Nintendo Labo: Innovation and sustainability in the gaming industry

Nintendo Switch has just become America’s fastest selling home games console selling 4.8m units in 10 months since launch.  This exceeded the previous record of 4m units, also held by Nintendo for its Wii.  (To blow our own trumpet for a moment, we had predicted in a previous blog at its launch that the Switch “could set the gaming world alight.”)

Nintendo Labo: DIY at its finest

Not content with that, though, Nintendo announced its innovative new IP ‘Labo’ about which the press are already writing “this latest idea is so crazy it might just work” and “how small our imaginations were, and how glorious it is to be blindsided by Nintendo again.”

So, what is Nintendo doing that other companies aren’t, and what can we all learn from them?

In short, Nintendo has a history of finding inventive ways to drive product sales.  One of its key strategies is to attract as broad a market as possible to its products.  This is usually achieved through innovation of both software and hardware, yet rarely conforming to what the wider market would consider progress. Whilst Microsoft and Sony are locked in a battle of creating the most powerful systems on the planet, Nintendo regularly produces significantly less powerful architecture, instead innovating how we interact with its products.

In 2006 Nintendo attracted the casual market with the Wii, whose familiar user interface looked like a relatable remote control and couldn’t have been more intuitive to use.  Naysayers said the Wii was underpowered and wouldn’t succeed, yet it went on to become America’s fastest selling console in history, and sold 101.18 million units worldwide over a ten year period.

In 2011 it released the 3DS, innovating with true 3D on-screen, without the need for glasses, and a second touch-screen.  Sales stand at over 66.12 million units and, after multiple hardware revisions, sales continue to climb.  This compares favourably to Sony’s quintessential, powerful, yet significantly more archetypal Playstation Vita which launched in 2011 and is estimated to have only sold between 10-15 million units.

Ignoring the Wii U misstep, Nintendo appears to be back on track with Switch. Now, by launching Labo, it continues to re-imagine how consumers interface and interact with the console.  Positioned as “interactive, build-and-play experiences designed to inspire creative minds and playful hearts alike,” Nintendo is again challenging our perception of what a games console is or does.  In doing so, it is broadening its potential market beyond traditional users to increase unit sales.

It’s an interesting curve ball, at a time when companies are increasingly pushing AR and VR at consumers, yet it’s easy to forget that Nintendo’s 3DS console brought us a plethora of pack-in AR games way back in 2011.  Companies have been jumping on the AR bandwagon ever since.  Apple last year released their ARKit development tools to developers, ingeniously facilitating effective AR across most iOS devices capable of running iOS 11, instantly enabling AR on “hundreds of millions” of devices.  Google’s take, ARCore, was first available on the Samsung Galaxy S8 and its own Pixel phone, with the company saying it “hoped to make the system available to at least 100 million users”.   Yet with Labo, Nintendo are taking it one (side) step further, tasking users with building toy pianos, motorbike handle bars and even wearable robot suits out of pieces of cardboard, tape and string, which then combine with the Switch’s screen and controllers in a multitude of ways, to deliver a completely new level of play.

It’s an interesting approach, fusing education, creativity and play – something that will likely attract parents who are less comfortable purchasing a traditional games console for their children. But the question has to be asked: will this generation of digitally-enabled children really derive much fun from the Blue Peter approach to gaming?

Labo launches in April.  It will be interesting to see whether it proves another sales-driving success for Nintendo’s latest console or proves to be one of the company’s rare missteps, like Wii U. Either way, it is clear that Nintendo’s persistent drive to innovate in very different ways to its competitors has allowed it to enjoy levels of success few businesses achieve, and in that, there is perhaps a lesson for us all.


James Dodd

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Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work in the TMT (technology, media, and telecoms) space, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.