The Road to 160m+ for Nintendo Switch

[javi741]

Soundwave said:

javi741 said:

The difference between the PS4 and the Switch is that the PS4 had a legitimate competitor it needed to keep up with, which is Xbox. PS4 was selling fine but Sony didn't want to have their marketshare slip away by allowing Microsoft to get a headstart for the 9th generation. Sony didn't want to risk looking like the platform with inferior games & graphics compared to Xbox and PC just cause they wanted to stick with the PS4. The primary reason the console manufacturers release successors is not because it's necessarily more profitable to upgrade, but to keep up with their competitors in terms of the quality and performance of software produced to maintain interest in the brand.

I'm sure most companies would prefer to stick to making software for older hardware with a large install base indefinitely since they won't need to spend millions of dollars and years of work to create a new console and create a large install base from scratch, and launching a new console always brings unknown risks. 

However, console companies don't do that cause their competitors are always trying to one-up them when it comes to game quality and performance and they don't want to allow their marketshare slip due to looking outdated. This is why the PS5 released even though the PS4 was doing well because they didn't wanna allow Xbox or PC to steal their marketshare just cause Sony refused to upgrade.

Nintendo is not in Sony's situation, they have a monopoly in their own hybrid console sector they created. The release of the PS5 and Series X didnt stop people from buying the Switch like crazy, and there's no legit competitor in the handheld space and nothing looks like it could come close to competing with the Switch. This also Nintendo's 2nd biggest install base they've ever had and easily the most profitable when it comes to software sales, so I'm sure Nintendo would be ok to keep the Switch alive and their primary system for several years as long as the software sales are there, which will be due to Switch's large install base.

Yea hardware sales are dropping for the Switch but Nintendo makes most of their profit on software, so smaller hardware sales won't be a major detriment to their business as long as the software sales are there. Nintendo has no competitors to keep up with for them to release a successor anytime soon. They'd likely for now rather take advantage of the Switch's large install base and remain profitable off the software sales instead of risking releasing a new platform that's far from guaranteed to be as successful.This is what Nintendo did with the 1989 Gameboy, although it was super underpowered even going into the late-90s. Nintendo still didn't release a successor cause they had a huge monopoly on the handheld market and would've rather just stick to their current hardware.

Yes I get that consoles and manufacturing chips takes years and needs to be done years in advanced before they release the console, but that doesn't mean that just cause Nintendo is finishing up their system behind the scenes that they have to release it as soon as its finished. I'm sure Nintendo already has a good idea of what the successor will be like at this time, but they could easily just sit on the idea indefinitely until they feel it's right to release the successor.

Well a few things, software sales for the Switch are dropping too, it's not just hardware sales that are falling. 

The other thing I think that doesn't get talked about is that userbase isn't like some rock solid population that doesn't wane either. There may well be people who bought a Switch say 6 years ago who are kinda done with the system and moving on to spending more of their money on say that new PS5 they purchased or any number of other entertainment options. So even if you have say a "userbase of 120 million" ... it doesn't actually mean you effectively have that if you stretch a system's product cycle way past 6-7 years. You start to lose people at the top for example or maybe they will buy a Zelda event level game but take a pass on being active in buying software throughout the year. 

Nintendo has to pay for hardware, the hardware can't just be completed and then they can sit on it indefinitely and not pay Nvidia, I'm sure Nvidia expects to be paid. You'd also have to book your window with TSMC or Samsung or whoever to get supply lines, and if you just cancel those there is likely a penalty because you're fucking them over by telling you'd have product there and then pulling out. Production space is extremely valuable. 

I don't think it's as simple as you think it is. 

Beyond that, even for people who want to cling to 2025 or whatever ... OK, but game development now takes 2 1/2-3 years ... that means as of 2022 (which we're already well past) just to make a 2025 launch, Nintendo would have to start phasing down development of Switch 1 software to focus on Switch 2 software to have anything ready even for 2025. 

Now that ToTK has wrapped, really all of Nintendo's major studios should be working on Switch 2 content. Like today, now, I'm not talking about 1 year into the future. Really by this point they should be well into development for Switch 2 software like more than a year into development for things like the next Mario Kart. 

Software sales are only down 4% this fiscal year compared to last fiscal year, that's so miniscule to the point where it's not even worth bringing up to show that there's declining interest in the brand, the 4% drop could've easily been erased had Nintendo released one more solid game. A 4% drop in software sales shouldn't at all indicate people are losing interest in the brand.

There hasn't been any indication yet that people who purchased the Switch 6 years ago are starting to lose interest or move on from the Switch. If that were the case we'd see more than a 4% decline in software sales at this point.

The idea that people will get tired of the Switch just cause it's outdated is greatly exaggerated, TOTK looking similiar graphically to BOTW isn't stopping people from being massively hyped for the game. Many people actually believe TOTK will outsell BOTW in lifetime sales, it doesn't seem like people are losing interest in the Switch at all if that's the case. Nintendo this past quarter just released their fastest selling game in their history with Pokemon S&V. 

Many gamers are content with owning the same system for 10+ years at times and still paying their yearly sequels to COD games that haven't changed much graphically on the same platform. Yes eventually gamers will want a better graphical experience, but it's not the end of the world if the option isn't there as long as the games are there. We see Microsoft and Sony upgrade their systems to keep up with the competition, Nintendo doesn't have competition right now so they aren't as much of a rush to release their successor as quickly. Declining hardware sales won't hurt the core of their business which is software sales.

Nintendo is not immediately shift their studios straight to Switch 2 permanently, even if if were to be releasing in 2024(But I'm thinking 2025 or later). Nintendo will likely want to keep the Switch around for several more years as a safety net in case the Switch 2 doesn't do as well. So major studios will likely continue to work on the Switch and the Switch 2 for right now,