Switch 2 2024 first party lineup

[Shadow1980]

NintendoPie said:

i actually do understand your first point. that has clearly served them well this entire generation and will continue to do so. however, even with the switch still doing well, they have to release a new console sooner rather than later to stave off the decrease in sales. even if the switch went from (for instance) 20 million, then 15, then 10 - it's still decreasing. investors and the market as a whole see the decrease, be it expected from nintendo or us on a forum, as a bad thing, which will only decrease nintendo's stance among their investors. 

i'm not saying switch needs to be replaced because it's doing bad. in fact, i think it's better for them to use the leverage you are mentioning in order to launch into a new console with this momentum and in order to keep their investors happy. (which is the mission statement of any publicly traded company.)

That's what I was saying. The longer they wait, the bigger the trough at the transition between the two systems.

Nintendo is a publicly-traded for-profit corporation. They're not in this for bragging rights. They're in this to maximize profits. Sure, Nintendo could keep stretching things out to squeeze as much as humanly possible out of the Switch, and I'm sure some people that aren't Nintendo shareholders would like to see them do just that. If they did wait until 2025, the Switch could possibly hit the 160M mark, which, even if it falls a bit short of that, would still set a new record a lot of fans were hoping for. But it'd be a bad business move to wait any longer than necessary. A notable user over on IB said "Nintendo's business cycle necessitates a 2024 Switch 2 launch. Switch had a good run, but its sales are now declining sufficiently enough that it can no longer be relied upon to maintain growth moving forward."

I'm inclined to agree. Sure, the Switch's maximum possible lifetime sales will be diminished by a 2024 release, but that comes with the benefit of keeping total sales high. Current projections have Switch hardware at 15M for the current fiscal year, a 48% decline from the Switch's peak year of 2020, while software is projected to be 180M units, a 23.4% decline from the 2021 peak. The longer Nintendo waits, the worse it's going to get. If Nintendo holds back on the Switch 2 until well into 2025 and the Switch drops to, say, 12M next fiscal year, that would make it the fifth-worst year for hardware shipments in the past 30 years. Sure, the Switch would have a higher lifetime total as a result, but I imagine the people who actually have money on the line care less about whether the Switch sells "only" 150M or potentially hits a record-setting 160M lifetime and more about keeping their yearly revenue numbers high.

2024 would be the most opportune time to release the Switch 2. Even with the typical post-replacement drop for a Nintendo system, if the Switch 2 has sales comparable to the Switch's (a reasonable prediction, assuming the same form factor, a reasonable price, good marketing, and enough stock to meet demand) and it does around 16-17M in FY2024-25, total hardware shipments will still end up at well over 20M, far better than the 12M units if they waited until 2025. They should continue with that momentum for the next several years as the Switch 2 matures and reaches the prime.

If the Switch 2 is ready to go next year, then Nintendo is going to release it. They have nothing to gain financially by waiting longer, and could lose billions in potential revenue if they do wait. Those billions are worth a lot more than ensuring the Switch sells as much as possible. Sure, those losses might be incurred in only one fiscal year, but what company is going to take a big hit to their revenues in even one year if they don't have to?