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Nintendo’s balancing act on NX pricing could see it ‘dead in the water’ at launch

It goes without saying that Nintendo has a long trek back to respectability on the console front. As good a console as the Wii U has been, it’s failed to establish much of a foothold in the market, and as such is one of the company’s worst performing pieces of hardware in its storied history.

While one pressing question relates to just how Nintendo is going to climb out of a hole that has seen it neglect its home console audience for more than 12 months, there’s also the question of how it’s going to compete in an increasingly saturated home gaming market.

For one, by the time the NX launches in early 2017, Sony will have the PS4 Slim, PS4 Pro and PlayStation VR on store shelves, while Microsoft will have Xbox One S and its appealing Xbox-Windows cross compatibility, which may tempt gamers to invest in a gaming laptop over an additional gaming console. There’s also Xbox Scorpio coming in late 2017. Throw in HTC Vive, Oculus, and the seemingly invincible power of the smartphone market, and you have a melting pot of options.

We know that Nintendo can find a way out of this mess. The Gamecube didn’t sell particularly well, but it had strong third-party support and led Nintendo to be the only gaming division of that generation to make a profit. Its successor in the Wii needs no introduction. The Wii U is somewhere in the middle: it has the uniqueness of the Wii and the appeal on the Gamecube, but it lacks the third-party support that both of those before it had.

Where does that leave the NX? Rumours of a console-portable hybrid sound interesting, but the real balancing act is going to be in managing expectations and feeding those hopes with an affordable piece of technology.

Third-party support is and always has been what defines the success of a console. Sure, the Wii U may be sold at a profit, but the company’s market share is almost non-existent right now. That brings the company’s value down. Pokemon Go can only help for so long: it’s a bandaid solution, and one that can’t be overly efficient considering Nintendo’s splintered share in The Pokemon Company. The Wii U has struggled in appealing to a mass market due to a lack of third-party support, something publishers tried to offer at launch with year-old games that most people had already played.

The Wii succeeded not through third-party support but through a unique selling point that raised eyebrows and created a non-gaming crowd albeit one with a low attention span, which is now firmly focused on smartphones and tablets.

Support for the NX from both consumers and the industry is ultimately going to come down to price. Industry analyst Michael Pachter says what we already know: that it won’t sell unless it has third-party support. It won’t get that support unless publishers think their games will sell well. Their games won’t sell well unless the console is selling. And the console won’t sell unless the price is right. It’s the dreaded chicken-egg scenario.

“If it’s a console and costs $199, it will sell extremely well; if it’s a handheld and costs $399, it’s dead in the water.  The odds are that it’s something in between, but I don’t want to guess until I see what it is,” Pachter told Gaming Bolt.

If the NX is expected to be released in March 2017, that would mean an announcement within the next few weeks, and surely before Christmas. Nintendo simply can’t afford another launch similar to that of Wii U and the 3DS. While the latter eventually recovered, the market confusion and pricing of the Wii U ultimately made it a hard sell. And with more competition than ever, that pricing sweet spot is even more important.

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