Credit Suisse Lifts Nintendo Rating to Outperform, Predicts 130 Million Switch Units Sold by 2022

[The_Liquid_Laser]

RolStoppable said:

The_Liquid_Laser said:

A few points:

1) The number prediction is more important than the precise wording.  English is not their first language, because they are a Swiss group, so we have to somewhat guess what the precise meaning of their wording is.  At the same time I haven't seen any other group making predictions in 2017 that are looking to be this accurate.  They could have said, instead, that it would sell like a handheld device and total 66m by 2022.  In that case they'd be basing it off 3DS sales and still be majorly lowballing.  The accuracy of the numbers is what matters.  Scientifically speaking, you don't prove something by being right, but you do disprove something by being wrong.  So, while we can't be sure that they had the right reasoning, we can be sure that all other analyst groups had the wrong reasoning.  This is the only group that has a possibility of using the right reasoning.  Given how rare a good Switch prediction from an analyst group is, they desire major credit for this prediction.

2) The typical handheld actually does peak during its fifth fiscal year.  It should be clear from the context they are talking about fiscal years.  (FY3/20-21 means the third quarter of the 20-21 fiscal year).  Here is the fiscal year that each Nintendo and Sony handheld peaked.

Gameboy 13
GBA 4
DS 5
3DS 3
PSP 5
PS Vita 2

The median of these numbers is 4.5.  The mean is 5.3.  The word typical implies median, but they could have also meant mean and the translation was imprecise.  Either way, both of these numbers round to 5.  It is especially understandable why they'd round the median up to 5, since Switch's first FY lasted less than a month.  And of course the peak sales quarter during any year is going to be the holiday quarter.

3) The hybrid vs. handheld dichotomy is not how anyone would have framed their reasoning in 2017.  Instead they would have based their prediction on past data.  Which data do they focus on?  Home or handheld?  If a person want to play games both at home and on the go, before the Switch, then what kind of device would they buy?

Say a person living in 2008 wanted to buy one device and they wanted to play games both at home and on the go.  Would they buy a Wii or DS?  They would buy a DS.  The Wii can't play games on the go.  The DS can play games both at home and on the go.  Sure you can't hook the DS up to a TV.  That makes Switch a better product than the DS.  That also makes hybrid Switch a better product than Switch Lite.  But a person can still play games on the DS at home if they want.  Therefore, the Switch and the DS perform the same basic function, but the Switch does it much better.  Both devices enable a person to play games anywhere.  But at home a person with a Switch gets a performance fairly similar to a PS4, and is much more convenient for local multiplayer.  The DS's performance never got anywhere close to a Wii or PS3, and you have to buy multiple devices for local multiplayer.  So they both do the same job, but the hybrid Switch does it much better. 

At any rate, the hybrid Switch performs the same function as a handheld.  You can play it anywhere.  That is why it makes sense to say it will sell like a handheld.  Clearly, they were bullish on the Switch even before they made this prediction.  They revised the peak year up from 25m to 31m.  They were trying to conclude if Switch would be a Wii-like success or a DS-like success and eventually concluded it would be a DS-like success.

Essentially, they were right on the money with this prediction, and the precision of the numbers shows it.  They were the only analyst group to be right about the level of Switch's success, and they were also more accurate than any individual on vgchartz.  I don't recall anyone here giving a precise number on Switch's sales for an exact and long time period like 6 years and being even remotely close.  In short, they are an actual reputable analyst group and they deserve credit.  They performed real analysis.  They are not a bunch of Michael Pachter's who have the title "analyst" while actually having a law degree, which is useless for data analysis.  When this specific of a prediction is this accurate, then it deserves credit, especially when most analysts are spewing garbage.

1. First off, do you have trouble to determine what I mean when I post on this site?

The reason why it's important to be right for the right reason(s) is that it greatly increases the likelihood to be right again. Sure, all other analysts were wrong and that's why they shouldn't be trusted with their future Nintendo predictions, but I wouldn't trust Credit Suisse much more despite them giving out a much better number.

2. 'Typical' refers to something that occurs for a clear majority of time. At best you get a 3 out of 6 off your list, so calling that the typical peak year is a stretch already.

By the way, the '3' in FY3/20 refers to the month of March, i.e. the fiscal year ending March 2020.

3. I'd give more credit to their prediction if there was something in there that showed an indisputable understanding of the console market. In the future I definitely won't say that Credit Suisse's latest prediction is gold because they were in the right ballpark with a number before.

You are referring to the mode.  The words "typical" and "average" are synonyms.  Either word can refer to the mean, median or mode.  It depends on the context.  I am used to people saying "typical" to refer to median, but after doing a search I found that "typical" is used for all of these words often enough.

Anyway, after re-reading the quote I realized they are in fact referring to the median.  When they say FY3/20-21 they are saying sales might peak during the 4th or 5th year, which means they are using the median of 4.5.  It's more clear if you look at the original report.
https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=em&document_id=1079801171&serialid=pwMYHIAoM%2bOiN6Sn2aeLEC%2fYdZsjMzeiXCJVhZTPgCQ%3d

I looked over the first few pages.  It's an interesting read.  The biggest mistake I can find is that they consider DS+3DS to be one family of systems with a really long sales curve.  In the end that is not going to throw their prediction off until they get to years 7+.  

I definitely give them credit for figuring out that it will sell like a handheld and a very successful one at that.  Most predictions I saw, either from analysts or from old posts on here, assume Switch is a home console and then conclude it will sell like the Wii U.  These analysts not only figured that Switch would attract the handheld market, but it would be a very successful handheld at that.  They definitely aren't perfect, but I have to give credit where credit is due.  Most people in 2017 were no where close to being right.