The Road to 160m+ for Nintendo Switch

[Fight-the-Streets]

Doctor_MG said:

Fight-the-Streets said:

Of course it's possible for Nintendo to miss the mark but certainly not by more than 1m. Why? 1. Nintendo has no reason to make ambitious forecasts for a console in its 8. year while the successor is already knocking on the door and 2. forecasts are harder to make during the strong years of a console's lifecycle as it's hard to exactly know how high the hype will really be, how long it will carry on and if really enough units can be produced to meet the possible very high demand but in the last 2-3 years of a console's lifecycle (before the successor arrives), naturally, it's way easier to make more exact predictions as there are clearly known facts (i.e. percentages of yearly declines) and less unknown facts (i.e. hype is gone, no production issues).

Nintendo has adjusted their forecast by over 1M multiple times in just the last three years. FY 2022 (dropped by 2.5M) and FY 2023 (dropped by 3M). So it's not like they haven't adjusted forecasts recently. 

But I do think you have a point about how revising forecasts isn't really as necessary, even in the face of slower than expected sales, because it's at the end of its life. The units will sell eventually, the system isn't going to get substantially cheaper to produce at this point, and they will want to focus on manufacturing Switch 2 anyway. 

I'm sorry, I was a bit confusing in my wording. FY22 and FY23 for Switch I would still consider as part of its stronger years, therefore harder to make precise forecasts, therefore the drops of 2.5m and 3m respectively are within range. The Switch is a weirdo as it had six strong fiscal years, FY18 to and incl. FY23 (that includes the launch year, build up momentum, the peak and the decline down to still high numbers). FY24 is the first year I consider belonging to the swansong years and the initial forecast of 15m (later updated to 15.5m) was missed only by 0.7m.

Nintendo's Q&A actually goes into details about how they want to achieve the forecasted 13.5m for FY25:

https://www.nintendo.co.jp/ir/pdf/2024/240508e.pdf - see Q2-A2 and Q5-A5

In A5 Nintendo reiterates that they thought that the 15m forecasted Switches in the previous FY were ambitious, yet they still surpassed this ambitious number by 0.7m! Although, they admit that the 13.5m for FY25 are again ambitious, I have the impression that with the knowledge of the current sales momentum, the sales initiatives they plan and not the least with the planned software releases that this number is very well achievable. What makes me confident too is the fact that Nintendo put it at .5m. I mean, they could just name 13.00m and still anybody would have thought it's quite a high number for its 8. year, but they put it specifically at 13.5m. For me, a clear indication that they are quite confident about it.

Last edited by Fight-the-Streets - on 11 May 2024