29/09/2021 - KATIE HOLT
Nintendo Switch Online + Expansion Pack extends late lifecycle appeal

Nintendo reveals holiday and 2022 release pipeline

In September 2021, Nintendo streamed its latest Direct presentation and revealed the upcoming release roster for the holiday season and beyond. In addition to full game releases such as Kirby and the Forgotten Land, and upcoming downloadable content including Monster Hunter Rise: Sunbreak, the publisher announced a new subscription plan for Nintendo Switch Online.

Nintendo Switch Online currently offers individual and family plans

Nintendo Switch Online currently offers two subscription plans. Individual membership provides a single Nintendo account with the service and is available in one- (£3.49/$3.99), three- (£6.99/$7.99), and 12-month increments (£17.99/$19.99). A family membership provides the same service for up to eight people across multiple systems and is only available on a 12-month plan at £31.49/$34.99. Among other benefits, membership includes support for online play, a selection of Nintendo Entertainment System (NES) and Super Nintendo Entertainment System (SNES) games, and access to exclusive in-game extras.

Nintendo Switch Online + Expansion Pack reveal

Nintendo Switch Online + Expansion Pack is a new subscription plan set to launch in late October 2021. Membership will include all the current Nintendo Switch Online benefits but will add a selection of Nintendo 64 (N64) and Sega Genesis/Mega Drive titles. At launch, the service will include nine N64 titles and 14 Sega Mega Drive titles. Both ‘virtual consoles’ plan to add more games later, likely taking a similar approach to the NES and SNES releases which saw libraries expand over time. The regularity of the content will be an important measure for many consumers that are used to seeing monthly updates of games into other console subscription services.

Nintendo is yet to announce the pricing for the premium subscription plan, which is surprising considering it launches at the end of October. At present one-month Nintendo Switch Online subscription currently retails at half the price of PlayStation Plus (£6.99/$9.99) and Xbox Live Gold (£6.99/$9.99). Nintendo Switch Online + Expansion Pack may see monthly prices closer to the cost of other console platform subscription plans.

However, a portion of the Nintendo community has expressed dissatisfaction with the company for offering fewer free games, less frequently than PlayStation Plus and Xbox Live Gold, despite it being a cheaper offering. Ampere’s games consumer data supports this, with more churned Nintendo Switch Online subscribers (19%) in the US stating the service did not offer enough free games than churned PlayStation Plus (13%) and Xbox Live Gold (13%) subscribers. The quality of the free content has also been questioned in comparison with other services. Such feedback may have led to the strategic decision to withhold the cost of the product, allowing Nintendo to set a price point accounting for public opinion while maximising sales and maintaining a strong public image.

New subscription tier could broaden late lifecycle appeal of Switch and Switch Online service 

While some other games subscription services are enhancing their existing subscription tiers, Nintendo’s decision to roll-out a premier tier for Nintendo Switch Online is less surprising considering the low cost of the Switch Online service. There is very little margin to work with there considering the inclusion of third-party content. Once the decision was made to expand the bundled games offer, a higher-priced tier of subscription was commercially inevitable.

This does undermine the simplicity of the Switch Online offer, however. This product approach also calls into question how other types of content (perhaps older Switch games for example) might be bundled into the service in the future. Will there be additional subscription tiers? Or will other non-N64 or Genesis games be available in this ‘Expansion’ offer? Product complexity does not aid conversion and can frustrate users.   

Ampere forecasts that by the end of the year, world Nintendo Switch Online subscriptions will reach 33m and Switch family consoles will reach a cumulative sales volume of 122m. This remains a relatively low penetration (27%) of the Switch installed base (although a substantial amount are multi-user family accounts).

Retro games have widespread appeal and create opportunities to gain subscribers. Ampere games consumer data shows that penetration of Nintendo Switch Online in the US across 13-64 year olds is lowest across older demographics. Adding nostalgic N64 and Sega Genesis games will help drive interest in the Switch and Switch Online from late lifecycle adopters as well as more heavily monetising existing subscribers that take the new premium tier. Once consumers join the Nintendo Switch Online ecosystem, they will be exposed to a wide range of content that may influence further spending and incentivise long-term subscriptions.

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