Nintendo Should Make Its Own Game Pass
Rather than teaming up with Microsoft, Nintendo should make its own Game Pass service. Yes, the company may not have the servers required for such a feat, and yes, it may be rather slow-going to adopt new business methods, but it's the best way for the games-maker to not only accrue strong revenues but to control the service and how it takes shape.
Being able to control any service you make on a platform you own is extremely valuable. It gives you much more flexibility to make decisions and mold the service in the short- and long-term. Nintendo has already made its own little Game Pass-like service anyway with Switch Online's NES library. We expect this selection of classic games to expand to different platforms like SNES and maybe even Nintendo 64 at some point.
Is that enough to sustain strong subscriptions? It certainly helps. Switch Online now has over 8 million paying subscribers, meaning 25% of the Switch's 32 million install base has bought into the service.
Nintendo says it plans to boost value to the service in the coming years. Shortly after saying this, Nintendo released Tetris 99 exclusively on Switch Online and dramatically skyrocketed the service's acclaim.
But are Xbox LIVE Gold-style free games and an expanding roster of classic NES games enough? Does Nintendo need to make its own big Game Pass service? Well, yes and no. Yes because it could potentially make tons of cash, and no because it's doing quite well for itself. It honestly doesn't even need to adopt Microsoft's Game Pass right now--it just doesn't seem worth the potential risk.
If it were to make a Game Pass, it could roll out a limited selection of indies first and maybe add some premiere first-party games like Super Mario Odyssey and Zelda: Breath of the Wild at some point.
This theoretical service would branch off from Switch Online and offer a kind of tiered structure. But Nintendo's business model isn't built around the strong core of engagement like Microsoft's, so it'd have to be careful how it executed this plan. Hardware and full game sales are still big parts of Nintendo's business, but a Game Pass-like Switch Online extension could provide additive subscription earnings over time.
There's also the possibility Nintendo could make its own game streaming platform similar to Project xCloud.
The company patented an interesting Switch hardware add-on called a Supplemental Computing Device back in 2016. The SCD is kind of like an Expansion Pack that boosts the Switch's processing power for online gaming, and is specifically aimed at improving latency for multiplayer content. Streaming isn't outright mentioned, but we predicted the SCD could be a gateway to Nintendo's own games-as-a-service cloud initiative.
Also, remember the NVIDIA Tegra X1 chip found in the Switch is specifically designed to leverage the company's GeForce Now servers for game streaming. We predicted that the Switch could also be used in such a way, and tap the GeForce Now servers to stream Nintendo games.
Japan has been experimenting with on-demand Switch game streaming from the cloud for a while now. The first test was with Resident Evil 7 in 2017, and then Assassin's Creed: Odyssey in 2018. Both games were offered in a kind of rental fashion where you paid x amount of cash for x amount of game time.
Even back then we believed this was the beginning of something big with the Switch, and it could be a part of Nintendo's multi-year roadmap for the console. But whatever Nintendo does, it should be wary about signing big deals with other companies and bringing competing subscriptions over to its platform--especially ones that are built specifically to benefit a competing billion-dollar ecosystem of engagement and monetization.
Last updated: Apr 7, 2020 at 12:34 pm CDT
- Page 1 [What Game Pass Is, And Why It's So Successful]
- Page 2 [Game Pass Could Undermine Switch Online And Leech Playerbase]
- Page 3 [Hardware And Technical Issues]
- Page 4 [Counterpoint]
- Page 5 [Nintendo Should Make Its Own Game Pass]