Nintendo Labo: Genius or Insanity?

The French have a saying: Les extremes se touchent. It’s a way of saying that things so far out on either side of a spectrum might actually have some overlap. Some of the world’s brightest minds throughout history, for example, have had a touch of madness. Perhaps some of Nintendo’s designers have this trait too. Innovation requires unique thinking. Nintendo’s newest innovation, Labo, is a series of cardboard construction kits that interact with the Switch platform. And frankly, it feels so mad, that maybe it’s brilliant.

As Nintendo describes it, Labo “combines the magic of the Nintendo Switch system with the fun of DIY creations.” It draws on the appeal of building blocks like Lego as well as the Switch itself, which has already sold well over 14 million units worldwide. Nintendo will begin by selling a Variety Kit and a Robot Kit on April 20th, for $69.99 and $79.99, respectively.

Reactions to the Labo announcement a few months ago were, unsurprisingly, polarizing. Some took to social media to lavish praise on Nintendo for doing something truly creative, something that no other major company in the business would even dare to attempt. Others bemoaned the fact that Nintendo is charging people 80 bucks for pieces of pre-cut cardboard.

Nintendo’s product track record is certainly not flawless (Virtual Boy, Wii U anyone?) but if the house of Mario can legitimately sell cardboard pieces at those prices, it’s hard not to think of it as genius. The margins are going to be substantially better.

As Wedbush Securities' Michael Pachter explained, "The only costs are design (R&D) and marketing. My guess is that R&D is very low, but marketing is around the same as for any other games. So the difference in profits is the difference in R&D spending. That is likely $50 - $80 million total. If they sell 10 million Labo [units], the profit per unit will be $5 - $8 higher than a conventional game."

The announcement and pending launch also serve to fill a marketing gap for the Switch, which is coming off the stupendous release of Super Mario Odyssey last holiday but doesn’t have any major first-party titles on the immediate horizon.

“Labo is a great and novel product that fits well with Nintendo's history and its penchant for coming up with cool accessories,” Joost van Dreunen, CEO of SuperData Research told me. “Its key value currently is to boost the marketing effort for the Switch. Releasing the Labo footage unexpectedly bought Nintendo a lot of traction on social media, which is clearly a critical component to its overall marketing strategy. By continuing to feed its fanbase, Nintendo keeps its core offering top of mind.”

That said, the analyst was unsure “whether people will buy it en masse and whether it will have a life-cycle beyond a few weeks of novelty before it ends up on a shelf much less relevant.”

Predictions aside, Nintendo Labo is already a hit with one important crowd: creatives. The bulk of the developers I spoke to about the cardboard kits expressed genuine enthusiasm.

“There's something about building the toys you play with that I'm sure will reach a broad audience,” said Jean-François Major, co-founder at Tribute Games, which has released the Contra-like 2D action title Mercenary Kings Reloaded on Switch and other platforms.

“With games like Minecraft, we've proven people are open to non traditional and linear experiences. However, the Labo games will need to be as creative as the cardboard construction.”

Klaus Lyngeled, CEO of Zoink, which just released the platformer Fe, is equally enthused.

“I think it’s an amazingly creative idea,” he said. “I personally really love games that also are toys. A few years back we developed a plush toy for the Wii called WeeWaa. It was a real passion project for me. My kids were quite young then and both played a lot of games and with their plush toys, so I created this cute little character that could eat the Wiimote, and when you moved WeeWaa he would react accordingly on screen. 

“As we designed the game we explored lots of ways to use the accelerometer and IR camera and I can really see how Labo is being very creative with all these features.”

Mike Wilson, co-founder of both Devolver Digital and Good Shepherd, has gotten to know a wide array of developers over the years, and he knows creativity when he sees it.

“I’m pretty sure my response was the same as everyone else’s, which at first was like ‘WTF is this a joke?’ and then soon moved to ‘Wow this is crazy and kind of cool.’ As someone that works with a lot of developers, I don’t think the potential of Labo has even sunk[en] in,” he commented. “... I could see the younger end of Switch players really embracing it. I love it when Nintendo does weird stuff!”

Nintendo, of course, has always had youth in mind when developing its games. That family-friendly image extends to Labo, as well. It’s something that’s targeted at kids, yes, but importantly it’s an activity that can be enjoyed jointly with parents. Anecdotally speaking, my wife does not play games, but as a woman who’s very artistic and crafty, she’s already cut and assembled things for our two toddlers using Amazon boxes. Who’s to say that’s not an untapped audience for Nintendo?

“Since I have kids, I'm already planning on buying some of the Labo things,” John Comes, CTO of indie publisher tinyBuild Games told me. “As someone who was also a mechanical engineer at one time, the entire concept is right up my alley.”

Jeremy Dunham, VP of Publishing at Rocket League developer Psyonix is planning to purchase Labo as well. “I plan on buying Labo for my kids when it's released to see what they think. I'm really excited to see what kind of ideas this kit will spark and how different (or similar) those ideas are to other building sets,” he remarked.

There’s something especially gratifying about learning to build things. You take a certain pride in what you’ve constructed. When I was a boy in 1986, I used to play endlessly with a mechanized, battery-powered construction kit called Robotix. Had I been told that I could hook up my Robotix creations to my Nintendo Entertainment System to control Mario’s jump or Simon Belmont’s whip, I think I would have been ecstatic. Nintendo may be onto something special with Labo.

“My son already has an engineering mind, so the STEM learning opportunities will be huge,” Comes said. “I feel like this is the first gaming platform that can bridge the gap between 'games' and 'educational games'. There's such a divide there when you weigh teachings vs. fun gameplay.“

Dunham, too, is optimistic about the educational aspect, but he cautioned that Nintendo must remain open to broad possibilities with Labo.

“If you're only ever relegated to a few recurring designs, or add-on packs are hard to find, or any other number of challenges, it could be limiting,” he said. “I think of toys like Lego and love their concept of giving you blueprints, but still giving you the freedom to make whatever you want. If Nintendo Labo maintains that kind of flexibility, the potential is very, very high. The real trick is making sure that the cardboard itself is the only rigid thing about it.”

Major added, “Labo is a great opportunity to see what makes something tick… it [could]l be a great parent/kid weekend project. A Labo kit could replace building a birdhouse.”

Lyngeled took it even one step further, suggesting that Labo has genuine classroom potential: “I could see that the Swedish educational system might pick this up and start using it in class -- especially if you can start programming your own toys, which it seems like Nintendo are hinting at in the trailer. I also imagine that a community of Labo hackers will form and we might see some much more innovative designs floating around the internet."

But what about the selection of cardboard as Labo’s building material? Surely, Nintendo has made a mistake by not using plastic? Time will tell how durable these kits can be, but Nintendo explained the reasoning behind its decision in a recent investor Q&A.

Shinya Takahashi, Nintendo Director and Managing Executive Officer, remarked, "I'm sure we surprised everyone with the use of cardboard, but it's not so far-fetched if you consider how familiar the material is, at least to Japanese people who, from a young age, use it for play and as a material for creating things such as fancy crafts.”

Tokyo-based veteran games journalist Justin Leeper can attest to how ingrained the papercraft hobby is with Japan’s youth. His mind immediately turned to Origami upon watching the Labo announcement trailer.

“While a mere novelty in the West - ‘Aunt Carol can make paper cranes’ - origami is a long-standing and beloved art here in Japan. Building is much more than a niche portion of Japanese toys as well,” he told me. “Go to any toy store in Tokyo, and you’ll see beautiful dioramas you can buy and build from scenes out of Studio Ghibli movies, for example, or metal sheets that somehow turn into abstract TIE Fighters. Then there’s Gundam models, train sets, Lego... all based on building.”

He continued, “The Japanese are also big on packaging. A gift isn’t a gift unless its box is put in another cardboard box that’s placed in a decorative bag and wrapped with a few hundred yards of ribbon."

"Cardboard is called ‘danboru’, a word whose origins I’ve never known despite being written in the character set for foreign-to-Japan words. There’s a relatively popular manga character, Danbo, who’s a cardboard robot from the series Yotsuba&. If anything, it shows the acceptance of cardboard in Japan’s pop-culture consciousness.”

For his part, Comes isn’t concerned about Labo’s cardboard pieces. Should a piece wear out, there’s an obvious fix, he said:

“I personally feel like cardboard was the perfect material to use. It's very approachable. I'm not worried about it getting damaged. I mean, it's cardboard. If it breaks, take the last Amazon box you got and cut out the same piece.”

Along with the worries about cardboard longevity, there’s still the very legitimate issue of price sensitivity. Nintendo will have to convince parents that the value that Labo brings justifies the expenditure. Dunham, however, has seen much worse in the hobby industry.

“As a parent of two kids myself, I can tell you that most crafting/building/exploration kits are typically a bit more expensive than you'd expect,” he offered. “There appears to be a bit of a stigma associated with the cardboard so far, which is understandable, but kids and their parents will tell Nintendo really quickly if the quality and replayability is worth the price once it's out.

“Given that a lot of smart-device-controlled robots are typically in the range of $100 or more, though, I can see the argument that the ability to build the toy first would make the price worth it for some.”

Regardless of how well Labo performs on the market, Nintendo deserves credit for trying something this bold. And let’s say that it does take off, would the one-time playing cards company begin to partner up with outside developers to make unique kits for their games? Nintendo has shown an increasing willingness to work with third parties and especially indies on Switch, but extending Labo feels unlikely, even if it does get developers’ creative juices flowing.

“That would be fantastic [if they did],” exclaimed Comes. “I have a mechanical engineering degree and I've made games for 17 years. So building my own Labo thing would be a great combination of my two life loves. I'd spend hours tinkering with building them.”

Dunham liked this idea as well: “A Rocket League kit would be really neat to see on store shelves, but I imagine that Nintendo wants to see how its initial experiment works out first before opening the floodgates. If it is a success, though, and kids start asking for themed sets based on their favorite properties, Nintendo has shown in the past (in games like Smash Bros. and even our own to a lesser extent) that they have no problem finding ways to make that happen.”

Major went so far as to call Labo “an indie’s dream” and Tribute would love to see Nintendo reach out to indies for more ideas. “A lot of innovation comes from smaller studios. It would probably be a great idea to tap into other studios’ creative minds as long as Nintendo maintains a certain level of quality control,” he said.

Clearly, the developer community is fired up, but from a business standpoint, getting indies involved in Labo would still involve clearing some major hurdles.

“[It] would be amazing [to work on Labo], but unfortunately I don’t think it will happen. I don’t think Nintendo will fund an indie developer to make a game for Labo as it’s too niche,” Lyngeled said. “And funding on our own is too big a risk. We survive because we can sell digitally. Distributing a Labo kit on our own [would be] very complicated. We never managed to get the [WeeWaa] plush out on the market because of distributing.

“One solution could be that people build a construction [kit] out of household materials and their own cardboard. That could be a fun way to make an indie Labo game. Let’s see how well [these] Nintendo kits sell before diving into this.”

April 20 should be an interesting day for Nintendo. It could be utterly inconsequential or it could mark the beginning of a new long-term franchise. “Given how beloved Nintendo is and how much weight their name carries, I think [Labo] will do very well at launch,” Dunham said.

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