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javi741 on 13 March 2023
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Soundwave said:
javi741 said:

2025 is still certainly possible. People keep comparing the Switch to previous Nintendo consoles when it comes to their lifespan and release. However, the problem with that is that the Switch is a major anomaly compared to the previous Nintendo consoles. The Switch is the most profitable console of all time with software that's selling far better than any previous Nintendo console, so the lifecycle pattern that we've seen with previous Nintendo systems may not apply to the Switch.

While yes sales are dropping for the Switch, the profits are still extremely good for Nintendo and when we compare this fiscal year's profits for Nintendo to the DS's 6th year, FY ending 2023 would have an operating profit of 3.55B compared to 1.5B for the FY ending 2011. Profits for the switch's 6th year are 137% higher than the DS's 6th year. Also, Nintendo this fiscal year would see a 24% drop YOY in operating profit compared to the DS which saw a 52% drop YOY. So Nintendo has much less of a reason to panic and release a successor early this time around like the DS.

Releasing a new console should never be done in a state of panic to begin with, if you let your business collapse or decline that sharply that you desperately need a new console, your management has fucked up royally to begin with. 

Like Sony was also making large profits with the PS4 right up until it's final year, but they still went ahead with PS5 because they know every generation has to end at some point. 

This whole obsession with "milk a console dry to the bone to the point where you're in a really dire state of decline" is not really something that should be applauded. It's a stupid strategy. Your existing console should be in a state of gentle, natural decline when its replaced (like PS4 was for example, like Super NES was), not in a "holy shit, this thing is totally cratering" type of thing. 

Especially when it's your only console and you don't have a secondary hardware line any longer to bounce back off of. 

Once your console is past 5 1/2 years old and starting to show YoY declines in the 20-30% YoY range it's probably a not very subtle sign that it's time to start moving ahead with the generational transition, that's not a situation that's going to magically get better for you the longer you wait, it's more probable to only get worse.

Dropping a system earlier just for marginally falling profits may not always be the best thing, the Switch successor could easily be less profitable than sticking with current hardware if you release the successor too early. Nintendo dropped the Wii & DS pretty early in favor of the Wii U & 3DS which of course led to their first loss in over 30 years.

Nintendo wouldn't want to risk losing easy great, more-certain profit with their current hardware in order to drop the successor which is way more uncertain if it can produce profits as high, the Switch still this fiscal year would produce 3.55B in profit.

Nintendo also isn't in any sort of rush like the previous generation to release the Switch successor, they have no competitors who could steal their marketshare unlike with the DS & Wii where the DS had to compete with the upcoming PS Vita as well as smartphone games which were forecasted to kill the handheld gaming market. With the Wii, Sony & Microsoft already stole one of the main appeals the Wii had with the Kinect & PS Move which is part of the reason why Nintendo felt forced to drop the Wii earlier despite being a massive success. Switch isn't in any of those scenarios.

Sony would still release the PS5 despite the PS4 being profitable because Xbox is still a major competitor to them and they can't afford giving MS a headstart in the generation, nothing is threatening the Switch right now for Nintendo to be in a rush.

Last edited by javi741 - on 13 March 2023