RolStoppable said:
UPDATE: July 31st, 2018
Switch - 19.67m (+1.88m this quarter) Super Mario Odyssey - 11.17m (+0.76m) Mario Kart 8 Deluxe - 10.35m (+1.13m) The Legend of Zelda: Breath of the Wild - 9.32m (+0.84m) Splatoon 2 - 6.76m (+0.74m) 1-2-Switch - 2.45m (+0.16m) ARMS - 2.01m (+0.16m) Kirby Star Allies - 1.89m (+0.63m) Xenoblade Chronicles 2 - 1.42m (+0.11m) Donkey Kong Country: Tropical Freeze - 1.40m (NEW) Mario Tennis Aces - 1.38m (NEW)
That Switch hardware shipments would disappoint had to be expected after the weak sell-through in the USA during the months of April and May. Still, the actual worldwide result of 1.88m shipped underwhelms even more, because sell-through in Japan had been good during the quarter. Conversely, overall Switch software shipments are on pace to meet the forecast of 100m for the fiscal year, so it's not all bad.
Nintendo's projections for the fiscal year remain unchanged, but something will probably have to give eventually, be it unit sales, revenue and/or profit. Q1 of the current fiscal year has been weak and the culprit is easily identified: The lack of release of a guaranteed 5m+ seller during both quarters of calendar year 2018 had a negative impact on momentum; in calendar year 2017 Nintendo released one 5m+ seller in each quarter. The remedy to make things pick up again isn't rocket science either: Big games, bundles, a possible price cut, an improbable revision. Pokémon and Super Smash Bros. in November and December constitute a strong holiday lineup, but fiscal Q2 is about as strong (or rather weak) as Q1 has been.
Failure to meet forecasts is no doom and gloom though. In a scenario where Nintendo falls short on hardware, software and profits by 20% each, we'd still be looking at 16m hardware, 80m software and ~$1.5 billion in profits. That's still plenty healthy. It's important to remember how the perspective of success and failure has changed in the last 18 months. Before the Switch's launch it was deemed a success if Nintendo manages to remain in the hardware business, now it's a failure if Switch can't beat the PS4 in lifetime sales. The bottom line is that the current lull won't put Switch's future into jeopardy, so there's no reason to worry.
What's most affected by this weak fiscal quarter is Switch's ability to pass older consoles in lifetime sales. Three months ago it looked like Switch would comfortably beat the GameCube by September 30th, now it's not even a sure thing anymore. There are 2.07m left to go, so if fiscal Q2 is flat in comparison to Q1, Switch will fall short. Nintendo stated that sales momentum has picked up since E3, but we'll have to wait and see how strong of an increase it has been.
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