There's been a lot to digest from
Nintendo's earnings report, but I wanted to focus this discussion primarily around one topic, using a simple chart.
Nintendo Accounts and Nintendo Switch Online:
- Nintendo says 290 million Nintendo Accounts have been created to date.
- Nintendo wants their paid NSO subscribers (the red bar) to grow. The easiest targets are the unpaid, but active users (the blue bar).
- Online multiplayer games are the biggest driver of NSO subscriptions, so expect to see a lot more of them in the years ahead.
- The yellow bar represents users that have Nintendo Accounts, but haven't played any Switch games in a long time (maybe even ever).
- This is the largest segment of Nintendo Account holders, and is a largely untapped audience for their console business.
- Nintendo is ready to invest "up to 300 billion yen" (around 2 billion USD) to facilitate the growth of their digital business. Of all their ongoing investments, this one is the largest by far. They will:
a) Form Nintendo Systems with DeNA
b) Expand Nintendo Switch Online features
c) Create more Nintendo eShops across Asia and South America to reach more users
d) Strengthen their presence on e-commerce sites
e) Set up more physical Nintendo stores
Questions for us to discuss:
1. What kind of online/multiplayer games should Nintendo be putting on Switch to grow Nintendo Switch Online subscriptions? What genres should they be looking at? How should they go about developing (or soliciting from third-parties) these games?
2. What other features should they attach to Nintendo Accounts and NSO, in order to strengthen their digital business and bolster retention of paid subscribers? Is the answer to have more legacy content available? Is it to do something along the lines of PS Plus or Gamepass? Is it something else entirely?
Quick note: A lot of the figures in the chart above have been back-calculated using various figures and percentages in Nintendo's own report.