From 'Zelda' to Switch: How Nintendo Won 2016 Without Really Trying

It was supposed to be a quiet year for Nintendo, but a perfect blend of nostalgia and mobile games meant it was anything but

2016 is the year that Nintendo unexpectedly soared. Credit: Nintendo/Glixel

There was a moment in the very early 1990s when it looked like Sega may actually beat Nintendo. The company had gone from nothing to owning 55% of the US console market in less than a year; Sonic the Hedgehog was the biggest hit in the world; the brash, brilliant advertising around the Genesis had 14-year-olds everywhere enraptured. "Genesis does what Nintendon't" went the marketing call.

But under the unwavering, steely guidance of veteran president Hiroshi Yamauchi, Nintendo came back. It didn't compete on hype, or technology or price. It competed on sheer video game quality. Between 1992 and 1994, the SNES pummelled the Genesis with multimillion-selling classics. Super Mario Kart. Street Fighter 2. Star Fox. Secret of Mana. They just kept coming. This is what Nintendo does. It comes back.

Fast-forward to the beginning of 2016. The 3DS was leveling out, the Wii U was a disaster, toiling for quality releases (though it certainly had a few of those), and offering a technological novelty – a controller with its own display – that few game designers, let alone gamers, saw the benefit of. Early in the previous year, the company had mentioned a new console, unenticingly codenamed NX, but told us we'd have to wait a long time for details. It also showcased a partnership with Japanese smartphone gaming giant DeNA, but wouldn't elaborate much. Everyone was expecting a quiet year. That's not what happened.

Instead, Nintendo began to build the infrastructure of its new future – and the bases would be nostalgia and social connection.

The first evidence was Miitomo, its debut global smartphone release. Launched in March, the cute little social quiz app claimed number one spots on app stores around the world, hitting 10 million downloads within a month. The interest didn't last, but Miitomo charmed fans and signaled Nintendo's intention to explore the possibilities of the smartphone space beyond, say, lazily extending its Virtual Console store onto iPhone and Android. A couple of months later, Nintendo was meant to be gearing up for a quiet E3, with no hardware announcements in the pipeline and an ailing console, but then blew everyone away with The Legend of Zelda: Breath of the Wild for both the Wii U and NX, offering a vast open environment, survival elements and a visual style resembling a beautiful Studio Ghibli movie. Suddenly things were getting a lot more interesting.

Then came Pokémon Go – the entertainment phenomenon of the summer, and easily the biggest augmented reality release in the history of the tech. Launched in July the game quickly saw swathes of trainers taking to the streets, tracking down errant jigglypuffs and bonding with other players. Developer Niantic Labs used the location-based gaming expertise it developed for its previous game Ingress to buttress an extremely limited Pokémon experience with solid social features and a design structure that led naturally to social behaviors. In short, a lot of people met and played together, feeding major new outlets hungry for feel-good stories. 600 million downloads later and Niantic is still adding elements to maintain some semblance of that initial frenzy – and as an investor, Nintendo has made around $115m out of the game so far.

That may not sound like much, but Pokémon Go also had a halo effect on other areas of Nintendo's business – especially the 3DS. Sales of the handheld were up 80% year-on-year in August, with legacy Pokémon titles booming in the afterglow. Pokémon Sun and Moon went on to become the fastest selling games in the history of the handheld.

In the background, of course, was the Switch – a console concept that had barely registered with anyone earlier in the year. By October, when the new machine was named, there was considerable interest in Nintendo's latest offbeat invention, once again prioritizing form factor over brute strength, and now marrying dual home/portable usability with technology provided by PC chipmaker Nvidia and a large roster of games. Clearly, Nintendo had learned from the paucity of big titles attached to its Wii launch unveiling, and hit fans with promises of Zelda, as well as titles from 48 different third-party publishers.

But the most important thing Nintendo learned from the year – or at least had confirmed for it – was that it's a company sitting on a goldmine of widely exploitable nostalgic licenses. People keep making the mistake of comparing Nintendo to Sony and Microsoft, but it is resolutely not a technology manufacturer – it's a brand owner. In this respect, the company much more closely resembles Disney: it has these characters, worlds and stories that accompany people through their lives, that speak to them beyond any primary source material. Mario, Luigi, Link and Pikachu are the gaming equivalents to Spider-Man, Mickey Mouse and Han Solo – they're capable of transferring their appeal to a variety of experiences, for a huge range of demographics, and fans will follow them. Nintendo announced this year that it is finally acknowledging this and is leveraging its characters for its upcoming theme park partnership with Universal, for which Mario creator Shigeru Miyamoto is taking the lead on the rides and experiences it will provide.

It's a business position underlined by the huge success of the Mini NES console, a reproduction of the original NES system with 30 built-in games. It's also underlined by Super Mario Run, which breaks plenty of smartphone game design rules (charges a comparatively high premium price and demands a seamless internet connection), but was still downloaded 2.85 million times in its first day, and took just four days to reach 25 million downloads – a week faster than Pokémon Go. There have been better platformers and better auto-runners, and reviews of the game were mixed enough to cause a drop in Nintendo's stock value – but the game is being downloaded because Mario fans just want to see and play a Mario game on their cell phones.

"Nintendo is cool again," sums up Ben Parfitt, a writer for industry news site, MCV. "Pokémon Go was by any measure an absolute phenomenon that singlehandedly made Pokémon one of the hottest properties on the planet, and positioned Nintendo as one of the main players in the smartphone sector. The Switch beat PlayStation, Xbox and an entire ecosystem of VR devices in terms of 2016 global Google searches, and the NES Classic has been a thunderous success."

It's the Google search comparison that stands out here. Because what Nintendo has really excelled at this year is tapping into a general retro trend that has brought us everything from Stranger Things to a Guns N' Roses reunion, and redirecting that interest toward its own brands and history. Nintendo has switched the conversation from the future (VR, teraflop processing engines, 4K output) to the past, and more importantly to its own past. Ahead of the crucial holiday season, it wasn't Xbox One or PS4 on Jimmy Fallon, it was Nintendo, it was Mario and it was Switch.

What this means for next year is the question now intriguing the whole games business. Can Nintendo's console, which barely counts as HD in the 4K era, really beat the Xbox One S and PS4 Pro? When I put this question to experienced analyst Chris Dring at his answer summed the whole year up:

"The success of Pokémon Go and the impact that had on 'proper' Pokémon games bodes well for the Switch strategy. If Nintendo can upgrade Super Mario Run players to Switch, it should have a very good year. Switch is trying to fill this gap that sits between mobile and console, between Clash of Clans and Call of Duty. We don't know if there is really a demand for that sort of device, or if there is an audience looking for something a bit deeper than what's on mobile and is also willing to invest in a dedicated machine. But the strategy is intriguing, and it if pays off, it will likely benefit the entire games industry."

For a business ever more resistant to risk, ever more reliant on projects that come with some semblance of product recognition, Nintendo's determination to exploit its past and keep its hardware cheap and accessible may well make perfect sense. This March, the Switch could turn the lights on for a whole new way of thinking about what success looks like.