Nintendo's License to Print Money 

26 Jun 2017

It’s 2017.

There are at least two stories¹²on major tech sites covering playing old console games.

Nintendo has the rights to many, many of these games (as they’ve released them on various iterations of the Virtual Console). Plus an even bigger backlog of games from various other consoles they’ve licensed (or already own, i.e. the N64).

Nintendo has a major hit with the Switch. It’s portable and a home console. They’ll likely have sold upwards of 10 million Switches by the end of the year.

Just charge us $5-10 a month for an on-demand virtual console service. Even at $50 a year, I would expect that, even very conservatively, 10% of Switch owners would pay. That’s $50,000,000, or about a 1% increase in Nintendo’s revenue.

(Now, assume a more likely 25-50% attach rate, and you’re talking potentially a 5% increase.)

I’m sure there’s digital licensing issues, i.e. the deals they have with the various game companies covers certain types of digital distribution, but not others. Maybe Konami is going to want a slice of the pie for every subscription. But then there’s the Spotify/Apple Music model here; give the producers a tiny cut of each subscription (since they’re used to help the marketing), and then slice them off royalties when games are played.

There’s free money sitting on the table, and the sooner the game companies realize it’s from the streaming(-ish) model, and not from the “let’s package up Sonic for the 10th time and sell another full game”, the sooner they get to make money off of all of their legacy IP.

Nintendo (and, probably Sony and Microsoft, but Nintendo more than most because of their classic IP) literally has a mint sitting in front of them, waiting to start filling their pockets with new money as soon as they are willing to. Striking now, while they have a system that is still hot, would let them capitalize and make the Switch into an evergreen system.

(And would make me very happy.)