Calendar 2023 is a highly probable year for Nintendo to release new hardware. As the current hardware cycle winds down, revenue and profitability has passed the edge of a crater. In April 2023, the beginning of the 2024 fiscal year, the Switch will be in its seventh year. Hardware sales are on the decline and software trends follow about a year behind. The best way to reverse or mitigate the plunge in 2023 is to release new hardware. That way FY2024 could conceivably hit above 20 million, perhaps even exceeding the current year (FY2023).
They need something to stop the cratering. If the economy functioned on 5-10 year cycles, then having these large craters would matter about as much as a fiscal quarter rev decline. Unfortunately, that’s not the case. When Wii and DS went down near simultaneously, it was seen as disastrous by many shareholders in the company and the media at large—when the reality is Nintendo just had both their hardware lines peak and decline around the same time. On a five+ year cycle, the rev and profitability trends will look much more regular. Now, don’t get me wrong, I think shareholders are dumb as hell (as most of investors don’t understand the nature of the businesses they’re investing in because they only care about fiscal reports), but the reality we live in is if they let the Switch sink before releasing new hardware, that would be seen as a disaster.
In the past, Nintendo staggered its hardware releases between handheld and home console. This would allow them to wind down and end generations without massive craters (minus the end of DS/Wii). They’ve also done two in the same form factor before with the GBA and DS, NES and SNES. With the DS launching early enough through GBA without killing GBA support beforehand, they avoided a serious crater from declining handheld sales and years of pallid home console sales before the Wii was ready. So Switch 2 in Spring/Summer 2023 wouldn’t be unprecedented, and would be a practice Nintendo has made work brilliantly in the past.
As a customer, it would make 2023 an exciting one. Nintendo has earned a lot of faith this generation. They released three killer apps on the Switch alone with Breath of the Wild, Mario Kart 8D, and Animal Crossing NH. Since Nintendo successfully sold the market on the hybrid concept, they can winch with other form factors, like a Switch TV (home console). Mid-range hardware seems an obvious choice in the current economic climate. Why not a handheld? Home consoles generally boost word of mouth sales more rapidly than handhelds—friends and family playing local multiplayer.
Lastly, I think it would be foolish to dump Switch 1 in the way past Nintendo consoles have been dumped at the generation’s end. Nintendo should keep pushing Switch 1 as hard as possible with as much software as possible being dual releases in 2023. This will keep people confident that a Switch 1 purchase in 2023 is a good investment. Support of Switch 1 won’t hurt Switch 2, either as there will be more than enough who want the premium experience. Dual software is superior, as splitting the software lines just means less on one or both platforms, and will cause Switch 1 to decline much faster.
So that’s what I think it likely in Calendar 2023:
+ New Switch 2 hybrid console at ~55K yen/400 USD/EURO. (Maybe 60K and 430).
+ High chance of a secondary budget Switch 2 TV home console ~45K yen 350 USD/EURO.
+ Switch 1 is still strongly supported through the year. Continue without price drop at 38K yen 300 USD/EURO.
Sales numbers, still predicting millions :)
I describe myself as a little dose of toxic masculinity.
