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Forums - Sales Discussion - November NPD 2018 Thread

Intrinsic said:
zorg1000 said:


The point isn't that 3DS costs less than Switch, its that it had both a price cut and revision in the first two full fiscal years and those were its peak years, neither of those things have happened for Switch yet which gives it greater potential for growth in fiscal years 3 & 4 compared to 3DS (years when it began to decline).

PS4 also needed a price cut and revision to have its peak year. 20m shipped in the fiscal year it received a price cut, Slim model & Pro model.

Ok. I get that.

My point though is that this price drop thing is not something that necessarily applies to the NS. 

Yes the PS4 needed a price drop before it saw its peak year, but prior to that it retailed for $350 and up and had years at those prices that were also really good. 

And fact of the matter is that the NS is selling really well. It may not be doing 20M @$299 numbers right now but its selling extremely well. Now what makes anyone think that nintendo is not content with it selling at its current rate and hence not be to eager to drop prices anytime soon as long as it maintains a 16M - 17M yearly sales average. 

Sony has taken that stance by pretty much refusing to drop the price of the PS4 from $299. I mean imagine what a $199 PS4 would have done in 2018 if it sold at that price all year round. But now when they do drop the price to $199 permanently it willl have less of an impact then and only keep the sales curve flat or just slightly down as opposed t massively down. Nintendo could very well be adopting the same strategy. 

I'm sure Nintendo is going to refrain from price cuts as much as possible but it would still be very, very unlikely to not see a price cut or lower cost revision in its 3rd full fiscal year (April 2019-March 2020).

If I recall, @Shadow1980 explained recently that no console has ever gone past the third full fiscal year without a price cut with the majority happening in the 1st or 2nd meaning it would be unprecedented for Switch not to receive either a price cut to the current model or a cheaper revision next year.

So to go back to whether or not Switch will pass 3DS, its launch and first 4 full fiscal years were

3.61m

13.53m (price cut)

13.95m (revision)

12.24m (lower cost revision)

8.73m (premium revision)

Total-52.06m

 

3DS needed a price reduction/revision each year to maintain momentum or soften the decline.

Switch's first full fiscal year had a 1.5m lead over 3DS, if Switch hits its 2nd full year goal (could very well miss) it will extend that lead by 6 million. With a price cut/revision next year, any potential decline will be pretty minimal so it will once again extend the lead by a few million. At that point it would need a nearly 50% YoY decline (unprecedented) to not continue to extend the lead in the 4th full fiscal year.

Here are my rough estimates for Switch's launch and first 4 full fiscal years

2.74m

15.05m

17-20m

15-20m

12-15m

Total, 62-73m

 

By the end of the 4th full fiscal Switch should have an accumulated lead over 3DS by 10-20 million which will be very hard for 3DS to bounce back from.



When the herd loses its way, the shepard must kill the bull that leads them astray.

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I think Switch will pass the 3DS. Could see it reaching them 80-90m mark which would make it Nintendo's second most successful console.



zorg1000 said:

I'm sure Nintendo is going to refrain from price cuts as much as possible but it would still be very, very unlikely to not see a price cut or lower cost revision in its 3rd full fiscal year (April 2019-March 2020).

If I recall, @Shadow1980 explained recently that no console has ever gone past the third full fiscal year without a price cut with the majority happening in the 1st or 2nd meaning it would be unprecedented for Switch not to receive either a price cut to the current model or a cheaper revision next year.

So to go back to whether or not Switch will pass 3DS, its launch and first 4 full fiscal years were

3.61m

13.53m (price cut)

13.95m (revision)

12.24m (lower cost revision)

8.73m (premium revision)

Total-52.06m

 

3DS needed a price reduction/revision each year to maintain momentum or soften the decline.

Switch's first full fiscal year had a 1.5m lead over 3DS, if Switch hits its 2nd full year goal (could very well miss) it will extend that lead by 6 million. With a price cut/revision next year, any potential decline will be pretty minimal so it will once again extend the lead by a few million. At that point it would need a nearly 50% YoY decline (unprecedented) to not continue to extend the lead in the 4th full fiscal year.

Here are my rough estimates for Switch's launch and first 4 full fiscal years

2.74m

15.05m

17-20m

15-20m

12-15m

Total, 62-73m

 

By the end of the 4th full fiscal Switch should have an accumulated lead over 3DS by 10-20 million which will be very hard for 3DS to bounce back from.

Yes I am aware that hardware always sees some sort of price revision within the first 3 years. But nintendo really seems to be against price drops. Hell it took 3 years before it dropped the price of the Wii by $50. They would sooner bundle the system with a game than cut the price, this is just going off how nintendo has always been.

The 3DS was an exception because that needed a price drop to spur sales as it was selling way below expectations. Not the case with the NS. I don't know, I just believe we live in a very different world today than we did at the time a lot f people are drawing their conclusions from. Now revenue generated from an existing user base seems to have taken priority over the raw size of a user base. Even nintendo is now doing the whole online service thing too.

The way I see it, we will see bundles instead of price drops or revisions offering "more power and/or larger batteries/ storage at the same price point" before we start seeing $199 NS in the wild.  Unless sales start to drop. And before any of this happens nintendo will also want to release a number of their big IPs at this current price point to see how much of an effect that will have on sales.

I agree with your estimates though... but I dont believe it will have more than one 20M selling year. Especially when you consider that its best shot at having a 20M selling year at probably a reduced price is on or before a year when 2 new consoles would be released. Thats a lot of media attention taken away from the NS.  



Intrinsic said:
zorg1000 said:

I'm sure Nintendo is going to refrain from price cuts as much as possible but it would still be very, very unlikely to not see a price cut or lower cost revision in its 3rd full fiscal year (April 2019-March 2020).

If I recall, @Shadow1980 explained recently that no console has ever gone past the third full fiscal year without a price cut with the majority happening in the 1st or 2nd meaning it would be unprecedented for Switch not to receive either a price cut to the current model or a cheaper revision next year.

So to go back to whether or not Switch will pass 3DS, its launch and first 4 full fiscal years were

3.61m

13.53m (price cut)

13.95m (revision)

12.24m (lower cost revision)

8.73m (premium revision)

Total-52.06m

 

3DS needed a price reduction/revision each year to maintain momentum or soften the decline.

Switch's first full fiscal year had a 1.5m lead over 3DS, if Switch hits its 2nd full year goal (could very well miss) it will extend that lead by 6 million. With a price cut/revision next year, any potential decline will be pretty minimal so it will once again extend the lead by a few million. At that point it would need a nearly 50% YoY decline (unprecedented) to not continue to extend the lead in the 4th full fiscal year.

Here are my rough estimates for Switch's launch and first 4 full fiscal years

2.74m

15.05m

17-20m

15-20m

12-15m

Total, 62-73m

 

By the end of the 4th full fiscal Switch should have an accumulated lead over 3DS by 10-20 million which will be very hard for 3DS to bounce back from.

Yes I am aware that hardware always sees some sort of price revision within the first 3 years. But nintendo really seems to be against price drops. Hell it took 3 years before it dropped the price of the Wii by $50. They would sooner bundle the system with a game than cut the price, this is just going off how nintendo has always been.

The 3DS was an exception because that needed a price drop to spur sales as it was selling way below expectations. Not the case with the NS. I don't know, I just believe we live in a very different world today than we did at the time a lot f people are drawing their conclusions from. Now revenue generated from an existing user base seems to have taken priority over the raw size of a user base. Even nintendo is now doing the whole online service thing too.

The way I see it, we will see bundles instead of price drops or revisions offering "more power and/or larger batteries/ storage at the same price point" before we start seeing $199 NS in the wild.  Unless sales start to drop. And before any of this happens nintendo will also want to release a number of their big IPs at this current price point to see how much of an effect that will have on sales.

I agree with your estimates though... but I dont believe it will have more than one 20M selling year. Especially when you consider that its best shot at having a 20M selling year at probably a reduced price is on or before a year when 2 new consoles would be released. Thats a lot of media attention taken away from the NS.  

The thing I don't understand is that you agree with those estimates I gave yet still think it will fall behind 3DS at some point, just exactly when will that be?

Those estimates I gave put it at 62-73 million, let's split it down the middle and say 67.5 million for convenience sake, that's a 15 million lead.

That's roughly 10 million away from where 3DS will end up at so you think it will go from 12+ million in the 4th full fiscal year to under 10 million in years 5 and beyond? A time period in which 3DS will sell ~25 million.

I'm sorry but the math just doesnt add up to me.



When the herd loses its way, the shepard must kill the bull that leads them astray.

Matching the 3DS is the absolute bare minimum of the Switch.

My Switch LTD predictions:

FY 2017: 2.74m
FY 2018: 15.05m (17.79m)
FY 2019: 19m (36.79m)
FY 2020: 21m (57.79m) - Animal Crossing, Pokemon Gen 8, price cut/hardware revision to $250. Peak year.
FY 2021: 16m (73.79m) - MP4, Bayo 3, Pokemon Gen 4 remakes, growing 3rd party support.
FY 2022: 12m (85.79m) - hardware revision/price cut to $200.
FY 2023: 11m (96.79m) - Pokemon Gen 9 in November, NS2 Launch in March.
FY 2024: 8m (104.79m) - hardware revision/price cut to $150.
FY 2025: 4m (108.79m)
FY 2026: 1.21m (110m)
FY 2027: 0.30m (110.30m) - Discontinuation
FY 2028: 0.03m (110.33m) - Final year on the market.

Americas: ~44 million
Europe: ~27 million
Japan: ~27 million
Others: ~12 million



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PAOerfulone said:
Matching the 3DS is the absolute bare minimum of the Switch.

My Switch LTD predictions:

FY 2017: 2.74m
FY 2018: 15.05m (17.79m)
FY 2019: 19m (36.79m)
FY 2020: 21m (57.79m) - Animal Crossing, Pokemon Gen 8, price cut/hardware revision to $250. Peak year.
FY 2021: 16m (73.79m) - MP4, Bayo 3, Pokemon Gen 4 remakes, growing 3rd party support.
FY 2022: 12m (85.79m) - hardware revision/price cut to $200.
FY 2023: 11m (96.79m) - Pokemon Gen 9 in November, NS2 Launch in March.
FY 2024: 8m (104.79m) - hardware revision/price cut to $150.
FY 2025: 4m (108.79m)
FY 2026: 1.21m (110m)
FY 2027: 0.30m (110.30m) - Discontinuation
FY 2028: 0.03m (110.33m) - Final year on the market.

Americas: ~44 million
Europe: ~27 million
Japan: ~27 million
Others: ~12 million

I agree with you that 3DS numbers are a worst case scenario but I also think your numbers are a best case scenario. I think it will land somewhere right in the middle.



When the herd loses its way, the shepard must kill the bull that leads them astray.

zorg1000 said:
PAOerfulone said:
Matching the 3DS is the absolute bare minimum of the Switch.

My Switch LTD predictions:

FY 2017: 2.74m
FY 2018: 15.05m (17.79m)
FY 2019: 19m (36.79m)
FY 2020: 21m (57.79m) - Animal Crossing, Pokemon Gen 8, price cut/hardware revision to $250. Peak year.
FY 2021: 16m (73.79m) - MP4, Bayo 3, Pokemon Gen 4 remakes, growing 3rd party support.
FY 2022: 12m (85.79m) - hardware revision/price cut to $200.
FY 2023: 11m (96.79m) - Pokemon Gen 9 in November, NS2 Launch in March.
FY 2024: 8m (104.79m) - hardware revision/price cut to $150.
FY 2025: 4m (108.79m)
FY 2026: 1.21m (110m)
FY 2027: 0.30m (110.30m) - Discontinuation
FY 2028: 0.03m (110.33m) - Final year on the market.

Americas: ~44 million
Europe: ~27 million
Japan: ~27 million
Others: ~12 million

I agree with you that 3DS numbers are a worst case scenario but I also think your numbers are a best case scenario. I think it will land somewhere right in the middle.

Yeah, I know these predictions are on the optimistic side. But I agree, reasonable predictions should be somewhere between 80-110 million. 



zorg1000 said:

The thing I don't understand is that you agree with those estimates I gave yet still think it will fall behind 3DS at some point, just exactly when will that be?

Those estimates I gave put it at 62-73 million, let's split it down the middle and say 67.5 million for convenience sake, that's a 15 million lead.

That's roughly 10 million away from where 3DS will end up at so you think it will go from 12+ million in the 4th full fiscal year to under 10 million in years 5 and beyond? A time period in which 3DS will sell ~25 million.

I'm sorry but the math just doesnt add up to me.

My own personal estimate fr the NS was originally 50M. Then after its first year on the market I took it up to 65M. The 3DS is at 73M now... lets round that up to 75M. 

I don't believe the NS will sell more than 75M. Plus or minus 5M. S worst case scenario 70M best case 80M. 

It doesn't have to fall behind the 3DS to sell a total of 75M. Especially when you consider that it took the 3DS 7+ yrs to get there. The NS can do it in just over 6yrs all the while tracking ahead of the 3DS. 

I won't be surprised though if nintendo pulls out something like a Switch+ around 2022/2023 and call that a revision but that have its wn games that cant run of the current switch. They have done this before.  



PAOerfulone said:
Matching the 3DS is the absolute bare minimum of the Switch.

My Switch LTD predictions:

FY 2017: 2.74m
FY 2018: 15.05m (17.79m)
FY 2019: 19m (36.79m)
FY 2020: 21m (57.79m) - Animal Crossing, Pokemon Gen 8, price cut/hardware revision to $250. Peak year.
FY 2021: 16m (73.79m) - MP4, Bayo 3, Pokemon Gen 4 remakes, growing 3rd party support.
FY 2022: 12m (85.79m) - hardware revision/price cut to $200.
FY 2023: 11m (96.79m) - Pokemon Gen 9 in November, NS2 Launch in March.
FY 2024: 8m (104.79m) - hardware revision/price cut to $150.
FY 2025: 4m (108.79m)
FY 2026: 1.21m (110m)
FY 2027: 0.30m (110.30m) - Discontinuation
FY 2028: 0.03m (110.33m) - Final year on the market.

Americas: ~44 million
Europe: ~27 million
Japan: ~27 million
Others: ~12 million

Unrealistic if you ask me. The jumps and drops are too much. Increasing by 4M from 15M to 19M, then anther 3M increase from 19M to 21M then  massive 5M drop from 21M to 16M........... nope, sales just don't work like that.



LT numbers will heavily depend from number of Switch revision, Nintendo support, life time of console and time until most likely Switch 2 don't arrives on market.
Just look how much revisions 3DS has and how much long Nintendo support 3DS, look how PS4 and XB1 received mid gen upgraded and how that effected on sales for them in later years on market.

People tend to forget couple of things about Switch:


-Switch is essentially handheld hardware and like that will have multiple different price point revisions that will effect on sales and llife span of platform (similar to 3DS just with stronger sales per years)
-Switch has hybrid concept and be used like real home console or like real handheld, so it selling to both home console and handheld lowers
-Switch is Nintendo unified platform, that means all Nintendo IPs (handheld and home console), all Nintendo focus and undivided support just for one platform, and that means much stronger support in any case (I dont talk only about 1st party game support, but also about 3rd party exclusive deals, planning, marketing..)
-Nintendo itself said they want Switch to have longer life span than usual 5-6 years on market (they clarly dont want to repeat Wii situation when they had couple of great years and where they lifted support and sales died too soon)
-Compared to just home console, Switch can sell like device per person (Wii couldnt that), Nintendo said they ultimate goal with Switch is to sell like device per person but also that current price point ($300) is still not there for something like that (they will need around $200 for such a sales).
-Switch is selling great despite still didnt had not single price cut or revision that always boost sales in any case

With all that on mind, Switch potential for for sales is huge, Switch can easily become best selling Nintendo platform after DS, and bare minimum that Switch will hit is 80m+ and in order to Switch hit just around 80m and not much more than that would need that some Nintendo plans go very wrong.

 

So I cant understand people that saying that their 80m projection is optimistic, or even less people that saying that Switch will hit similar to 3DS numbers, I mean Switch will be only after 2 years on market at almost half of that number (80m).