By using this site, you agree to our Privacy Policy and our Terms of Use. Close
javi741 on 28 July 2023
Edit Thread
Shadow1980 said:

Okay. Time to try to get this thread back on topic.

I already said I'm going with Q2 2024, but regarding my reason why I think that, I'm going to repeat what I've said in another thread: If the Switch 2 is ready to go next year, it's going to release next year. The only way it's going to be a 2025 release is if it's not ready for prime time in 2024. They are not going to delay it just to squeeze more out of the Switch. There is no good business reason for waiting any longer than necessary. The Switch is in decline. The longer Nintendo waits, the worse things will get.

On the hardware side of things, current projections have Switch hardware at 15M for the current fiscal year, a 16.5% decline from last fiscal year and a 48% decline from the Switch's peak year of 2020. 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.

On the software side, things won't be as bad, but sales are still in decline. Software shipments for the current fiscal year are projected to be 180M units, a 16% drop from last fiscal year and a 23.4% decline from the FY2021-22 peak. If software sales in the 2024-25 fiscal year drop to, say, 140M units, that wouldn't quite be close to the previous low of 75.34M units in the 2016-17 FY, but it would still be numerically closer to that low than to the Switch's peak, and would represent a drop of over 40%, or nearly 100M units, from the 2021-22 FY.

The console market is cyclical, and the Switch is in the "decline" part of the "grow-peak-decline" cycle. Nintendo and their shareholders will not sustain continued, inevitable losses to revenues if they don't have to. I'm not saying the Switch 2 won't release in 2025, but Nintendo will not release it that year unless they simply cannot release it next year. A 2024 release simply makes better business sense as it will reset the cycle and result in higher revenues next year, assuming it has a similar trajectory as the Switch.

While you do have a point with falling software sales and hardware sales, you didn't mention the most important part of business which is profit. Based on Nintendo's forecast this fiscal year, Nintendo expects to make an operating profit of 3.21 Billion USD$ which is still extremely good. To put that in perspective, I don't think Playstation in their nearly 30 years of existence never made a profit that high in any year, of course same goes for Xbox. When comparing it to Nintendo's standards, this fiscal year would be their 6th most profitable fiscal year in their history out of the 40 years they've been in the console business.

I feel like this is what a ton of people on the internet aren't realizing when forecasting when Switch 2 will launch, they often compare the lifecycle of other successful Nintendo consoles like the Wii or DS and think that the successor will automatically release around the same timeframe as them, but the Switch is on a WAYY different level when it comes to profitability and overall engagement for a console in its 7th year. The Wii and DS were dead by their 7th year and Nintendo's was LOSING money by the 7th year of both of those consoles, Switch in its 7th year is BREAKING profit records. No other console in history could come close to comparing to the Switch in its 7th year which is why we shouldn't lean that much on common console lifespan trends when forecasting the Switch successor, the Switch is a major anomaly.

If Nintendo's forecast is correct, the Switch would have the greatest selling 7th year for any console of all time beating the PS2. Some might argue that the PS2 sold crazy well and was profitable in its 7th year but still had a successor within the typical 6 year lifecycle. However, there were big differences between PS's circumstances and Nintendo's circumstances right now.

For one thing, even with the PS2 their wasn't one year where Sony's profit came even close to the Switch's 7th year profit, so this incentivized Sony a bit more to release a successor.

Plus probably the biggest reason is that Sony was worried about competitors like Xbox and Nintendo stealing their thunder away from PS if they were to release hardware more advanced than the PS2 eariler, so even though the PS2 was more than successful, Sony needed to move on to prevent their marketshare from being stolen from Microsoft with the Xbox 360. Nintendo is not in that situation with the Switch, the PS5 & Series X are probably like 20 times more powerful than the Switch but the Switch is still outselling them and they haven't stolen much potential profit from Nintendo, Nintendo has no legit competitors to worry about.

Yes sales and profits are dropping for Switch, but the profits are still nearly historic and releasing a new console is risky, Nintendo's track record clearly shows that a successor is far from guranteed to produce the same level of success and profits, the Wii transition to Wii U clearly shows that. Nintendo went from having their most successful era in their history to their worst within a matter of a few years. Nintendo might be content just to keep the Switch for a little longer since it's still hugely profitable.