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NVIDIA reported its latest financial results yesterday, and the company had a rather good quarter. Part of that was due to Switch, which has taken off in its first few months.

NVIDIA CEO Jen-Hsun Huang commented on Switch’s performance during a financial call with analysts and investors yesterday. Huang noted that the system is a “major component” of the company’s business along with self-driving car platforms and AI.

Nintendo partnered with NVIDIA on the main technology behind Switch. Each unit features a chipset from the Tegra line.

During its latest financial call, NVIDIA CEO Jen-Hsun Huang was asked if the company is interested in pursuing consoles further in light of Switch’s success. That led him to talk up Switch, stating:

Consoles is not really a business to us. It’s a business to them. And we’re selected to work on these consoles. And if it makes sense and the strategic alignment is great and we’re in a position to be able to do it, because the opportunity cost of building a game console is quite high. The number of engineers who know how to build computing platforms like this – and in the case of the Nintendo Switch, it’s just an incredible console that fits in such a small form factor. And it could both be a mobile gaming device as well as a console gaming device. It’s just really quite amazing, and they just did an amazing job.

Nvidia CEO says Switch is “very Nintendo”

Posted on 11 months ago by in Switch | 141 Comments | 0 Likes

Nvidia CEO Jen-Hsun Huang appeared at CES 2017 this weekend, and while the main topics of the keynote were not Nintendo related, he briefly did touch on the Switch when asked if it connected to their AI endeavors:

Nintendo Switch is a game console. It’s very Nintendo. That entire experience is going to be very Nintendo. The beauty of that company, the craft of that company, the philosophy of that company—they’re myopically, singularly focused on making sure that the gaming experience is amazing, surprising, and safe for young people, for children. Their dedication to their craft, that singular dedication, is quite admirable. When you guys all see Switch, I believe people are going to be blown away, quite frankly. It’s really delightful.

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During NVIDIA’s latest financial call, CEO Jen-Hsun Huang fielded a question about the company’s growth in gaming revenue. Revenue in this area saw a 60 percent jump and rose by $576 million over the last quarter.

The question prompted Huang to share some interesting comments about Switch and NVIDIA’s overall relationship with Nintendo. If his opinion, he believes the two sides could work together for two decades.

Here are Huang’s comments in full:

“I guess you could also say that Nintendo contributed a fair amount to that growth. And over the next – as you know, the Nintendo architecture and the company tends to stick with an architecture for a very long time. And so we’ve worked with them now for almost two years. Several hundred engineering years have gone into the development of this incredible game console. I really believe when everybody sees it and enjoy it, they’re going be amazed by it. It’s really like nothing they’ve ever played with before. And of course, the brand, their franchise and their game content is incredible. And so I think this is a relationship that will likely last two decades and I’m super excited about it.”

Switch will be incorporating a custom Tegra processor from NVIDIA. Previously, it was said that “development encompassed 500 man-years of effort across every facet of creating a new gaming platform: algorithms, computer architecture, system design, system software, APIs, game engines and peripherals.”

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After rumors claimed Nvida was working with Nintendo to provide a processor on what was then known as the NX, it has recently been confirmed that Nvidia is indeed the partner responsible for creating the processor for the Switch and stands to make $320 million annually from the partnership.

Jefferies & Co.’s Mark Lipacis shared his analysis of Nvidia stock today. On the subject of what the partnership between Nvidia and Nintendo could result in, Lipacis had this to say:

While Nintendo has been largely uncompetitive against the Sony PlayStation and Microsoft Xbox, we think the Switch has the potential to see more shipments. There are very few details on the price point, but we think the Wii and Wii U case studies are instructive. In the first 12 months of launch, Wii shipped 13m units and the Wii U shipped 4m units. Assuming 5-8 million units at a $40 ASP for Tegra translates to $200-320m in revenues and $0.11-0.16 in EPS.