Why Switch could be Nintendo's second most successful generation ever, based on software sales.

[The_Liquid_Laser]

Switch will very likely have the second best software sales of any generation behind Wii + DS.  However, the title also says, "second most successful generation ever".  It is actually possible that the Switch will be Nintendo's most profitable generation ever.

Think of it this way.  PS4 is not going to sell the same hardware as PS2, but PS4 is actually a lot more profitable than PS2.  Why?  Several factors.  1) Fewer price cuts to hardware.  2) Higher price point on physical software.  3) Digital only sales (including DLC).  4) Online subscriptions.

Switch actually has all of these advantages over both the DS and Wii.  When it comes to price point of software DS was typically $30 while Switch games are typically $60.  Also Switch has another advantage which is tie ratio.  Home consoles have a higher tie ratio than handhelds, which was apparent when comparing DS to Wii.  However Switch will likely have an even higher tie ratio than the Wii, because core gamers tend to buy more games.  Switch sales aren't targeted to new gamers like the Wii Sports and Wii Fit games.  Switch sales are targeted towards core gamers, so they are going to buy more games on average compared to Wii gamers.

We know that DS and Wii had some amazing profit numbers, but Switch's most profitable years are still to come.  Peak profits tend to come a couple of years or so after peak hardware sales.  Nintendo just posted some very impressive profits for the past fiscal year, but that is still small compared to what is about to come.  Switch could very well be Nintendo's most profitable generation.

Last edited by The_Liquid_Laser - on 24 May 2020