Splatoon couldn't carry the Wii U alone, it helped the baseline for 6 months. You need 2-3 games like that per year to turn things around for something like the Wii U or PS5. Nintendo were in a better position to consolidate their handheld and console line-up to a single device, while Sony didn't really have a handheld lineup to consolidate to the PS4/PS5. Outside of a few games PSV didn't have as many 1st Party games as the Wii U, that never realized their potential.
For the PS5 it's price, size and lineup for the next 12 months is what makes it unattractive to the audience in Japan. It really is understandable to write it off, even when stock arrives - how many weeks do you realistically it takes before sales return to 10K baseline? Without games that appeal to the the market - the writing is on the wall.
Sure there is going to be a a dozen games in development by Japanese 3rd Parties for the PS5, but if they are supposed to achieve over 50% of their sales in Asia - you gotta wonder how much would having them be exclusive to the PS5 would cost you long term. Not just for the Japanese market but also South Korea, Taiwan, China, Singapore, soon Thailand etc. PS5 isn't going to be easy to purchase in some part of Asia until 2022. Without a PC version at the very least any exclusive is risky for Japanese 3rd Parties.
The next two years will have long term impacts on future projects and what projects get green-lighted - lets say that the next AAA Square launches fails to meet their expectations, this immediately impacts their planning going forward. In such huge companies a giant game like Avengers bombing impacts a lot of future plans, two games like this under performing and you are doing a 180 on your entire strategy. Also no 3rd Party in Japan can really ignore the opportunities Asia provides for growth and most of east Asia is following a similar path to Japan. Last year Switch made up 70% of hardware sales in South Korea & Taiwan slightly behind the result of Japan where Switch had 75% market share.
We know that Other grew by 150% in the past quarter, a lot of that was driven by China, South Korea & Thailand and these countries were specifically mentioned by Furukawa in their last QA. I imagine holiday Quarter will enjoy similar growth, especially knowing that Ring Fit continues to get abundant stock to these three countries. After all this is new, as the Wii really didn't become all that popular in Asia and even in Japan it was only slightly more successful than the PS3.
Looking at growth in regional sales compared to the same period of the previous fiscal year, we see that whereas sales grew by 67% in Japan, 61% in the Americas and 72% in Europe, sales for the "other" region grew by a huge 152%.
We hear from Tencent that, in mainland China, Ring Fit Adventure got off to a great start when it was released by them on September 3 and it continues to sell well. In some cases, Ring Fit Adventure is driving sales of the Nintendo Switch hardware.
Sales in the Asia region excluding Japan were 6.7 times higher in the fiscal year ended March 2020 compared to the year ended March 2017, when Nintendo Switch was launched. At the time of the Nintendo Switch launch, it was only available in the "other" regions of Hong Kong, Singapore and parts of the Middle East. Since then, the sales regions have broadened to include South Korea, Taiwan, mainland China (sales by Tencent) and other parts of Southeast Asia. In looking at how our sales in the Asia region have grown to be a larger part of our business, we are now able to release many Nintendo titles at the same time they debut in the major markets of Japan, the U.S. and Europe, as we have been trying to more efficiently localize our software with more languages in accordance with the increasing sales in regions such as South Korea and Taiwan.
https://www.nintendo.co.jp/ir/pdf/2020/201106e.pdf
Ring Fit continues to be #1 physical game in South Korea & Taiwan, with New Horizon usually coming right behind it.
Nintendo is also continuing to enter new markets, as Thailand is seemingly the next market to gain an official launch following Brazil earlier in the year. This accelerates the situation in Japan since 3rd Parties now see two potential areas for growth, while limiting the risks. Sakuna, Momotaro, eBaseball, Bravely Default 2, Monster Hunter Rise, Olive Town, SMT V, Rune Factory 5 are no-brainers and present little risk to the companies making them, while a game of the scope of FFXVI is at risk precisely because of it's budget and the fact that it needs to compete on very expensive media markets like NA & Europe for mind-share.
Sony would basically need to reveal real megatons for the next 12 months to turn things around.
Last edited by noshten - on 28 December 2020
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