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aTokenYeti on 30 January 2022
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The_Liquid_Laser said:

Mnementh said:

I think there is growth possible, and I can explain why. A reason why often the numbers of XBox+Playstation are added for these gens - and not Nintendo - is because Sony and MS are basically carrying out the same strategy and targeting the same market for over a decade. Nintendo instead was trying out different stuff, targeting different customers. There success varied based on the customers they targeted.

This gen a few things change. First of all, even a classic strategy may see growth, as more regions get wealthier and tech gets cheaper, so more regions may be stronger into buying luxury products like games. The overall customer base is growing. I see that happening mostly in Asia, but also south america. The second reason is, that MS changed their strategy. They target Gamepass now, and that may allow them to find new customers, even in classic market regions. I am not sure though how much of them convert to Xbox, or if most of them stick to PC or streaming.

What you are saying sounds reasonable.  And, if Nintendo has no effect on PS+XBox, then I would agree that Gamepass is the kind of strategy that could grow the market (and so would expanding into new territories).

However, I do not accept this idea that Nintendo is targeting a completely different set of customers.  The Switch is going to be Nintendo's most successful system of all time.  It will be their #1 system when it comes to profits and total software sold, and on hardware it will be either #1 or #2.  It is clearly reaching a lot of customers that it did not reach a generation ago with 3DS + Wii U.  Are 100% of these customers brand new to console gaming? 

A person can look at Japan and see that this is definitely not true.  Nintendo has taken over the whole country's video game market.  Switch is clearly competing with Playstation in Japan.  Likewise, other Eastern markets have similar tastes to Japan (China, S. Korean, Taiwan, etc...).  It is foolish to think that Switch isn't competing with Playstation in these regions.  A person can look at the top 5 charts from S. Korea and Taiwan and see Switch games dominate for most weeks.  The idea that Switch is not competing with PS + XBox is clearly wrong.  Furthermore, if Switch is competing with Playstation in Japan, then the most reasonable conclusion is that it competes with Playstation in every region.

In the Americas and Europe, Switch is also very popular.  It will not take over the entire market like it did in Japan, but it will take a % of the market in these regions.  Switch's popularity cannot be denied.  And this belief does not make sense, "Switch competes 100% with Playstation in Japan, but 0% in every other region."  Switch competes with XBox and Playstation in other regioins too, it's just not an overwhelming victory like it is in Japan.  However, Switch is definitely gaining ground in other regions, and that is why it is reasonable to think it will eat into XBox + PS totals in these regions too. 

The Switch's new customers come from Playstation.  That is where they came from in Japan.  That is where they are coming from in other regions too.  It's not quite obvious yet, because these early PS5 sales appeal to the top of the market, the people willing to spend the most money on gaming.  The top of the market always buys new consoles first.  Once Playstation gets to the point where it would sell to the middle and low ends of the market, it will be obvious that Gen 9 sales are going to be down for PS + XBox.  In fact, even in Japan PS5 hardware seems to be selling ok, even though software sales are abysmally low.  We can expect that PS5 hardware sales cannot continue to do well in Japan.  We should also expect PS + XBox sales to fall short in the rest of the world.  It will probably take a couple more years for this to be clearly seen in the data though.

The software libraries are so radically different that I just don’t think the switch is taking away customers from PlayStation (or Xbox or PC, for that matter) anywhere outside of Japan. If you are at all interested in yearly AAA releases the switch is a completely non viable option for you. If you are interested in online multiplayer the switch is also similar severely disadvantaged. 

People in the west in particular are almost entirely buying switches in addition to another games console, not in place of another game console