Nintendo’s internal target for its first-year sales of the Switch has risen to 16 million from 10 million. In the company’s most recent quarterly report, released in October, it announced profit of $209 million, after regularly reporting losses in previous quarters. Its stock is up more than 75 percent this year.
“Neither analysts nor investors predicted the strength of adoption for the Switch,” says Piers Harding-Rolls, who leads a group of game industry analysts at IHS Markit, a research firm.
After years of resistance, Nintendo has also embraced the widespread move to mobile gaming that has reshaped the industry. Late last year, it introduced Super Mario Run, bringing the mustachioed plumber to the iPhone for the first time. Introducing new versions of some classic consoles, like the Super Nintendo, has also provided a revenue lift.
But the major reason for the company’s recent success has been its ability to identify and correct several problems with the Wii U, a console it released in 2012.
Third-party publishers made few games for the system, and Nintendo’s games, while lauded, were released infrequently, then not at all.
The problems started with branding, however. The device’s name implied an iterative upgrade to the Wii, an earlier hit that popularized motion-sensing controllers, but the Wii U was a much different console.
The Wii U’s controller, which included an iPad-like screen that allowed for new game possibilities but also defied easy explanation, compounded the problem.
“It was a bit difficult for consumers to understand what the system was about,” said Shigeru Miyamoto, a top executive at the company and the creator of many of Nintendo’s most celebrated games during the past three decades.
Satoru Iwata, the company’s president when the Wii U was released, recognized these issues. Before his death in 2015, from complications related to cancer, he set in motion changes that have helped the company since.
Mr. Iwata pushed the company to refine the Wii U’s design for the Switch, rather than pivot from them. The Switch comes with a small screen that can be attached directly to the controllers or remain separate and connect to a TV. People can play the machine as a hand-held device or as a more traditional console. “It is truly portable,” Mr. Kazdal said.
Much of the marketing has focused on that versatility, an easy concept to convey. The console, Mr. Miyamoto said, combines “all of the different play styles we’ve explored through our products in the past.”