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Why the Holidays Are Nintendo Labo’s Last Chance

Nintendo Labo is in trouble. Its blink-and-you-missed-it appearance in Nintendo’s Q2 earnings report underscores that sad fact. After barely qualifying as a top performer with 1.39 million units sold in the first quarter, Labo vanished from the rankings during a quiet summer.

“Our expectation is that sales will accelerate because Nintendo Labo is a product that people can choose to buy as a gift for kids during the holiday season much like a regular toy,” the company explained.

While video game sales tend to be terribly front-loaded, toys take a slow-and-steady approach before exploding at the holidays. Nintendo maintains public satisfaction with Labo’s performance, having always expected it to be a slow burn. But, now, that fire is at risk of going out altogether.

A lot rides on the next two months. “I had high expectations for Labo at the initial announcement that, so far at least, appear to have been a bit too enthusiastic,” NPD’s Mat Piscatella said. “But I’d agree that the holiday period would be the time for an uptick to happen.”

That tracks with Nintendo France’s Philippe Lavoue saying he only expected to sell about 20% of Labo’s stock before September, with the rest to come around Christmas. Talk about putting a lot of eggs in the holiday basket.

“It would be highly unusual for a video game product to do this, although certain Toys to Life and dance/music games like Guitar Hero were more holiday heavy than most games,” Piscatella explains. “Possible? Sure. Probable? Guess we’ll find out.”

Everything looked promising back in January. Designed for “the young and young at heart”, Labo combined traditional video game experiences with do-it-yourself construction more akin to the maker movement. The YouTube announcement video quickly raced past 10 million views and nationwide hands-on demos booked up in minutes.

Investors took notice, too, as the company’s share price jumped 4.2%. Nintendo appeared to have all the ingredients for another breakout hit.

Except for the sales. In Japan, approximately 120,000 units of Toy-Con 01: Variety Kit and Toy-Con 02: Robot Kit sold in the opening week, accounting for just 30% of the initial shipment. Stateside, the Variety Kit ranked fourth in the April NPD report. September’s Toy-Con 03: Vehicle Kit didn’t move the needle much either.

Some games just fail to find an audience. That’s life in the industry. But Labo deserves a closer look before slipping away. It’s different. It could be important.

From building a fishing rod to a submarine to a full-sized robot suit, Labo teaches users basic coding skills and IR implementation — all under the guise of play. STEAM edutainment has been tried before, but never on this scale. Or with a company like Nintendo behind it.

This out-of-the-box game/accessory hybrid holds huge potential, perhaps because it emphasizes creation just as much as consumption.

If Labo sounds like a perfect fit for schools, Nintendo agrees. Last month, they announced a partnership with New York-based Institute of Play to bring Labo kits to elementary schools across the country. Expect more moves like this in the future.

This collaboration also tackles Labo’s biggest problem — the current Switch user base. Nintendo spent the past eighteen months assiduously marketing the Switch as a hardcore gaming machine. Stung by the premature collapse of Wii sales (and the never-was of Wii U), they smartly pivoted in a new direction.

But that’s left fallow ground for a casual project like Labo. Kids and families — those most likely to purchase and construct Toy-Cons together — haven’t joined the Switch ecosystem yet.

That could change this fall with “Super Mario Party,” the “Pokemon: Let’s Go” releases, and “Super Smash Bros. Ultimate.” And Nintendo might be right about millions of children dreaming of finding Labo beneath the Christmas tree.

Hopefully, Nintendo’s faith is rewarded because the whole Labo concept goes so much further than gaming. How many future game developers will start off experimenting with rudimentary coding in Toy-Con Garage? Or picture the young child inspired to pursue musical training after tickling the cardboard on the Miniature Piano Toy-Con.

Labo’s success could legitimately make the world a better place. By the time the dust clears in January, we’ll all know just how much life Nintendo Labo’s got left in it.

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