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So... Will Nintendo be able to ship those 20 million Switch units?

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Jumpin said:

I'm going to knock this one out at the premise on which your whole argument sits.

For your post to be of any contradiction against mine, you'd have to demonstrate that the demand isn't there.

The Switch is selling quite well, and with an already healthy 2019 lineup announced with headlines like Pokemon coming up in 2019, there is no reason to think that consumer demand won't continue to be there, and high; and it's evident for any retail chains that this is the case.

Well, I can't demonstrate that the demand isn't there, because the sales figures for December 2018 have yet to be finalized by every tracker on this planet. All I can do is extrapolate from the figures we do have and it's not looking like Switch will sell through 11m+ in Q3 of this fiscal year. It needs such high sales, because otherwise Q4 will see a correction in the form of lower shipments in case that NIntendo ships 11m+ units in Q3. If Nintendo doesn't manage to ship 11m+ in Q3 (again, because retailers aren't placing orders for that many units), then Q4 will need shipments of 4m+ which would be a significant year over year increase. We have yet to learn the full release schedule for Q4, but it's doubtful that there will be any huge hardware movers added to the already known NSMBU Deluxe.

Mbolibombo said:

Which is the quarter in question -  Q3 - holiday season, manufacturing is the only thing stoping Nintendo from not shipping intended consoles in Q3. And as I said Nintendo didnt lower their forecast before Q3 since they believed in their forecast, they have talks with retailers all year about their expectations, they're not going in blind with their own forecast. Clearly both Nintendo and retailers, had faith in what could be sold during the holidays and after which we see now is indeed happening.

As for the second bolded part, clearly you want to be prepared.  Dont want to be left hanging in the most important shopping period all year, if it piles you calibrate next quarter however it fits, there were 2 big games in January and February that year for Sony that they clearly were expecting to sell hardware and late shipments in Q3 clearly were intended for. Nintendo has a big game releasing early January that will likely push some hardware which will also need to be shipped in Q3. 

Nintendo sticking to their forecast does not give any indication for retailer expectations, so you can't take it for granted that retailers have agreed to buy that many units from Nintendo. Five years ago Nintendo stuck with their 9m forecast for Wii U before the holiday season, so that's a good example that there's no link between Nintendo forecasts and retailer expectations/agreements; said forecast had to be lowered to 2.8m during the following financial report, so Nintendo's belief from three months earlier was not even remotely in the realms of possibility. Nintendo won't be that far off with Switch, but them sticking with their forecast doesn't provide any sort of guarantee other than they have no manufacturing problems. Nintendo still needs retailers to buy those units though.

In the case of the PS4, Q4 has been repeatedly weak because the preceding holiday quarter had retailers overestimate demand for the PS4. Remember, ultimately it's the retailers that dictate the size of shipments.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

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Fight-the-Streets said:
What is the average ratio of sell through vs. shipment of successful consoles over the last few generations?

Ratio is a nonsensical metric.

The general rule of thumb for retailers is to have stock for the next 6-8 weeks in order to not run out of consoles in case of sudden unexpected surges in demand. This holds true for all consoles, so the weekly sales rate determines how many consoles are in the channel. In the case of a successful console, there is a gap of around 2m between sell-through and shipments whereas a moderately successful console would have a gap of around 1m and a failure 500k or less.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

RolStoppable said:

Mbolibombo said:

Which is the quarter in question -  Q3 - holiday season, manufacturing is the only thing stoping Nintendo from not shipping intended consoles in Q3. And as I said Nintendo didnt lower their forecast before Q3 since they believed in their forecast, they have talks with retailers all year about their expectations, they're not going in blind with their own forecast. Clearly both Nintendo and retailers, had faith in what could be sold during the holidays and after which we see now is indeed happening.

As for the second bolded part, clearly you want to be prepared.  Dont want to be left hanging in the most important shopping period all year, if it piles you calibrate next quarter however it fits, there were 2 big games in January and February that year for Sony that they clearly were expecting to sell hardware and late shipments in Q3 clearly were intended for. Nintendo has a big game releasing early January that will likely push some hardware which will also need to be shipped in Q3. 

Nintendo sticking to their forecast does not give any indication for retailer expectations, so you can't take it for granted that retailers have agreed to buy that many units from Nintendo. Five years ago Nintendo stuck with their 9m forecast for Wii U before the holiday season, so that's a good example that there's no link between Nintendo forecasts and retailer expectations/agreements; said forecast had to be lowered to 2.8m during the following financial report, so Nintendo's belief from three months earlier was not even remotely in the realms of possibility. Nintendo won't be that far off with Switch, but them sticking with their forecast doesn't provide any sort of guarantee other than they have no manufacturing problems. Nintendo still needs retailers to buy those units though.

In the case of the PS4, Q4 has been repeatedly weak because the preceding holiday quarter had retailers overestimate demand for the PS4. Remember, ultimately it's the retailers that dictate the size of shipments.

The Wii U situation is not at all the same is the current one though so comparing it doesnt really make much sense. Nintendo had already cut the forecast the previous in the Wii U lifespan at that point and with a much lesser software lineup to boot so there's also difference from this time around. Heck Nintendo even had to buy back some of their stock I believe. Much better to look at other succesful platforms like the Wii and DS. Sticking to a forecast is never a guarantee of anything, just that they still believe it's possible. And clearly, retailers holds Nintendo stricter this time around after rough times with the Wii U and hard times to start the life of the 3DS. 

But yes, ultimately it's the retailers that dictate the shipments. But that's never been a question. I dont really think we're in a big disagreement here really, just different approaches.



I rethought the situation and I came to the conclusion that 20 mil. will be reached. To sell-through 9 mil. in Q3 is actually thinking moderately (most probably it will be closer to 10 mil.). If they sell-through 9 mil. it means the shipment will be around 11 mil. Regarding Q4 I think the following: Q2 (July to September) had no big releases (Mario Tennis Aces is actually a Q1 release, sold well so far but isn't really a system-seller, Octopath Traveler sold well too but isn't really a system-seller as well (except in Japan where it helped to sell systems), Captain Toad: Treasure Tracker is definitely not a system-seller) yet over 3 mil. units were shipped.

Q4 with the hype of Super Smash Bros. Ultimate and Pokémon Let's Go plus New Super Mario U Deluxe will definitely be stronger than Q2. I think 4 mil. shipment is a given.

Therefore, the grand total of shipment will be as follow: 11 mil. in Q3, 4 mil. in Q4  plus the 5.07 mil. of the first half year = 20.07 mil. in fiscal year.

Last edited by Fight-the-Streets - on 06 January 2019

My father don't give a shit about video games or video games market. But he was slightly interested since I have bought for 3300€ of Nintendo shares when the Francfort value was around 231-232€.
I told him that since launch and less than 2 years later, they had not made any official price cut on the Switch. He said that this was a proof that they are sure to reach their goal. OR at least in a range of -5% which means 19M and would be considered as a success.



Current FY2018 prediction for ship. Switch : 17,96M

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I know it’s purely anecdotal, but I’m in Canada and it seems that at the store level, Wal-Mart and EB Games are out of stock of both Smash and Switch. Knowing how EB Games work from the inside, I pretty much expect the shipments to be bigger in January than normally, I mean that normally we had enough supplies after the holidays for a few weeks without needing any replenishments.



With the latest NPD figures, vgc estimates the Switch has sold at total of ~14M units. With no big releases on the horizon it's safe to rule out that the Switch will ship another ~6M units this quarter ...



fatslob-:O said:
With the latest NPD figures, vgc estimates the Switch has sold at total of ~14M units. With no big releases on the horizon it's safe to rule out that the Switch will ship another ~6M units this quarter ...

VGC had to increase the numbers several times. While we know several countries now, it's still possible that Switch is undertracked

However, even if the console is undertracked, reaching those 20M is almost impossible by now, though 18-19M are still in the real of possible.



fatslob-:O said:
With the latest NPD figures, vgc estimates the Switch has sold at total of ~14M units. With no big releases on the horizon it's safe to rule out that the Switch will ship another ~6M units this quarter ...

 

VGC under tracks the switch so it may be 14.5-15 M units sold.

Shipped is usually 1M or 1.5M on shelves so it brings the total shipped as os of end of 2018 to 15.5M at least and 16.5M at best.

With that said i think 19.0M is a safe bet but i can still see the 20M happening



Bofferbrauer2 said:

VGC had to increase the numbers several times. While we know several countries now, it's still possible that Switch is undertracked

However, even if the console is undertracked, reaching those 20M is almost impossible by now, though 18-19M are still in the real of possible.

That prospect seems unlikely by a wide margin considering vgc also adjusted the figures up for the other territories as well in conjunction with the NPD numbers ...