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Forums - Sales Discussion - According to Mat Piscatella "Next Gen consoles sales will not have a major effect on Switch sales"

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What do you think

Agree with him 46 76.67%
I am not agree 14 23.33%

Depends on what he thinks "major" means. The new consoles could easily steal a million or so sales from Switch but is that "major" compared to sales of 10m and more?
On top of that, unless you have a parallel dimension to compare to, it's going to be hard to see if they will have a noticeable impact.

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Sorry for the late reply. I've been ill lately.

The_Liquid_Laser said:

I certainly don't think that sales nosedive the week after a competitor launches.  Competition doesn't mean that one system immediately "falls off a cliff" as soon as a competitor releases.  The effects of competition are not immediate.

But if you look over the course of a whole generation, yes there is definitely evidence of competition.  I'm kind of surprised anyone would say the opposite.  Here is a fairly straightforward example.  North America console sales of Generation 3 and 4 look like this

NA Console sales (in millions), Generations 3 & 4

Nintendo Sega Total
Generation 3 33 2 35
Generation 4 23 17 40

Sales went down for Nintendo going from Generation 3 to 4.  Sales went up for Sega.  When you account for population growth the total sales for both generations is almost the same.  Customers were leaving Nintendo and going to Sega.  That is competition.  I really don't see how anyone could say that it isn't competition.

I was hoping my meaning was clear, but to further clarify, a system's sales do not experience any immediate impact from the offset release of a system from a competitor. If System A from Company B is selling, say, 200k units per month, we shouldn't expect that to decrease substantially just because System X from Company Y is released, especially if System B is a next-gen system. In the event of an offset release between two systems of different brands, there is no reason to think that sales of the system released first will experience any decline once the system released second. This goes double if they're from two different generations.

Market share however is a different story altogether. If two systems in the same generation are offering a similar enough product, they can impact each other's market share. Obviously Sega's growth in Gen 4 came at Nintendo's expense. I wasn't intending to argue otherwise. The PlayStation's explosive rise in popularity a couple of years after it released also hurt Nintendo's market share, even more than Sega's growth did the prior generation. Xbox's growth last gen came at the expense of the PS3, and they lost market share back to Sony this gen. But this impact is not seen in the form of a dip in the ongoing sales of System A when System X is released a year or two later.

In other words, this right here:

DonFerrari said:

It could be said that all effect that PS3 had on X360 sales were already in effect from the release of X360, because customer new about PS3 and that it would launch, so it affected the sales curve from the beginning so the time of release didn't change much on how much it affected it.

If the Switch was going to feel any impact from next-gen PS & Xbox, it's already being felt. But again, that's assuming they're directly competing with each other in the first place.

As I said, the console market is not a zero-sum game. The existence of multi-brand console owners proves this. While there are plenty of people like that have both a PS4 and XBO (and I plan on owning both a PS5 and XSX), it probably is safe to say that in a majority of cases, the sale of a PlayStation translates to a lost sale for Xbox and vice versa. PS & Xbox share something like 90+% of the same games and have pretty much the same capabilities, features, etc. The exclusives are really the only major difference.

But with Nintendo we have consoles that are considerably different from PS & Xbox. For three systems straight, we've had unconventional (and underpowered) systems that share relatively little of their libraries with PS & Xbox. There has been an absolute dearth of big-budget AAA third-party titles on Nintendo systems for years now, and the Switch is no exception. So far, the only new current-gen AAA third-party games (that means no re-releases/remasters of older games) the Switch has received that I can recall are Doom 2016, Wolfenstein II, Alien: Isolation, The Witcher III, Mortal Kombat 11, and Dragon Quest 11, and it received those ports long after the PS/Xbox versions were released (the upcoming Doom Eternal is supposed to come out for the Switch as well, but not until after the PS/Xbox versions).

Because of how different Nintendo systems are from PlayStation and Xbox, there's far less reason to assume that the sale of a Nintendo system will translate to a lost sale for Sony or MS. And the numbers show that this is indeed the case. A very large percentage of Switch owners also own either a PS4 or XBO. According to Mat Piscatella, that figure is 40%. That's a lot of Switch owners also owning a more conventional console.

We saw similar figures from last generation. A Nielsen study from February 2015 suggests a significant overlap between Wii owners and owners of PlayStation and Xbox systems, with nearly three-quarters of PS4 and XBO owners at the time having also owned a Wii.

According to another Nielsen survey from March 2012, 56% of households in the U.S. at the time owned a 7th-gen console. Given that there was about 121 million households in America at the time according to the U.S. Census Bureau, that amounts to about 67.8M console-owning households. There were 93.9M Gen 7 consoles sold in the U.S. between the 360, PS3, and Wii as of March 2012, giving us a consoles-per-console-owning-household ratio of about 1.386-to-1. If we assume that 5% of 360 owners at the time also owned a PS3 (because there had to have been at least some households that owned both), that means that 62.2% of Wii owners were also PS3 and/or 360 owners. If we increase the percentage of 360 owners who owned a PS3 to 10%, that still means that 57.9% of Wii systems were in a house with a conventional console.

Basically, there are tens of millions of people who have owned a Nintendo system alongside a same-gen PlayStation or Xbox.

We didn't see any immediate affect on PS4 & XBO sales due to the release of the Switch. We shouldn't expect any immediate affect on Switch sales when the PS5 & XSX release. Simple as that.

Last edited by Shadow1980 - on 13 January 2020