Week in Review - How long can Nintendo cheat death?

Hello friends, and welcome back to Week in Review!

Last week, I wrote about Facebook’s trillion dollar milestone. This week, I’m looking at the iconic Japanese gaming company that always seems to have one foot firmly placed in the past.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

The big thing

Nintendo is no stranger to going against the grain (for better or worse).

This week, the company disappointed gamers thirsty for more powerful hardware when they released an updated Switch that wasn’t really as updated as many had hoped. The system boasts a new OLED screen but isn’t gaining a higher resolution display, updated processing power or more RAM. The updated system will retail for $349 when it drops in early October.

Here’s my colleague Brian’s rundown on the new hardware.

Sure, the [OLED edition] is a little disappointing for Nintendo gamers who wanted a system that could play titles in 4K, but it’s also yet another sign that the company isn’t looking to deviate from history when it comes to… well, anything…  but especially meaningfully revamping its flagship system mid-cycle. Nintendo’s relentless adherence to legacy is a blessing and a curse to gamers who have seen industry-wide gaming trends push monetization over consumer enjoyment time and time again, but have also seen titles on other consoles grow far more ambitious. The question is whether Nintendo’s current hardware bets that are moving Switches at a rapid pace are still setting the company up for future success in a services-based console war.

It’s not just graphics anymore, Sony and Microsoft’s embrace of cloud gaming and subscription gaming could reshape the console wars into a services war.

While Nintendo has largely been doing what fans have expected since the Switch launch, churning out an outstanding franchise follow-up or two each year, it’s no secret that their efforts to expand their online services ambitions have seemed pretty half-assed. Their mobile titles were largely disappointments and while their Nintendo Online service has tens of millions of subscribers paying $20 annually for some light online features, it’s clear that they’ve moved at a glacial pace in delivering more to their die-hard fans. In 2021, it seems the company’s most daring move has been to start licensing their IP to toy manufacturers more often — they’re also debuting a Mario Watch in partnership with a global watch brand.

Too many articles have been written over the years about how Nintendo’s failure to embrace new industry trends could kill them, and yet here they are more valuable than ever. At the same time, Nintendo is trying to embrace some of these trends, they’re just doing a bad job at it. Nintendo has always played by its own hardware rules, but when it comes to software services maybe they should just start looking to the competition.

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Other things

Here are the TechCrunch news stories that especially caught my eye this week:

Jeff Bezos officially hands over the reins
Monday was the first day on the job for Amazon CEO Andy Jassy, replacing founder Jeff Bezos who grew the company to the nearly $2 trillion giant it is today. What’s on the docket for Jassy? Just ensuring the company can plug along after breakneck pandemic-fueled growth while combatting government antitrust action and growing unionization efforts among its swelling workforce.

Defense Department axes $10 billion Microsoft cloud deal
One of the more surprising developments of the week was the DoD’s pulling the plug on the $10 billion JEDI Cloud contract it had awarded to Microsoft over Amazon’s protests. The move sent Amazon stock soaring.

Instacart poaches top Facebook exec to be its new CEO
Facebook exec Fidji Simo will be taking over as CEO of Instacart ahead of the company’s expected IPO after a surprise announcement this week. Simo replaces Instacart founder Apoorva Mehta.

China’s Uber faces government skewering after NYSE listing
China’s ride-hailing giant Didi has found itself at war with Chinese regulators after its public debut on the New York Stock Exchange this week. Now, the company’s apps are being pulled from app stores across China. The firm raised about $4 billion in its U.S. IPO.

Trump sues social platforms in bid for attention
Trump dropped lawsuits against Twitter, Facebook and Google this week, claiming that their censorship of him was illegal. These cases don’t tend to go anywhere, but with Facebook’s Oversight Board recently pushing his reinstatement on the platform back to 2023, it’s clear he’s going to have work his hardest to stay in the headlines (or at the bottom of my newsletter).

Extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

What does Andy Jassy want?
“Handling that transition smoothly and showing investors and the rest of the world that it’s business as usual at Amazon is going to be a big priority for Jassy, said Robin Ody, an analyst at Canalys. He said it’s not unlike what Satya Nadella faced when he took over as CEO at Microsoft in 2014..”

The NS1 EC-1
“Few companies have parlayed internet infrastructure experience into a world-class engineering company quite like NS1. The New York City-based startup has raised more than $100 million as it builds a strategic node at the core of the modern web delivery tech stack. Customers are flocking: 760 at latest count (up from 600 a year ago), with year-over-year bookings growth well into the triple digits.“

Can advertising scale in VR?
“One of VR’s prospective revenue streams is ad placement. The thought is that its levels of immersion can engender high engagement with various flavors of display ads. Think billboards in a virtual streetscape or sporting venue. Art imitates life, and all that…”

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