For years, critics have been dismissing Nintendo’s console efforts. While their handhelds have always dominated the market, their consoles have suffered a lack of third-party support since the mass exodus of developers and publishers from the Nintendo 64 console and its expensive cartridge format. Since these developments, it has become common to see apathy among fans and critics towards Nintendo’s console business.

Should Nintendo stop making hardware? Perhaps they should maintain their handheld business while dropping their console hardware development In favor of either supporting other hardware as a third party or shifting all of their attention towards their thriving handheld business. As a fan of playing games on a large screen, that was a future I hoped to never see.

However, thanks to fast and affordable image streaming to television sets and my time spent with Nintendo’s Wii U console, the benefits of an eventual console/handheld hybrid caught my attention. Considering the effect such a move would have on the industry, Nintendo itself, and gamers alike has led me to another thought: perhaps Nintendo has already begun to move in this direction.

The State of Nintendo and the Two Industries

These days, Nintendo is often overlooked by Western developers and publishers and because of this, Nintendo’s fans get fewer options for games on their platform of choice. Western developers want Nintendo to conform to industry standards, but gamers buy Nintendo platforms for the Nintendo experience. They wouldn’t want that experience compromised for the sake of games that are already available on competing platforms. Nintendo is still relevant because they are different and they are at their best when they are different. Unfortunately, that means Western developers will continue to disregard Nintendo systems as a priority.

In Japan, there are different challenges. The Japanese gaming industry is far more conservative with their spending and as such, has fallen behind Western production standards in this generation. Due to rising development costs and the changing gaming habits there, the industry has trended towards mobile devices like handhelds and smartphones as its primary market. Development for mobile platforms tends to be cheaper, which better suits the fill-every-niche approach of the Japanese gaming industry. In addition, the commuter lifestyle and limited living space drive the consumers towards mobile devices for convenience. The market is mobile there and that is unlikely to change.

No support in the West and a mobile shift in the East — some would cite these as reasons for Nintendo to shift to a third-party business model. Nintendo would disagree.

\”What I believe is that Nintendo is a very unique company,” said Nintendo President Satoru Iwata in an interview this August. “It does its business by designing and introducing people to hardware and software — by integrating them.” He goes on to explain the virtues of this integration. “Those kinds of conditions have enabled us to create something that no other companies can create. Those kinds of backgrounds are there behind the fact that such a number of great Nintendo franchises exist. “

The Foundations Laid for a Hybrid Future

Nintendo has traditionally had two separate and independent hardware research and development teams, but this changed in the beginning of this year when the two divisions were merged. Now including nearly 300 employees, the newly merged hardware division is housed in a new $340 million facility at Nintendo’s Kyoto site. This merger could initially result in better connectivity between Nintendo’s current devices. For example, there have been rumors recently of a unified account between systems. The more interesting prospect, however, is in hardware design. Whether it is a hybrid system or two independent systems with deep connections, news of a unified hardware studio present interesting possibilities for future devices.

Nintendo’s strategic focus shifted with the launch of the Wii U in an effort to break the parasitic nature of video game consoles requiring television sets to function. While the console allows for many unique gameplay functions, including asymmetric gameplay, a touchscreen, and a second screen experience, the goal was that the controller’s screen was always on and able to play games in a semi-portable way.

“I am not sure this is an appropriate expression, but video game consoles have long been ‘parasites’ of TV sets at home.” Speaking before shareholders before the launch of the Wii U console, Iwata elaborated. “Game consoles have used TV sets in a family instead of being equipped with their own screen. However, the Wii U will be the first console free from TV sets.”

The Wii U could even be seen as a prototype for a true console/handheld hybrid. Instead of streaming from a home console to a controller with a screen, as you would with the Wii U, a stream would be sent from a controller with a screen to a Chromecast-esque relay that displays on your television set. This means that everything needed to play software is in the now entirely portable controller, the system itself.

The Benefits of a Single Platform

It is common practice to sell hardware at a loss, often a significant loss, in the video game industry. Sony and Microsoft have both lost millions of dollars by selling hardware in this way. Nintendo, while more conservative, has also sold at a loss. The industry makes money by selling games, not hardware. If video game publishers could give hardware away for free, they would, as it would mean a larger market for their software.

The division of mobile and console hardware was necessary in past generations, but with mobile tech growing faster than larger-sized component tech and the rise of zero-latency video streaming, the reasons to keep them separate are shrinking. If one product could do the job of two, more consumers would buy the one than either of the two. More people owning one hardware product means a larger potential market. For gamers, less money spent to buy a second platform means more money to spend on games. For publishers, it means a larger single install base of buyers who have been able to save money on hardware by purchasing one less device; money better put towards more software.

When it comes to marketing, let’s face it: Nintendo has done a bad job with the Wii U. Most consumers seem to think it is a peripheral for the Wii. This problem is complicated by Nintendo having to market two different systems simultaneously, a balance they have rarely pulled off well in the past. They aren\’t alone in this, either; while Nintendo has failed to properly promote awareness of the Wii U, Sony has failed to properly promote awareness of the Vita. Microsoft, on the other hand, did a great job promoting awareness of their Surface tablet, but failed at delivering a product anyone actually wanted. A sharper focus on a single platform can make for a less confusing and more effective ad campaign.

The largest benefit to gamers themselves is, of course, the games. Right now, full 3D Zelda games are limited to Nintendo’s consoles, mainline Pokémon games are limited to Nintendo’s handhelds, and the total number of games released on each platform Nintendo makes has dwindled far below what is made available for competing hardware. But, if you add the two lineups together, it is hard to imagine an issue with software droughts. It is commonly said that no console maker can survive without third parties; I would argue that, if Nintendo’s attentions were not divided by two platforms, they nearly could.

The Nagging Roadblocks on the Way to Progress

Despite the benefits mentioned above, the future of a hybrid system is not all sunshine and lollipops. Shrinking tech to portable dimensions greatly increases cost and heat output while also reducing battery performance. This means it is unlikely we would see a great performance increase beyond what the Wii U currently offers in a next generation portable. In addition, to fit into a portable device and operate properly, it would be unlikely to contain an HDD or disc drive. This would mean either a move back to cartridges or a move to a digital download marketplace, similar to those found on smartphones.

Thankfully, technical performance is less of an issue than it was before and Nintendo’s cartoonish style already looks phenomenal on Wii U spec hardware. The bigger issue is with third parties, who are often more keen to explore graphical realism and less willing to manage the smaller file sizes necessary for a non-disc based system without HDD.

Recently, I have also heard arguments over peripheral accessories. Nintendo, along with other companies, makes a lot of money on peripheral sales, which would be largely lost with a portable device. The problem with this theory is that it assumes displaying on a TV is the only console feature of a hybrid system. It is not. If a personal screen is no longer a limitation for a handheld device, why should exclusively personal controls remain necessary?

The only reason handheld devices do not support external controllers is that they are limited to a personal screen. If only one player can effectively see the screen, it is cumbersome for more than one player to actually play a game on the same screen. Enacting such a limitation would do worse than dampen peripheral sales; it would severely hinder local multi-player gameplay, as every player would require their own system.

For the record, the Wii U’s current crop of software informs us that there is no reason for the TV screen to be limited to mirroring what is on the handheld device’s screen, either. In fact, the potential need for a second screen experience when playing portably could lead to an additional peripheral to sell: a clip-on second screen. Of course, the need to explain all of that points to potential consumer confusion that would have to be addressed in marketing.

We then have the issue of ergonomic sensibilities conflicting with portability. The Wii U GamePad is big and bulky, designed for comfort in long play sessions. It has analog sticks, which would be too easily damaged on a portable system, and a large touchscreen that notably adds to the device’s size. The 3DS is small and compact, with circle pads replacing analog sticks and no triggers. It has smaller shoulder buttons and a much smaller screen. Design the system for portability and you will heavily compromise the quality and ergonomics of the controls; design the system as a larger and more ergonomic design and you sacrifice portability.

The Path Towards a Brighter Future

Whether or not a hybrid system will replace both the Wii U and the 3DS in the next generation is an eventuality only held back by the rapidly shrinking disparity in cost between mobile and full-scale chip sets. If Nintendo can make it work, it suggests a brighter future for both them and their fans, one in which the concern for consistent software releases would all but disappear beneath the unified software output that comes from focusing on a single platform.

In Japan, Nintendo could go all-in on a portable strategy that fits the new paradigm of the industry there. In the West, developers could look forward to a larger install base without the limitations that larger games have traditionally carried on mobile devices. Gamers who prefer handheld platforms would be given larger scale games, like console Zelda titles, while console gamers would benefit from more traditionally handheld-only franchises, like Pokémon. Gamers who tend to buy both would save money by only having to buy one system for two roles. Money better spent on more games.