Nintendo's Switch pivot swung it from a ¥24.5B loss back to profit in 2017

The Wii U confused people: its name implied a minor upgrade rather than a new machine, many developers stopped making games for it, and Nintendo acknowledged it had failed to market what made it unique. Console sales slid for years and mobile games nibbled at the audience.

In October 2016 Nintendo revealed the Switch as a hybrid of a home console and a portable system, letting players move from the TV to a handheld screen. Launched in March 2017 at $300, it sold 2.7 million units in its first month.

By July 2017 the numbers had turned: Nintendo posted a net profit of ¥21.26 billion for the April-June quarter against a net loss of ¥24.53 billion a year earlier, and operating profit of ¥16.21 billion versus an operating loss of ¥5.1 billion. It planned to ship 10 million Switches for the year and its shares had climbed more than 50 percent since launch.

Launching the Switch flipped Nintendo to a ¥21.26B first-quarter net profit after a ¥24.53B year-earlier loss, and it forecast a 2.2x annual profit jump.

The Switch merged console and handheld into one product, so it covered two markets at once.

Strong launch software (Zelda, Mario Kart) drove demand.

Restored third-party support the Wii U had lost.

Mobile hits such as Pokemon Go rebuilt brand awareness while the Switch carried hardware sales.

When a model fails, a single hybrid device that merges your console and handheld markets can restart growth better than a narrow follow-up.

Nintendo shipped over 10 million Switches in its first fiscal year and the console went on to be one of the best-selling machines ever. Profits and shares soared, and Nintendo re-established itself in the hardware market while keeping its mobile push.