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Switch’s successor contributed to record annual R&D spend at Nintendo | VGC

Company reiterates next console will continue integrated hardware and software approach…

www.videogameschronicle.com

As noted by Niko Partners senior research analyst Daniel Ahmad, Nintendo spent approximately $880 million on R&D—more than in any prior year—during the 12 months ended March 31, 2021.

The company commented on the R&D spend in an investor Q&A following the publication of its latest financial results on Thursday, according to Japan-based analyst and investment adviser David Gibson, who summarised some of the highlights on Twitter.



Nintendo reportedly said the main reason for the increased R&D budget was that software and outsourcing costs are increasing for Switch.

The company is also investing in online, and given that Switch is midway through its lifecycle, Nintendo said it’s necessary to invest in its next game platform too, which will continue to follow the company’s integrated hardware and software strategy.

 

[Dream-Knife]

Yeah it's probably VR.

 

[killatopak]

we sure it's a successor and not just a pro model?

 

[mcjmetroid]

I think Switch "Pro" will end of being Switch 2 but the Switch 2 will have another... hook or gimmick to use a better word?

I still refuse to believe Nintendo will release a pro model to the switch with merely better graphics.

 

[Pidull]

Can they invest some of it into their own analog stick solution?

 

[Mister Wolf]

The Super Switch with DLSS will be glorious.

 

[Azelover]

I think Switch "Pro" will end of being Switch 2 but the Switch 2 will have another... hook or gimmick to use a better word?

I still refuse to believe Nintendo will release a pro model to the switch with merely better graphics.

Yeah, that was the mistake people made last time, with the Wii HD.

Whether that was a good move by Nintendo or not, I don't argue. I just don't know it, in the grand scheme of things. Might as well have been.

 

[Rat Rage]

With all the millions spent, maybe Nintendo will finally find a way of designing an analog stick (again) that is not a piece of shit and - when it comes to the stick itself at least - consists of some quality materials to prevent it from breaking way to often on its owners?

 

[Dream-Knife]

With all the millions spent, maybe Nintendo will finally find a way of designing an analog stick (again) that is not a piece of shit and - when it comes to the stick itself at least - consists of some quality materials to prevent it from breaking way to often on its owners?

Even the sticks on the Xbox and PS controllers fail now. It's a parts supplier issue. None of these companies make their own sticks, all these companies have people whos job it is is to go to China and pick out parts for their new devices.

 

[Rat Rage]

Even the sticks on the Xbox and PS controllers fail now. It's a parts supplier issue. None of these companies make their own sticks, all these companies have people whos job it is is to go to China and pick out parts for their new devices.

First party game controllers are such an important / essential part of every (new) console, the console manufacturers need to make sure they are of high quality. I don't care how they achieve that. If they are forced to manufacture them themselves, then so be it.

 

[Dream-Knife]

First party game controllers are such an important / essential part of every (new) console, the console manufacturers need to make sure they are of high quality. I don't care how they achieve that. If they are forced to manufacture them themselves, then so be it.

I agree, but then you'd be paying a lot more for a controller too.

I do wonder what happened to the stick boxes used on the original Xbox. Those things last forever and have the click.

 

[Fbh]

It's 4K cardboard.

Switch Pro will launch with Labo 4K

 

[Astral Dog]

I think Switch "Pro" will end of being Switch 2 but the Switch 2 will have another... hook or gimmick to use a better word?

I still refuse to believe Nintendo will release a pro model to the switch with merely better graphics.

Why? They made the DSi, and new 3DS this nothing new for Nintendo.

next gen Switch is not Switch Pro. Nintendo should keep the Switch alive as long as possible, until the tech/price is right for Switch 2, it will end up significantly weaker than the other systems no matter what they do, but as long as companies don't run out of games to port Nintendo will be fine.

 

[sainraja]

Imagine if Nintendo surprises everyone and releases a box that is equal or more powerful than the boxes that we currently argue over? lol

 

[Darko]

give me a switch as powerful as the last gen consoles (pro and one x) and I’ll be okay

 

[ultrazilla]

Imagine if Nintendo surprises everyone and releases a box that is equal or more powerful than the boxes that we currently argue over? lol

I was just going to comment on that exact sentiment!

That's a huge amount of money for a simple "refresh" that would simply have a 4k output and nicer 1080p screen IMO.

I suspect this "Switch Pro" will be a proper "next generation" Nintendo console that will probably be as
powerful as a PS4 Pro/Xbox One X. So all that R and D went into the inevitable SOC design along with studying cooling/overheating issues from increased performance, DLSS implementation(I really hope it's DLSS 2.0)
along with adding more and faster ram. Hoping they go at least 8 gigs for developers.

It's a perfect entry for Nintendo at this point. If fans want the "newer" "next gen" games, the system will feature those because it's powerful enough for decent ports. I'll gladly pay up for a more powerful model.
If you're content with your Switch/Switch Lite, you can keep it and be content with whatever else third parties and Nintendo decide to port for that.

The bottom line, I want better image quality and performance for games on the Switch going forward. Keeping my fingers crossed.

 

[Woopah]

I think Switch "Pro" will end of being Switch 2 but the Switch 2 will have another... hook or gimmick to use a better word?

I still refuse to believe Nintendo will release a pro model to the switch with merely better graphics.

Why? They did that for the 3DS and DLSS is great opportunity for Nintendo.

 

[Rat Rage]

I agree, but then you'd be paying a lot more for a controller too.

No. Controllers are already way overpriced for what they are. Console manufacturers just sell them at such a high price, because they can get away with it and often, for example in the case of Sony consoles, which tend to be sold for a loss at the start of every new hardware generation, mitigate some of their financial losses. I don't even mind that. I'm ok with that, as long as first party controllers stay high quality.

 

[mcjmetroid]

Why? They did that for the 3DS and DLSS is great opportunity for Nintendo.

Why? They made the DSi, and new 3DS this nothing new for Nintendo.

next gen Switch is not Switch Pro. Nintendo should keep the Switch alive as long as possible, until the tech/price is right for Switch 2, it will end up significantly weaker than the other systems no matter what they do, but as long as companies don't run out of games to port Nintendo will be fine.

I still see the Switch as more of a console. It just reminds me of the Wii HD days were people were absolutely convinced that it was planned and NIntendo was ready to announce it at any second.

but it never happened...

It probably should have but as we know these days HD development is more complicated than we knew at that time.

I do believe NIntendo has strongly considered the idea of a Switch "pro" and put resourses behind it but there is almost very little reason to do it at this point.
The system is selling extremely well as it is.

Now a Switch successor thats fully backward compatible with the Switch 1, with the AI upscalling + a new hook/gimmick.
I can see this happening far more than a Switch Pro at this point.

The time to do a Switch pro was last year at the latest - now it's getting too close to new console territory.

 

[jroc74]

If alot of this is for hardware it sounds promising.

I keep putting off getting a Switch, might as well wait to see what the new one will be.

 

[Woopah]

I still see the Switch as more of a console. It just reminds me of the Wii HD days were people were absolutely convinced that it was planned and NIntendo was ready to announce it at any second.

but it never happened...

It probably should have but as we know these days HD development is more complicated than we knew at that time.

I do believe NIntendo has strongly considered the idea of a Switch "pro" and put resourses behind it but there is almost very little reason to do it at this point.
The system is selling extremely well as it is.

Now a Switch successor thats fully backward compatible with the Switch 1, with the AI upscalling + a new hook/gimmick.
I can see this happening far more than a Switch Pro at this point.

The time to do a Switch pro was last year at the latest - now it's getting too close to new console territory.

Nintendo has been very clear that Switch is still in the middle of its life, so a successor isn't coming until 2024 at the very earliest.

A premium priced revision makes perfect sense for Nintendo as it allows them to raise hardware revenue, even if unit sales remain flat. Plus it helps them achieve their stated goal of selling multiple Switches per household.

The difference with the Wii HD was that it was always just speculation, while there are places I trust saying the Switch Pro is planned.

 

[TLZ]

Even the sticks on the Xbox and PS controllers fail now. It's a parts supplier issue. None of these companies make their own sticks, all these companies have people whos job it is is to go to China and pick out parts for their new devices.

Doesn't make it ok. Now that everyone knows these parts aren't good enough, invest in better ones. Remember, Nintendo used to be about quality.

 

[TLZ]

Imagine if Nintendo surprises everyone and releases a box that is equal or more powerful than the boxes that we currently argue over? lol

Never going to happen.

 

[Edgelord79]

Wonder if the Switch 2 will be backwards compatible with Switch games....

Who am I kidding. Probably have to purchase the games again as per Nintendo modus operandi.

 

[Dr Bass]

The Super Switch with DLSS will be glorious.

Super Switch would be such a great name.

 

[Woopah]

Personally the investments in software are far more exciting for me. Purchase of Next Level Games and growth of MonolithSoft are good moves and I'm hoping the mention of outsourcing means more partnerships with independent developers like Platinum and MercurySteam and other publishers like SE and KT.

 

[Tschumi]

Classic long jump thread title notwithstanding, there's unavoidably going to be a next Nintendo console, so yeah i guess it would be in development now... Would a pro version really requisite unprecedented R&D? Doesn't seem likely.. "We need to invest billions into handheld 1080p!" Ehh..

If it is so expensive, i guess it's something new...

 

[V4skunk]

Switch formula is already a winner so I expect the next Switch to be essentially a next gen version with nvidias latest tech.
I wouldn't be surprised if the screen is also still 720p when you consider many Switch games wouldnt run any where near native resolution in handheld form.

 

[Oddvintagechap]

we sure it's a successor and not just a pro model?

“Pro” model makes no sense. This is Nintendo, not Sony. They dont care about a small amount of fans what to see Mario in 4K. Nintendo is all about margins, market penetration, and huge consumer pool. Their limited hardware helps their first party games.

 

[Dream-Knife]

No. Controllers are already way overpriced for what they are. Console manufacturers just sell them at such a high price, because they can get away with it and often, for example in the case of Sony consoles, which tend to be sold for a loss at the start of every new hardware generation, mitigate some of their financial losses. I don't even mind that. I'm ok with that, as long as first party controllers stay high quality.

Doesn't make it ok. Now that everyone knows these parts aren't good enough, invest in better ones. Remember, Nintendo used to be about quality.

All the controllers use the faulty sticks. I'm guessing there isn't an alternative.

 

[Unknown?]

Switch U.

 

[McCarth]

Nintendo regularly spends roughly $650mm /y, this really isn’t that significant of an increase especially in relation to overall R and OP.

 

[LordBlodgett]

give me a switch as powerful as the last gen consoles (pro and one x) and I’ll be okay

This would be great, but it's not really feasible with the mobile form factor. While you can expect the CPU to perform as well, or possibly even better, there is no way the GPU side will come close. I'm expecting the GPU to land somewhere between the original Xbone and the original PS4 in terms of power. DLSS will be one addition that could help it to out perform those platforms though, so we'll see

 

[mcjmetroid]

Nintendo has been very clear that Switch is still in the middle of its life, so a successor isn't coming until 2024 at the very earliest.

A premium priced revision makes perfect sense for Nintendo as it allows them to raise hardware revenue, even if unit sales remain flat. Plus it helps them achieve their stated goal of selling multiple Switches per household.

The difference with the Wii HD was that it was always just speculation, while there are places I trust saying the Switch Pro is planned.

To Nintendo though a consoles lifespan is as long as companies keep releasing games for it.

Technically the PS2 had a lifespan for nearly 15 years or more for instance and technically the Wii was still going with the Just Dance games.

They could spin in that way.

Also don't believe what Nintendo tell you they're a business. Previous posters here have already said the example of the new 3DS where they denied it and then announced it one week later.

 

[Woopah]

To Nintendo though a consoles lifespan is as long as companies keep releasing games for it.

Technically the PS2 had a lifespan for nearly 15 years or more for instance and technically the Wii was still going with the Just Dance games.

They could spin in that way.

Also don't believe what Nintendo tell you they're a business. Previous posters here have already said the example of the new 3DS where they denied it and then announced it one week later.

Yes Nintendo won't comment on rumours, so if they told a journalist that they don't have a Pro I wouldn't believe them.

But when they tell investors Switch is only in the middle of its lifespan I do believe they mean a successor isn't coming for a few years. And when Nikkei and Mochizuki talk about what Nintendo suppliers are telling them I believe them.

When do you think the Switch successor is coming, and why do you think Nintendo will release it on that date?

 

[mcjmetroid]

Yes Nintendo won't comment on rumours, so if they told a journalist that they don't have a Pro I wouldn't believe them.

But when they tell investors Switch is only in the middle of its lifespan I do believe they mean a successor isn't coming for a few years. And when Nikkei and Mochizuki talk about what Nintendo suppliers are telling them I believe them.

When do you think the Switch successor is coming, and why do you think Nintendo will release it on that date?

If I was a betting man I would say March 2022. Which would be about 5 years after the launch of the original Switch and enough time after the hype of the PS5 and XboxSX has died down. Either that or this Christmas.

One thing is for sure, They're holding back games and have been for some time. Is it COVID related? partially I'd say but getting ready for a new system is more likely.
Perhaps this new system has a feature ( like VR maybe but probaly not) that they coudln't resist moving games from the current console onto the new system.
I cannot see them holding games for a mere platform upgrade. This feels bigger.

Anyway on the lifespan thing, If the Switch continues to sell like it does it doesn't matter what nintendo says is the lifespan of the console. It will last very long.
Remember how long the 3DS lasted after the Switch came out? To nintendo the lifespans overlap each other.

 

[UnNamed]

I don't think

Nintendo reportedly said the main reason for the increased R&D budget was that software and outsourcing costs are increasing for Switch.

According to this, there is no specific indication R&D are increasing especially because of a new product.

Switch in its mid cycle means no Switch 2 or a new console anytime soon.

 

[Woopah]

If I was a betting man I would say March 2022. Which would be about 5 years after the launch of the original Switch and enough time after the hype of the PS5 and XboxSX has died down. Either that or this Christmas.

One thing is for sure, They're holding back games and have been for some time. Is it COVID related? partially I'd say but getting ready for a new system is more likely.
Perhaps this new system has a feature ( like VR maybe but probaly not) that they coudln't resist moving games from the current console onto the new system.
I cannot see them holding games for a mere platform upgrade. This feels bigger.

Anyway on the lifespan thing, If the Switch continues to sell like it does it doesn't matter what nintendo says is the lifespan of the console. It will last very long.
Remember how long the 3DS lasted after the Switch came out? To nintendo the lifespans overlap each other.

I can guarantee you that Nintendo is not releasing a full successor by March 2022. That's wayyyyyy too soon. They still have a lot of major Switch projects in development for 2022 and the console itself is just about reaching its peak.

They're forecasting to sell over 25 million Switches this fiscal year so there's no reason to move on to a successor. A revision to keep hardware sales high makes perfect sense though. By the end of this year Switch will have over 100 million units in people's hands and momentum will still be strong.

After the Switch came out the 3DS collapsed pretty quickly. Same as the DS collapsed once the 3DS released. Nintendo doesn't want the Switch to collapse for at least the next 2/3 years.

 

[killatopak]

“Pro” model makes no sense. This is Nintendo, not Sony. They dont care about a small amount of fans what to see Mario in 4K. Nintendo is all about margins, market penetration, and huge consumer pool. Their limited hardware helps their first party games.

but they're the ones who started the pro models with DSi and New 3DS. If anything, Sony only followed them.

 

[mcjmetroid]

I can guarantee you that Nintendo is not releasing a full successor by March 2022. That's wayyyyyy too soon. They still have a lot of major Switch projects in development for 2022 and the console itself is just about reaching its peak.

They're forecasting to sell over 25 million Switches this fiscal year so there's no reason to move on to a successor. A revision to keep hardware sales high makes perfect sense though. By the end of this year Switch will have over 100 million units in people's hands and momentum will still be strong.

After the Switch came out the 3DS collapsed pretty quickly. Same as the DS collapsed once the 3DS released. Nintendo doesn't want the Switch to collapse for at least the next 2/3 years.

I'm not sure what to tell you..

I mean the 3DS really only died last year.. 3 years into the Switch's lifetime. I considered it dead a long time before that but certainly Nintendo wouldn't and technically they're right. I think Nintendo are still releasing games for it so they're still supporting it so therefore to them.. it's still alive.

Sometimes as well you got to release a successor while the iron is hot. Don't forget I say a successor will be completely backward compatible with the Switch games so they can still release their current games in development and if the rumours are to be believed they would still be nicely upscaledon the new technology they're working on.

But this successor will also have it's own exclusive game so it's gonna be a new console/handheld.
This new successor will also have a new Gimmick.

That's my prediction.

Edit: By the way I truly believe Nintendo will actually release a "pro" switch model as you can it, An even more budget model than the Switch LITE.. but AFTER the new successor has been released.

 

[Birdo]

I don't think their next console will be a Switch-like device.

I say this because Nintendo like to bring a whole new way of playing with each console release. They have even gone on record saying that just making a more powerful device isn't interesting to them.

So it will be interesting to see what they come up with.

 

[KingT731]

I don't think their next console will be a Switch-like device.

I say this because Nintendo like to bring a whole new way of playing with each console release. They have even gone on record saying that just making a more powerful device isn't interesting to them.

So it will be interesting to see what they come up with.

But they aren't going to abandon the portable segment either. Way too much money there so I'd likely keep expectations in check.

 

[alucard0712_rus]

The Super Switch with DLSS will be glorious.

New Nintendo 3DLSS U

 

[ethomaz]

Makes sense.
They don’t have a cheaper scrapped Tegra from nVidia this time.

 

[Roni]

Can they invest some of it into their own analog stick solution?

The solution is working as intended, it's a consumer product: it breaks and the consumer spends more money buying a proprietary replacement.

 

[Astral Dog]

I still see the Switch as more of a console. It just reminds me of the Wii HD days were people were absolutely convinced that it was planned and NIntendo was ready to announce it at any second.

but it never happened...

It probably should have but as we know these days HD development is more complicated than we knew at that time.

I do believe NIntendo has strongly considered the idea of a Switch "pro" and put resourses behind it but there is almost very little reason to do it at this point.
The system is selling extremely well as it is.

Now a Switch successor thats fully backward compatible with the Switch 1, with the AI upscalling + a new hook/gimmick.
I can see this happening far more than a Switch Pro at this point.

The time to do a Switch pro was last year at the latest - now it's getting too close to new console territory.

I still think its just a Pro and the fans are just going crazy with speculation, but who knows with Nintendo, from what they said they want to keep the (og) Switch alive as long as possible. introducing a new system this year would go against that if they need tons of exclusive software to sell it, along the cross gen ports i just want my Metroid V!

 

[ResurrectedContrarian]

I hope they are focusing on more "new ideas" for an upcoming generation, to rethink their consoles yet again or offer some new kind of experience, rather than just trying to cram more tech into a Switch+. I for one would hate to see Nintendo become Apple and just make an endless line of Switch variations like iPads.

 

[Woopah]

I'm not sure what to tell you..

I mean the 3DS really only died last year.. 3 years into the Switch's lifetime. I considered it dead a long time before that but certainly Nintendo wouldn't and technically they're right. I think Nintendo are still releasing games for it so they're still supporting it so therefore to them.. it's still alive.

Sometimes as well you got to release a successor while the iron is hot. Don't forget I say a successor will be completely backward compatible with the Switch games so they can still release their current games in development and if the rumours are to be believed they would still be nicely upscaledon the new technology they're working on.

But this successor will also have it's own exclusive game so it's gonna be a new console/handheld.
This new successor will also have a new Gimmick.

That's my prediction.

Edit: By the way I truly believe Nintendo will actually release a "pro" switch model as you can it, An even more budget model than the Switch LITE.. but AFTER the new successor has been released.

Releasing a successor when the iron is hot is very very rare. The way I see it, there are two reasons to launch a successor:

Reverse declining hardware sales

• In FY12 Wii sold 9.8 million and hardware sales had been declining for three years straight, so it made sense to launch a successor the following FY
• In FY20 PS4 sold 13.4 million and hardware sales had been declining for three years straight, so it made sense to launch a successor the following FY

In FY21 Switch sold 28.8 million and hardware sales have been growing for 4 years straight

In response to a competitor

• Nintendo released the DS in response to the upcoming PSP
• Microsoft released the 360 to go to market before the PS3

Sony and Microsoft have already launched their new consoles and there is no upcoming product that Nintendo has to counter.

So what do you see as the incentive for Nintendo to launch a successor? They can have a revision which offers a new gimmick (as shown by the DSi) and they can have a revision that has exclusive games (as shown by the new 3DS).

But in the end we'll just have to see who is right!

 

[rob305]

“Pro” model makes no sense. This is Nintendo, not Sony. They dont care about a small amount of fans what to see Mario in 4K. Nintendo is all about margins, market penetration, and huge consumer pool. Their limited hardware helps their first party games.

I still think they'll release it next year with BOTW2, just makes no sense to release a Switch Pro in 2021 with no games coming in over a year to showcase it

 

[H-I-M]

Record R&D for an OLED screen?
Mind you Samsung has been doing these since 2010...