Every console declines at some point, but that's not the point where the introduction of next gen is necessary. The PS4's shipments peaked in its third full fiscal year (ending March 2017), but the PS5 didn't launch in 2018 because of that. The Wii's decline we are talking about (following a 25.94m year) was coming off the biggest year a home console had had ever. What bothers me in this discussion is that you continue to frame any sort of decline as an event of urgency that demands to move on to next gen, but a console that ships 20m+ is still more than fine. If Switch declines in the following fiscal year from, say, 22m shipped to 20m shipped, then that's nothing to worry about. Every console completes its growth phase eventually, but that's not the same thing as hitting saturation.
The Wii and Switch aren't comparable anyway, because the Wii's third party support was questionable to begin with and broke down after about four years; that's why I said that the Wii lived and died by its first party support. The best comparison to Switch you can get is the DS; while Nintendo's first party software had fewer big hitters in the latter years, the DS kept trucking because it had a lot to offer in terms of third party software. That's what we have ahead of us; Nintendo won't be able to have a first party lineup with the same impact on Switch (first installment of a series moves more hardware than sequels), but the sheer volume of overall software quality will sustain hardware sales at a high level.
What do you think of Sony's PS4 to PS5 transition in terms of timing and everything else? Same question about Microsoft and Xbox One to Xbox Series X. If you answer these questions, it would be easier to understand your perspective on the matter.
If I pin-point the playstation 4/5, I think the timing is right for what they offer technologically and being aware of the competition.
The PS4 is likely to record another extremely stable year of 220-50m in software sales , on par with 2019, which is not far off 2018. Extremely stable for a system about to replaced this year. It's buzzing with software and the userbase is extremely active. Nintendo's ability to echo this in their own environments is something i really question. They are still driven extremely heavily by 1st party and I have my doubts about the appetite of their audience for 2 Mario karts per generation, 2 Smash Bros per generation, 2 Animal Crossings. Without that kind of line up, I see steady decline for maybe 3 years leading up to holiday 2024. I mentioned the wii but I can look at the DS too. When it drops from 190m FY09 to 150m FY10, I can't see any obvuously lack of effort from Nintendo's side. To me it appears like a result of the difficulty in replicating the success of a Nintendogs or Brain Trainning. Its expected that products mature and decline, but companies normally act on this. Not as panic, but just a calculated business decision. Planning a device to arrive arrive almost 6 years after launch is not a mad rush.
Nintendo profits can peak in 2023 due to software great, but I think thats a big if.
Ultimately no company wants to go through years of notable profit dips, if they can revitalise them they will. In the video game industry it was seen as a necessity to balance the actual capacity of teams to produce titles for new hardware, the necessary wait to produce technology leaps which validate new hardware and waiting for desire in the audience to once again repurchase hadrware.
I feel like there are so many things pointing at us saying that things do not need to be so cut and dry this decade. Even across Switch and PS4, a lot of games are operating in the same development environment. Nintendo couldn't just tweak a DS game and put it on the 3DS, they'd have to literally make 2 games. You couldn't just polish a Wii game and put it on the Wii U, it'd look like a turd. We're finally at a point where developers (and Nintendo), could comfortably transition smoothly between 2 pieces of hardware without mandating slums inbewteen. I' not talking about Ninetndo forcing out a new platform every 2 years, its introducing one almost 6 years after your last debuted and maybe 2 years after it peaked. I think a difference in my believe is that people believe this to be the end of the Switch whereas I don't.
Regarding software development and that fact the prior generations would have never had this opportunity. There is nothing on PS4 which couldn't be ported to Switch, although right now many games will still take too many compromises/time. That is exactly what I believe will change in the coming generation. Diminishing returns, a push for 4k, ray traycing & a key focus on scalabilty across all modern engines and the proven effectiveness of DLSS (which will only get better) will create a golden opportunity for Nintendo. I had to cackle watching the Horizon 2 breakdown on DF when they literally pause and zoom in to the lighting of the hairs on her neck.. Its nice but not a necessity, But anyway. This window of opportunity is widest at the beginning of the generation, where devs can establish their audience on X or Y platform. The reason why so many devs will ignore Switches sales is because they know that 150m people already have access to all their newest games, why waste resources squezing it on the Nintendo thingy. This won't apply in 2022 because PS5/SX won't have a huge userbase. I certainly don't want to push 3rd party support as the main point of releasing a Switch 2 in holiday 2022, but I think its the one of the most concrete ways for Ninetndo to actually end a "generation" selling 250m units of software. It is one of the safest ways to actually plot growth imo
Topping of all of this is the fact that I don't think Nintendo is planning some unqiue successor to the Switch. Nor do I believe we'll see some sudden visual leap from most of their 1st party studios outside of a few titles like Zelda and 3D mario. Its really just a case of saying, we can use some new shiny hardware to help the balance sheets this year, should we build it to last for 3 years or the next 7? For example I don't think we will ever get something like the Xbox One X again, in future the XBox One X would be the Xbox Series S (anaconda)
From a Nintendo perspective you ask yourself. Will Mario Kart 9 sell more on Switch in 2023 or would it sell better on Switch 1+2? Will we make make more hardware revenue in 2023 selling just the Switch or could aim for 30m units like playstation achieved during the peak of PS1/PS2. And that really caps it off, I don't see a $399 Switch 2 making a Switch 1 obsolete, I think they can tag team and nothing will be lost to Nintendo or the end user. Not until Nintendo decides its time to drop Switch 1.
My only lingering thoughts are, what is the actual reality of a 2022 chip in terms of power, battery, cost. I know releasing in 2024 is the predictable choice, I just think there is potentially a profitable route for the next decade for them. And of course maybe I'm completely wrong about Switch late gen software sales, maybe it maintains its peak. I'm just going off what I recall from their past and by people's usual casual interest getting the main key Nintendo games and calling it a day.