The Road to 160m+ for Nintendo Switch

[Bofferbrauer2]

Fight-the-Streets said:

I find it interesting that we are in the same situation as last year. Last year, for FY24, Nintendo forcasted 15m and many here believed that this number can't be reached, many believed a more realistic number is in the 13m range, some more pessimistic in the 12m range, underlined by a Q&A where Nintendo admitted that it will be tough to reach those 15m. In the end, they even surpassed it and shipped 15.7m.

Now, Nintendo forcasted 13.5m and everybody thought it is outrageous (incl. myself). Most believed in a range of 10-12m, some more pessimistic even below that, again underlined by a Q&A where Nintendo admitted it will be tough to reach those 13.5m.

Of course the situation is different than last year: no big bangers like Zelda: TOTK and Super Mario Bros. Wonder and the saturation point of the Switch is even closer. Besides, it's possible that an ambitious forecast will simply not be reached. These are all the main negative factors but we also have positive factors:

1. Declining percentual failures: If you forecast 25m but negatively fail by 20% it was a bad forecast but you still ship 20m which is still a high number. On the other hand, if you forecast 13.5m but negatively fail by 20% you end at 10.8m. Although, the percentual failure is the same as before, i.e. 20%, this latter forecast is much worse than the former. This is because once the console is in decline and came down to yearly shippings of below 15m, naturally, the margin of error in forecasts become much lower and with each year from here on out, the margin of error will become even lower. In other words, the margin of error we have for the Switch in FY25 is not higher than 10% which in turn means the lowest possible Nintendo will ship is 12.15m.
   
   
2. Nintendo said the following in answer 2 of the Q&A (Link: https://www.nintendo.co.jp/ir/pdf/2024/240508e.pdf ): „...We will release new titles this fiscal year and, in addition, many people have watched The Super Mario Bros. Movie through various means since its theatrical release, so with factors like that, we believe we will be able to continue to generate new demand. Also, there is a large catalog of existing Nintendo Switch games, so if we can effectively convey the appeal of these evergreen titles, we believe we can also pursue the demand for multiple systems in the same household, born from the unique value of Nintendo Switch... .“
   
   In answer 5 they said the following: „... This year we will need to implement various initiatives to sell the forecasted number of Nintendo Switch. During last year's holiday season, we sold hardware bundled with software, and we also conveyed the appeal of having multiple units of Nintendo Switch in a household. We plan to implement various initiatives to approach 13.5 million units of sales in the current fiscal year as well... .“
   
   

Nintendo mentions "various initiatives to approach 13.5 million". It is everybody's guess what these initiatives will be but certainly it will not be nothing. Nintendo also mentioned that "During last year's holiday season, we sold hardware bundled with software". I think you can bet that exactly this will be one of the initiatives for this holiday season as well. Maybe Nintendo will start to make permanent bundles with a free game (plus 3 months of free NSO) and/or make permanent price cuts. Nintendo Selects of the back catalogue would be another initiative. The ultimate initiative would be a new SKU, in that case, as mentioned in former posts, a well priced TV-only Switch would make the most sense. The already announced Zelda: EOW Special Edition Switch Lite is yet another initiative.

Bolded: No Tears of the Kingdom but instead a Zelda where you actually play Zelda for once. No Super Mario Wonder but a Mario & Luigi instead (the first time where's a Paper Mario and a Mario & Luigi on one system btw). Add to this a new Mario Party, the Marvel vs Capcom and Ace Attorney collections which will definitely bring some fans, same for Dragon Quest I-III 2D-HD. Finally, there's still the possibility that Metroid Prime 4 launches within the tail end of the fiscal year (like February or March 2025) and boost the sales from there. In 2023 Switch sales were high in Spring but disappointing during the holiday season, with all those releases coming Summer and Fall instead, I expect this year to be the reverse and Nintendo to reach it's target due to better holiday sales than last year. 

Italic: Yeah, some kind of promotions will definitely happen. A Switch with at least one pack-in title (I would love to see a Switch coming with both Breath of the Wild and Tears of the Kingdom in one bundle)  is pretty much guaranteed for the holidays, and a small permanent price cut is also certainly in the cards in my opinion. Hardware prices have dropped again after spiking during Covid and it's inflationary aftermath, so I think this could very much be an option now.

Underscored: I very much doubt they'll waste production capacity now on a new model right when they're gonna start to produce the successor. That simply doesn't make much business sense at all.