customers canceling or deferring orders for the current, soon-to-be-obsolete product as an unexpected drawback of a company's announcing a future product prematurely."

This occurred back in 1983. The Osborne Computer Corporation had released their "portable" computer called the Osborne 1 in 1981. In 1983, Adam Osborne announced that there were next-gen Osborne PCs in development titled the 'Executive' and 'Vixen' respectively. It is believed that this announcement severely-undercut profits of the Osborne 1 and caused it's eventual demise. People were more interested in the newer-versions so they didn't bother with the current-version. Ever since then it has been a widely-accepted and practiced strategy not to tip the hand of products in development before you have already reached the point of diminishing-returns and surplus profit of the current product. This is why you usually do not "officially" hear anything about next-gen video game consoles until a year or so before launch. That brings us to today. It has been reported in a Bloomberg article that several developers have been issued 4K-capable development-kits by Nintendo for an unnamed-console in development. Now, this rumor is not new. I've heard this for a few years now, but recently I received information from a trusted-source that not only is this the case, but a very prominent video-game developer is working on bringing a game known for it's high graphical-fidelity and online-necessary features to an unnamed Nintendo console. A game that would NOT run or function on the Nintendo Switch. This is Nintendo's response to that. "A news report on Sept. 30, 2021 (JST) falsely claims that Nintendo is supplying tools to drive game development for a Nintendo Switch with 4K support. To ensure correct understanding among our investors and customers, we want to clarify that this report is not true. We also want to restate that, as we announced in July, we have no plans for any new model other than Nintendo Switch — OLED Model, which will launch on October 8, 2021." I want you to pay close attention to the things I highlighted and underlined. ~ Nintendo Switch with 4K support.

~ To ensure correct understanding among our investors and customers.

~ Not true

~ New model

These are very important facts in this statement that are being widely ignored by journalists, wannabe journalists, and fans because they don't match up to their chosen narrative which is a 4K "Switch Pro" which has basically become and idol at this point. No many how many times they are shown it's not coming. No matter how impractical it is. No matter how little evidence there is to support it, they refuse to let it go. That is the literally definition of idolatry. Now, let me be clear by saying that is NOT impossible that Nintendo could still do this, but it is highly-improbable for several-reasons.

1. Nintendo is cheap and greedy - We all know how greedy this company is. They charge you full-price for games that are decades-old on antiquated-hardware, with a less than desirable online-experience. There already is a "Switch Pro" on the horizon. It's called the Steam Deck. All of the features Nintendo fans say that they wanted for a Switch Pro are there for the Steam Deck. Heck, if you install Windows on the Steam Deck, you can even play emulated Nintendo Switch games on the Steam Deck if you are into that kind of thing. Now, this comes at a price. A hefty-one. As Valve CEO Gabe Newell stated.... “I want to pick this up and say, oh, it all works,” Newell said. “It’s all fast. It’s all… and then price point was secondary and painful. But, that was pretty clearly a critical aspect to it. But the first thing was the performance and the experience, [that] was the biggest and most fundamental constraint that was driving this.” Credit: Slash Gear The Steam Deck specs are as follows...

Processor -

AMD APU CPU: Zen 2 4c/8t, 2.4-3.5GHz (up to 448 GFlops FP32) GPU: 8 RDNA 2 CUs, 1.0-1.6GHz (up to 1.6 TFlops FP32) APU power: 4-15W RAM - 16 GB LPDDR5 on-board RAM (5500 MT/s quad 32-bit channels)

Storage -

$399 - 64 GB eMMC (PCIe Gen 2 x1) $529 - 256 GB NVMe SSD (PCIe Gen 3 x4) $649 - 512 GB high-speed NVMe SSD (PCIe Gen 3 x4) This device certainly is more powerful than the Nintendo Switch, but not leaps and bounds more powerful, and yet, the CEO of Valve is telling you that the pricing was "aggressive" and "painful." That suggests that at the very best-case scenario the console could break even, but more likely well sell at a loss. A BIG one, but this is Valve. They can EASILY cover that loss in software sales which I'm sure played a decision in the aggressive-pricing. It was made clear by Newell that he prioritized the experience for the consumer over the pricing of the device and let's be honest here. Nintendo OWNS the portable-gaming space and has literally from day one. It would be a colossal waste of time for Valve to enter this ring with anything less than aggressive pricing. Nintendo however doesn't sell consoles for a loss. That is not in their DNA. They absolutely refuse to do that. They certainly can afford to, but they won't. Now if the lowest-tier of the Steam Deck sells for $399 (at a loss) and the OLED Switch sells for $349, how much would you expect a Switch Pro to cost? We know that the regular Nintendo Switch sells at a profit. It was suggested (again by Bloomberg) that the OLED Switch would only cost Nintendo an extra $10 to manufacture thus increasing their profit-margin. Nintendo jumped right out in front of that with their own statement which was almost a carbon-copy of the statement that I posted above. "A news report on July 15, 2021(JST) claimed that the profit margin of the Nintendo Switch (OLED Model) would increase compared to the Nintendo Switch. To ensure correct understanding among our investors and customers, we want to make clear that the claim is incorrect. We also want to clarify that we just announced that Nintendo Switch (OLED Model) will launch in October, 2021, and have no plans for launching any other model at this time." Now again, pay attention to the wording here. They said that the report of the profit margin increasing from the regular Switch to the OLED model was "incorrect." They never said that the OLED model would not make a profit. I'm pretty sure that the regular Switch sells at a decent-profit these days as the hardware is at least 7 years old. My guess is that the OLED Switch profit-margin is the same as the regular Nintendo Switch profit margin was when it released back in 2017 and thus Nintendo can truthfully say that the OLED Switch itself is not increasing their profit margin. However, it is entirely plausible that the increased profit margin is on the regular Nintendo Switch and Switch Lite which are still selling well and at this point cost far less to produce. Nintendo has mastered the art of plausible-deniability.

Even if the specs were less than the Steam Deck, in order for Nintendo to make a profit (based on their claims of profit margins and justification of the $349 price-tag on the OLED Switch,) you are looking at bare-minimum $450-500 (based on how THEY scale console-pricing,) for another "less-than" console that is not as powerful as the Steam Deck, and still woefully behind Sony and Microsoft. Also, how does this help you when Sony and Microsoft come out with their mid-gen refreshes? Now the gap is even bigger, AGAIN. If they choose to go bigger than Valve (which is highly-unlikely,) the loss would be unsustainable without some type of killer-app in the same vein as Wii Sports that had the ability to cater to all demographics. 2. Lying to investors is illegal - Now, I don't know how the laws work in Japan, but in the USA, Securities Fraud is a Class C Felony punishable of 20 years in prison. Whether you are trying to conceal a product in development or not, you cannot tell bald-faced lies in the media addressing your investors directly......

"To ensure correct understanding among our investors and customers....."

.....whatever it is that you are working on, you are using their money to do it and you are legally obligated to inform them of developments of any products or services.

Furthermore, it is out of character for Nintendo to make such bold statements like this unless they meant it. If they truly were hiding something, there are more logical, effective, and surreptitious-ways to throw people off your scent than this that won't get you into trouble. If Nintendo is emphatically telling you that they are NOT working on a 4K Switch, TWICE, that means that they are not working on a 4K Switch........

.......let that sink in please. If they are working on a 4K Switch, then they are going to be in serious trouble because of these statements from back in July and in October where they said clear as a bell they are NOT working on a 4K Switch or any more Nintendo Switch models. The OLED Switch is the swan-song for the Switch brand. The thing that I find very amusing and tragic at the same time is that whether it's fans, journalists, vloggers, bloggers, etc, no one wants to even suggest that Nintendo could be working on something ELSE. At this point I feel like a lot of people are just stubborn or trying to stroke their own egos. Their pride won't let them see anything other than what they want to see. Nintendo never told you that they are not working on new hardware. They don't need to tell you this because it is known that every company starts working on the next-iteration of their product right after launch of the current one, or sometimes even before with a separate-team. So we know Nintendo has been working on their next device just and Sony and Microsoft are working on theirs.

Why is it so hard to believe that Nintendo is not working on a new 4K console? Why does it have to be another Nintendo Switch or have Switch capabilities? Where is it written that it "must" be a Switch or it just can't be? Haven't we been here before?? Anyone ever hear of the Wii U??? Nintendo tried to double-dip with the runaway-success of the Wii by using that same branding for their next-gen console and that mistake started a cascade of failure leading to the most abysmal performance by a home console in Nintendo's history. Even if some measure of portability is retained, I think the "Switch" branding will not be. Whatever Nintendo is working on will be something else entirely and whatever that is will be the focus of the branding. The Switch, Wii, Wii U, N64, GameCube, DS, 3DS were all names based on what their basic-functions were. I don't think what Nintendo is working on will be a conventional-console. It's going to be another gimmick of some type because that's who they are. If I had to venture a guess, it would be some type of device that works as a stand-alone device where you can download games digitally and play 4K-level games or stream games through the cloud. You can also take the Switch you already own, dock it to this device, and play Switch games you already own up-scaled to 4K with Ray Tracing. Remember. Nintendo has a partnership with nVidia and they are on the cutting-edge in terms of Ray Tracing. This is just a glimpse of what current Nintendo Switch games look like with 4K and Ray Tracing.

To add to that, we know that nVidia has it's own online-infrastructure. Obviously it isn't on the level of Microsoft or Apple, but it's there and it's used for GeForce Now. Not only can Nintendo leverage their relationship with nVidia for hardware, but for the cloud as well. The bottom line is that Nintendo is working on a new device. They say it's not a Switch. I say it's not a Switch. Why? It's because they don't need a new one. If Nintendo is about to do what I think they are about to do, if you own a Nintendo Switch right now, you already own the "Switch Pro."

7 views0 comments

Recent Posts

See All

In 2009 I had a serious accident at work. I fell off of a ladder which was about 15 feet off the ground. I remember that day because it was an easy day. I only had 4 jobs to do. It was not raining