In June 2019, Nintendo announced that it was pushing the release date for Animal Crossing: New Horizons, an eagerly-awaited game for its Switch console, to March 20, 2020. The company asked fans to be patient. It had no way of knowing that when the game showed up—amid a worldwide pandemic that left millions of people worldwide stuck at home and more than a little stressed out—its timing could hardly have felt more perfect.
In Animal Crossing: New Horizons, every character is a cheery little animal except players, who are represented as cheery little humans. They inhabit cozy islands and live leisurely, low-key lives that play out in real time, rather than at the breakneck pace of most video games. There is no explicit goal, and the game never ends. Crucially, support for Nintendo’s online service allows players to visit friends who are also playing the game and hang out—a social activity that, during lockdown, made the game’s fantasy islands feel more normal in some ways than real life did. The game became a phenomenon, outselling every other Switch game in history except Mario Kart 8 Deluxe and overflowing onto social feeds as players shared the pleasant times they were having.
Even Shuntaro Furukawa, Nintendo’s global president since 2o18 and a 27-year veteran of the 131-year-old Kyoto, Japan-based game maker, was startled by how deeply New Horizons resonated. Given that it was the latest installment in the two-decade-old Animal Crossing franchise, “to an extent, we did have a certain expectation that sales would do well,” he told me when we spoke recently, mostly with the aid of an interpreter. But “last year, right before release, we saw that the pace of sales for this title was very fast. And that’s something that we did not foresee.”
Because of quarantine I wasn’t able to visit my mom today. But at least we got to hangout in #ACNH ???????????? pic.twitter.com/A0ObpYZ2bP
— Drama ☁️✨ (@DramakinsTv) April 12, 2020
As a gentle ray of positivity during a wrenching moment in history, Animal Crossing: New Horizons has been unique. At the same time, it’s classic Nintendo. In an age when the reputation of tech giants has never been worse, the company’s sheer wholesomeness feels like a throwback to simpler times. Questions involving it and its products rarely get more heated than whether adorable Animal Crossing raccoon/entrepreneur Tom Nook is a good guy or a ruthless capitalist.
Endearing though its products tend to be, Nintendo is on a capitalistic roll of its own. After 2012’s Wii U console never quite caught on, pundits—who have a long history of prematurely writing the company off during its periodic downturns—helpfully told it that it should exit the hardware business and focus on designing games for other companies’ devices. In the aftermath, its biggest star, Mario, and other characters did hop onto smartphones in iPhone and Android games such as Super Mario Run and Animal Crossing: Pocket Camp. But instead of abandoning its own hardware, Nintendo created the Switch—an ingenious Transformer-like convertible TV console/handheld device that delighted fans and silenced critics.
And even though the Switch has reached middle age in console years, it’s still in robust good health—the top-selling gaming console in the U.S. for the first quarter of 2021, according to research firm NPD. Between the Switch’s March 2017 release and the end of 2020, Nintendo sold almost 80 million units in total, putting it within striking range of the Wii’s total of 102 million units. (Though the Wii was a legendary hit, it had become something of a has-been at the same point in its lifespan .)
That the four-year-old Switch remains so strong, says Nintendo of America President Doug Bowser, is “really challenging assumptions on what a video game console cycle can be.” But for more than a year, Nintendo—and the gaming business in general—has benefited from the fact that so many people have been cooped up. As the pandemic subsides and we increasingly venture back outside, will the Switch start to show its age?
Mat Piscatella, NPD’s executive director for games, doesn’t think so. “So long as [the Switch] content library continues to be supplemented by new releases, and hardware remains available and perhaps incentivized from time to time with refreshes or promotion, the Switch should enjoy a few more years of strong sales as it phases into the latter stages of its lifecycle,” he says. If that happens, it will be especially impressive given that the Switch will compete with the newer and shinier Sony PlayStation 5 and Microsoft Xbox Series X, both of which arrived just last November.
However post-pandemic life pans out, Nintendo’s own vision of its future is not entirely dependent on keeping people glued to Switch screens. For years, it’s been quietly fleshing out a plan to extend core intellectual property such as Mario, Animal Crossing, and The Legend of Zelda beyond games. The company defines its four new investment areas as merchandising expansion, mobile expansion, theme park activation, and visual content.
Merchandising is, well, merch—not just kid-oriented stuff such as Mario Hot Wheels sets and Zelda dolls, but also collaborations with Levi’s, Puma, ColourPop, and other notable brands. Mobile is smartphone apps. Theme parks are the company’s Super Nintendo World areas at Universal Studios parks, the first of which opened on March 18 in Osaka, though it closed again on April 25 as coronavirus cases surged in Japan. And visual content encompasses the Super Mario movie that Nintendo is currently working on with Minions purveyor Illumination, scheduled for release next year.
That’s a lot of activity outside of Nintendo’s traditional comfort zone. But when Furukawa talks about Nintendo’s ambition to deploy its intellectual property across new media, he goes out of his way to stress that there’s still one thing at the heart of the company’s mission: Nintendo video games running on Nintendo hardware.
“Our objective has always remained the same,” he says. “To connect and entertain more consumers with Nintendo IP, in the hopes that they may become interested in the world of our dedicated video game experiences. By doing this, our goal is to create a connection that transcends a particular game, platform, or console generation.”
Even if Nintendo remains as dedicated to video games as ever, it’s easy to see why it might aspire to create additional revenue streams. The game business is deeply cyclical: Just as a hit console such as the Wii or Switch will buoy the company’s fortunes for years, it takes time to reboot after a disappointment like the Wii U. A broader portfolio of products should help balance things out.
It’s not just about the rides–it’s about the experience within the attraction.”
Nintendo of America president Doug Bowser
Such brand extensions “can be a tricky path, and not all games are suitable for crossing over to other forms of entertainment,” says Colin Sebastian, a senior research analyst at Robert W. Baird & Co. “But Nintendo has a lot of unique brands and characters, and a very loyal fan base, which makes this strategy more appealing than for other video game franchises.”
The opportunity is there. The challenge is that when Nintendo succeeds, it’s usually by creating things—such as the Switch and Animal Crossing: New Horizons—that you couldn’t imagine anyone else coming up with. The company is keenly aware that flooding the market with stuff that doesn’t feel as special as its own platforms and games could damage the brand it’s so carefully crafted.
“Although the ways we are expanding our IP are increasing, we are very, very careful about where and how our IP is licensed,” says Furukawa. “We are not deploying our characters and worlds merely to increase public exposure.”
Beyond the game
Unless you’ve completely tuned out pop culture for decades, you know that Nintendo’s kingdom has long sprawled well beyond video games. Children of the 1980s could watch Super Mario TV cartoons, eat Super Mario Happy Meals, and sleep on Super Mario sheets in Super Mario pajamas. A few years later, Bob Hoskins played the peripatetic plumber in a live-action movie that’s well-remembered by the Nintendo faithful, if only for being terrible. And Nintendo NY, a two-story Rockefeller Center shop bulging with toys, apparel, and other Nintendo-inspired goods has been around since 2005.
But around a decade ago, Furukawa says, the company decided to get serious about maximizing the creativity, quality, and overall Nintendo-ness of its presence outside gaming. Among the first major signs of this initiative was its 2015 announcement of its collaboration with Universal Parks & Resorts. Universal Studios Japan’s Super Nintendo World reportedly cost as much as $578 million to build; additional outposts are in the works for Universal’s parks in Hollywood, Orlando, and Singapore, though opening dates and other details are yet to be announced.
Reviews of the Osaka attraction from those who made it in during the weeks it was open before its current closure have been enthusiastic. Furukawa says that Nintendo Senior Managing Director and Creative Fellow Shigeru Miyamoto—not just the creator of Donkey Kong, Super Mario and The Legend of Zelda, but video gaming’s most enduring, visionary genius, period—took an active hand in bringing it to life. “At the same time, we are not experts in creating theme-park attractions,” he adds. “So I think it’s very important to have a great partner.”
Nintendo games have long felt like theme parks in digital form; Super Nintendo World flips the script by bringing familiar game elements into the real world. (The attraction’s look and feel are so faithful that you might have to squint at photos to verify that they’re not game screenshots.) In the flagship Mario Kart: Koopa’s Challenge ride, you zip along a track while wearing a visor-mounted, augmented-reality display, making for an experience that blurs the physical and virtual. If you spring for a Power-Up Band—a wearable that syncs with the Universal Studios smartphone app—you can also compete with other parkgoers to collect virtual coins, stamps, and keys.
“There are Easter-egg moments that occur all around the attraction,” says Nintendo of America President Bowser. “It’s not just about the rides–it’s about the experience within the attraction. It’s so true to the Nintendo experience,” thanks to “constant stewardship of the brand and of the IP all the way through the park.”
Such stewardship will be even more critical with Illumination’s upcoming Super Mario animated movie. Announced on February 1, 2018, the film remains largely in stealth mode, with its title, exact release date, storyline, and visuals under wraps. About all we know for sure is that Illumination chief Chris Meledandri and Nintendo’s Miyamoto are coproducing; left to their own devices, fans have been busy cranking out fantasy posters and trailers.
From a creative standpoint, adapting Super Mario into a movie is more fraught with risk than turning it into a theme-park attraction. Hollywood, after all, wants to tell stories about protagonists who undergo life-changing experiences by the time the end credits roll. But one of the secrets of Mario’s universal appeal is that—despite having died untold billions of times in game-ending mishaps over the past 40 years—he always springs back to life just as he was. Mario is good-hearted, energetic, and competitive, but otherwise not a sharply defined character—a plus when your job is to represent players around the world, but not an obvious virtue for moviemakers.
Furukawa’s concern about the possibility of Nintendo’s game protagonists getting boxed in by their new extracurricular activities is visceral. Speaking of offshoots from Nintendo games in general, he underlines that “we must make sure that the results are true to the players’ experiences, and that they would never prevent Nintendo’s developers from making another unique game featuring the same characters.”
Mr. Miyamoto is very, very hands-on with the production of this movie.”
Nintendo president Shuntaro Furukawa
Even if cinematic Mario does nothing to impede Nintendo’s own creative juices, there’s a lot that could go wrong. Case in point: Paramount’s Sonic the Hedgehog movie was delayed for three months so that the studio could revise how the Sega character looked after his fans reacted badly to the trailer. Still, Nintendo devotees—who have never stopped smarting over the 1993 live-action Super Mario Bros. movie’s near-total abandonment of video-game canon—have reason to be hopeful this time around.
“It’s not that we’ve asked Illumination to handle everything,” says Furukawa. “Mr. Miyamoto is very, very hands-on with the production of this movie.” Illumination, whose Lorax and Grinch films veered far from their Dr. Seuss source material, has also emphasized that Miyamoto knows best. “We are keeping him front and center in the creation of this film,” Meledandri told Variety in 2018.
However the movie turns out, it seems unlikely to be a one-shot experiment. The appeal of Nintendo’s properties may skew younger than Marvel and DC’s superheroes, but it’s easy to visualize them becoming a similar idea factory for Hollywood—a big-budget Zelda theatrical adventure here, a Kirby Netflix series there. Furukawa acknowledges the potential beyond a single Mario movie: “Animation, in general, is something that we are looking into, and not just this franchise,” he says.
Allocating brainpower
Furukawa acknowledges that as Nintendo’s ambitions expand, the company could spread itself too thin. As much as it cares about quality control, “something we really made sure to avoid was that when being engaged in this IP expansion outside of game development, that we don’t cut into the game development resources on our side,” he says. “And to realize that, we made sure that although people who deeply understand the characters and deeply understand the game are involved, that we keep the number of people involved to a minimum.”
You can understand why Nintendo might fear too much of its brainpower seeping into side projects. Its continued success in gaming is contingent on a steady stream of fresh ideas—and, eventually, a new platform that goes beyond the Switch as it went beyond the Nintendo platforms that preceded it. (According to the rumor mill, there could be an interim step—a 4K-ready Switch Pro with an OLED screen—by year’s end.)
Asking Furukawa about Nintendo’s take on trendy matters such as the potential impact of VR and AR on gaming is a little like interrogating Tim Cook about Apple’s interest in emerging technologies. Neither chief is going to leak any unannounced plans. They’re even careful not to sound giddy about tech for tech’s sake. Instead, it’s all about the end result as expressed in products that are distinctly the company’s own.
Nintendo, Furukawa says, doesn’t plot its future around “virtual reality or augmented reality or another form of technology that is going to really become popular in the industry. It’s more about what technology can we use to really provide players and consumers with a new, never-before-seen experience.” One recent example: Mario Kart Live: Home Circuit, a Switch game that joyously mixes realities by letting you maneuver a real camera-equipped remote-control Mario Kart around obstacles—both physical and virtual—in your own home. The underlying technology was created by Velan Studios, a small company based in Upstate New York—a reminder that just within the gaming realm, Nintendo has long worked well with outside partners.
One of Nintendo’s highest-profile partnerships is with Niantic, the San Francisco-based creator of Pokémon Go, the category-defining AR game inspired by the Pokémon franchise, which Nintendo co-owns. In March Niantic announced that its next AR game for smartphones would be based on Nintendo’s Pikmin, another popular Miyamoto creation featuring tiny plantlike critters. Rather than drawing players away from Nintendo’s hardware, Furukawa says, such phone-based experiences are a powerful marketing tool: “We have found, as we hoped, that our mobile experiences are encouraging people to purchase our Nintendo Switch hardware and software.”
Despite the frequency with which Furukawa reminds me that Nintendo’s new uses of its IP are meant to drive sales of Nintendo games on Nintendo devices, the company is also keen to forge bonds with fans that are about something deeper than merely moving product. To that end, it has been highlighting the fact that users have signed up for 200 million Nintendo Accounts, a number that hockey-sticked in September 2019 when Mario Kart Tour arrived on iPhones and Android phones. That figure includes customers in countries where Nintendo doesn’t even sell its own hardware.
Just how Nintendo intends to leverage those 200 million accounts beyond their current functionality–such as letting customers manage software purchases and parental controls–isn’t entirely clear. But it seems to have some ideas in store, including ones that might connect the dots between the familiar and emerging uses of its IP. “It’s a long-term relationship in the end,” says Bowser. “It’s all about the enduring nature of that relationship. And that is the true core of Nintendo’s business model as we go forward.”
Nintendo may have an uncommonly well-defined view of what it wants to be, but it’s ready to express it in new ways. “We realize that unless we reach outside of video games, that it’s going to be difficult for our creative vision to come to fruition,” says Furukawa. For the company to keep its winning streak going, that vision will have to surprise fans—and maybe even Nintendo itself.
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