July NPD 2020: Switch 340K, PS4 150K, XB1 17k (rip)

[Bofferbrauer2]

Shadow1980 said:

Ryng said:

You should realize the only reasons Switch numbers are not much higher is because there are stock ussue. And mostly you are givin too much credit to COVID and Ignoring others factors for Switch being up YOY. Expecting Switch to be down YOY by ~1 million in the second half of the year is unrealistic.

7.5 million should be the floor, not the most optimist scenario.

I disagree. I believe the COVID bump is the primary factor in play with the observed YoY gains. While stock is an issue, I think the greater issue is dwindling amounts of money in people's bank accounts to spend on consoles. People got an extra windfall from the $1200 stimulus checks. Assuming they weren't out of a job because of COVID-19 and could afford to spend those checks on non-necessities, I imagine most of them have spent that money.

Let's look at YoY changes in hardware sales so far this year:

The Animal Crossing bump in March is obvious (the PS4 & XBO also saw modest bumps that month, but that could just be statistical noise and/or delayed tax refund spending). Then we saw an across-the-board jump in console sales in April when the stimulus checks first started to arrive. The Switch bump was a bit higher than those of the PS4 & XBO, but not massively so, showing a possible residual effect of AC (though again it could just be statistical noise, or even a consequence of lowered general demand for the PS4 & XBO given their age). It is obvious that the major factor in play for April was the arrival of stimulus checks and ensuing spending spree, the "COVID bump." The PS4 & XBO dropped off quicker than the Switch after April, likely due to being older systems nearing replacement by next-gen systems and thus less stock and general lower demand. But all systems have been on a downward trend in YoY sales since May. That to me seems to be indicative of overall decreased spending on big-ticket items as the population burns through their stimulus checks, not merely a stock issue.

The YoY gains seen in April were not sustainable over a multi-month period. Animal Crossing was the only other stimulative factor for the Switch, but no game has ever produced significant multi-month increases in hardware sales in the U.S. aside from Final Fantasy VII on the PS1, and that was an unusual circumstance. The only other stimulative factor in play was the stimulus checks. The realities of the impact of software on hardware sales in the U.S. (always very short-term except for one historical anomaly) combined with the undeniable effects of the stimulus checks indicates that the latter is the primary cause of the YoY gains seen since April (and almost certainly sole cause since May).

Moving on to 2020 sales as a whole for the Switch, upon further evaluation, you're right that 7.5M should be the floor. 6.5M is indeed too pessimistic, and an error on my part (I looked at the wrong data point when punching numbers into my calculator). 6.5M would be flat from 2019. I had intended to add the YoY surplus of the March-July period with last year's sales as an upper limit. 6.5M would require significant YoY drops (nearly 40%) for the Aug.-Dec. period, and even 7M would be improbable. Assuming the Switch is flat YoY for the Aug.-Dec. period, that would yield approximately 8.25M. So, we should actually see something more like somewhere in the 7.5-8.5M range.

But I think 8.5M is an absolute upper limit, and 7.5-8M is more probable, because I doubt we'll see overall growth for the Aug.-Dec. period. The reason why I think that is because of what the Switch is facing later this year. The Switch experienced some YoY growth last year from the Lite. It produced, perhaps also in conjunction with Pokemon S&S over the holidays, a 15.5% increase over the same 4-month period in 2018. With the way the Switch is declining, it most certainly could experience the necessary 16.78% drop in the last five months of the year needed to reach only 7.5M. Unless there's some major stimulative factor at play later in the year, I think 7.5-8M is the more probable end of the range. If the observed declines in YoY growth cease in the August NPD figures, I will be willing to reevaluate this assessment, but based on what we're currently observing, I think at minimum we'll see non-trivial YoY declines in the Sept.-Dec. period that will erode at least some of the YTD gains.

I think you're severely underestimating AC effect here. You seem to think it only pushed March sales while it has pushed up the baseline of the Switch and Nintendo is struggling to keep producing enough consoles, and that's simply not just due to Corona.