There are two main reasons why someone would expect Switch to slow down, first would be Nintendo shifting development resources to a different console and second being strong competition.
Total Hardware Per Year Japan / % for Market Leader
- Successor is announced and launches in the fall of 2022
- PlayStation 5 all of the sudden starts to catch on in the country
Both of these are unlikely, so we are looking at a third year in a row where Switch will achieve over 80% market share in terms of hardware and second year in a row it will achieve more than 90% of software sales. So we are likely to see another year with at minimum 5 million units sold, and even if a successor launches in 2023 we are still unlikely to see a huge drop in sales as it's more likely that Switch remains over 3 million units sold. So end of 2023 we would be looking at a minimum of 31 million units, so within touching distance of the DS/GBA.
The only time Hardware Sales in Japan dropped below 5.7 million was in 2016 - an year where the two games that managed to be surpass 1 million were on the 3DS a device which Nintendo was no longer supporting - Sun / Moon; Yo-kai 3 were Pokemon Co & Level 5 Games. Compare that to next year we have Splatoon 3 which is likely going the 2nd biggest launch on the Switch in Japan, Arceus which should be able to do Pokemon Lets Go numbers, Breath of the Wild sequel thats likely to be the fastest selling Zelda title in Japan and Kirby another potential game to surpass 1 million.
Nintendo also faces the least amount of competition since 1994. The anemic performance of PS5 software which is at a level of X360, with most logical explanation that units are being resold outside of Japan for a profit. With chip shortages expected to continue in 2023 if demand outside of Japan continues to make reselling PS5 profitable than the situation will continue to get worse for the PS ecosystem as PS4 continues its decline and is discontinued.
Finally there is the not so small matter of third party support:
Famitsu Switch 3rd Parties 2017-2020
- Minecraft (Microsoft) - 1.702.921
- Momotaro Dentetsu (Konami) - 1.233.023
- Dragon Quest XI S (Square Enix) - 592.940
- Taiko no Tatsujin: Drum 'n' Fun! (Bandai Namco) - 554.560
- Fishing Spirits (Bandai Namco) - 544.467
- Mario & Sonic at the Olympic Games (Sega) - 362.539
- Yo-kai Watch 4 (Level 5) - 358.356
- Monster Hunter Generations Ultimate* (Capcom) - 309.596
- Dragon Quest Builders 2 (Square Enix) - 308.893
- Hyrule Warriors: Age of Calamity (Koei Tecmo) - 304.963
- Super Bomberman R (Konami) - 275.029
- eBaseball Powerful Pro Baseball 2020 (Konami) - 269.648
- Jikkyou Powerful Pro Baseball (Konami) - 225.614
- Octopath Traveller (Square Enix) - 193.780
- Disney Tsum Tsum Festival (Bandai Namco) - 185.990
- Dragon Ball: Xenoverse 2 (Bandai Namco) - 181.090
- Story of Seasons: Friends of Mineral Town (Marvelous) - 164.944
- Puyo Puyo Tetris S (Sega) - 154.573
- Super Dragon Ball Heroes: World Mission (Bandai Namco) - 145.720
- Fitness Boxing (Imagineer) - 141.889
- One Piece: Pirate Warriors 4 (Bandai Namco) - 137.513
- FIFA 18 (EA) - 122.998
- Derby Stallion (Game Addict) - 117.995
- Trials of Mana (Square Enix) - 112.277
- Doraemon: Story of Seasons (Bandai Namco) - 112.104
- Pro Baseball Famista Evolution (Bandai Namco) - 110.954
- The Snack World: TreJarers Gold (Level 5) - 109.955
- Fortnite (Warner) - 103.130
- Hatsune Miku: Project Diva MegaMix (Sega) - 97.056
- Dragon Ball FighterZ (Bandai Namco) - 92.697
TOTAL: 9.327.214
Famitsu Switch 3rd Parties 2021 Top 30(Known Sales):
- Monster Hunter Rise (Capcom) - 2.326.057
- Momotaro Dentetsu (Konami) - 1.164.181
- Minecraft (Microsoft) - 540.198
- Story of Seasons: Pioneers of Olive Town (Marvelous) – 281.140
- Monster Hunter Stories 2 (Capcom) - 227.554
- Baseball Spirits 2021 (Konami) - 195.906
- Crayon Shin-Chan (Neos) - 183.733
- Bravely Default II (Square Enix) – 136.091
- Rune Factory 5 (Marvelous) - 127.968
- Yu-Gi-Oh! Rush Duel (Konami) - 127.221
- Dragon Quest XI S (Square Enix) - 115.610
- Fitness Boxing 2 (Imagineer) - 115.375
- Tsukihime (Aniplex) - 89.916
- Human Fall Flat (Teyon Japan) - 85.310
- Little Nightmares II (Bandai Namco) - 72.796
- Taiko no Tatsujin: Drum 'n' Fun! (Bandai Namco) - 70.964
- Fishing Spirits (Bandai Namco) - 68.180
- Sakuna: Of Rice and Ruin (Marvelous) - 65.620
- Dragon Ball Z: Kakarot (Bandai Namco) - 64.247
- Hyrule Warriors: Age of Calamity (Koei Tecmo) - 62.119
- Samurai Warriors 5 (Koei Tecmo) - 61.350
- Minecraft Dungeons (Microsoft) - 59.256
- Mario & Sonic at the Olympic Games (Sega) - 40.688
- Puyo Puyo Tetris 2 (Sega) - 36.105
- Family Trainer (Bandai Namco) - 35.273
- Densha de Go!! (Square Enix) - 29.624
- Apex Legends: Champion Edition (Electronic Arts) - 29.057
- eBaseball Powerful Pro Baseball 2020 (Konami) - 27.539
- Disgaea 6: Defiance of Destiny (Nippon Ichi) - 25.744
- Jack Jeanne (Broccoli) - 25.518
TOTAL: 6.489.876
Its very likely that in 2021 third party games can end up very close to what they achieved for the previous four years; their support will continue to accelerate in 2022. In the past it was this third party support that enabled PSP, PS2 to be very successful and have a huge quantity of exclusive titles coming out every week. Now with the PS5 failing to even match X360 numbers, what exactly options do most third party publishers out of Japan have? The growth in software market share Nintendo has been able to achieve on the Switch at the PS4/PS5's expense is already started to be felt. This year in the Top 50 of third party games over 80% will end up on the Switch; last year it was around 50%.
All these factors combined put the Switch in a very unprecedented position compared to prior consoles in Japan.
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