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Forums - Sales Discussion - Why are Nintendo Switch sales peaking much later than other Nintendo consoles?

Norion said:

Both ran out of stock and both Sony and Microsoft felt it was more important to focus on manufacturing the new consoles than keeping up with the new increased demand for the old ones. Also the Switch was in the peak of its life while the other two were near the end and declining so the former had a much bigger boost potential since a lot of people who have bought a Switch during the pandemic will have already had a PS4 or Xbox One and a lot of people who had none of them probably picked the Switch over the other two since it was more appealing to them, for example a lot of the women who bought a Switch.

Pretty much this. It was the replacement year for the PS4 & XBO. There was only so much stock to go around. For example, Sony only shipped 6.2M units during the 2020 calendar year, with maybe a third of those going to North America. Combined with remaining stock from 2019, there was no way it could have continued selling what it was doing in the spring and summer for the whole year. Even without the pandemic, it still would have probably sold about the same as it did for 2020 as a whole (somewhere in the 2.1-2.3M range; we're still missing Nov.+Dec. NPD sales for last-gen). If Sony had doubled their PS4 output, they might have been able to sell upwards of 3.5M or more, but there was no point in doing so with the PS5 on the horizon.

But the data is clear. There was significantly increased demand for all systems during the pandemic. Prior to when they depleted their stock, the PS4 & XBO were performing far better than they had any right to be doing, even after the initial spike in March-April.

In the six months from March to August of last year, the PS4 alone sold 1.43M, not too far short of the 1.5M the 360 & PS3 sold combined in the same period in 2013. While the PS4 was down 9.5% overall YoY for the May-Sept. period, that's an incredibly small drop for a replacement year, far less than the YoY drops experienced by the 360 (-42.2%) and PS3 (-30%) in the same period in 2013, or by the PS2 (-19.1%) in the same period in 2007. But by October the PS4 had burned through most of its stock, and sales dropped off significantly (and were already slowing down in September). Still, it had sold 1.85M through the first three quarters of 2020, the second-best Q1-Q3 performance in a replacement year ever in the U.S., behind only the PS2, and marginally up from the same period in 2019.

The XBO meanwhile burned through its stock quicker, but was still posting far better than expected sales prior to that. In addition to the big gains in the March-May period, its sales in June, while down YoY, still had a smaller drop-off than the 360 & PS3 did in June 2013. But stock was depleted by July, and while it did get some restocks, it wasn't enough to put it where it was in the spring.

Overall, though, the PS4 & XBO had an outstanding first half of the year, and their performance is clearly due to the effects of the pandemic. To put it all in pictures:

Note that the PS3 and (to a lesser extent) the 360 got one last bump in 2013 before the PS4 & XBO were released thanks to GTA5 in September, plus the 360 got some good holiday bundles in October, which is why their sales were a bit better in September & October than in the five months prior.



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Shadow1980 said:
Dulfite said:

While I don't think 2020 would have been AS good for Switch, it would have absolutely been up YoY still. Animal Crossing was massive on the 3ds and there is no reason to think Covid alone is what made people hyped for that game. Also, if Covid-19 hadn't happened, many games that weren't able to be released in 2020 would have been released, further helping hardware sales. On top of that, the tens of millions of Americans and hundreds of millions of total humans that lost jobs during Covid would have felt more secure in spending money on unnecessary entertainment like video games.

It's easy to claim in retrospect that the Switch would have still been up regardless. But prior to the pandemic, nobody was expecting massive growth, with many expecting declines and even optimistic predictions assuming relatively modest gains at best. For example, NPD's Mat Piscatella predicted the Switch would be down YoY in the U.S., and in the NPD 2020 full-year prediction thread on ResetEra, the average of all predictions was just under 6.4M, and the best prediction was 6.9M. It ended up selling about 9M.

Animal Crossing was a known factor in January 2020, and people made their predictions accordingly. While it was going to be a system-seller, it might not have moved quite as many units (or sold quite as well in and of itself) had there been no pandemic, and losses elsewhere in the year could have negated those gains. Instead of 1M in March, the Switch might have only sold, say, 750k, but had it dropped even 5% overall for the April-Dec. period, the Switch would have been about flat overall for the year. A 10% drop for that period would result in it being down. And every indication prior to the pandemic was that the Switch was passing its peak, with YoY declines imminent. Getting to 7M would have required either March hitting 1M even without the COVID bump to assist AC (an unlikely outcome) or sales for the remaining 11 months of the year to have been at least slightly up. Nobody was expecting anything like a >10% bump in baseline sales (for reference, the Switch's sales for the May-Oct. period were up 76.8% YoY last year in the U.S., way beyond what anybody could have guessed).


Also, it's obvious that the pandemic had significant impacts on consumer spending. There have been actual professional and journalistic articles talking about the increase in spending on at-home entertainment. Google should help you find articles talking about the general increase in demand for consoles and at-home entertainment in general during the pandemic, but here's some good places to start:

https://www.ipsos.com/en-th/looking-escape-younger-people-more-likely-say-entertainment-costs-rose-covid-19
https://www.jpmorgan.com/insights/research/media-consumption
https://news.cision.com/simon-kucher---partners/r/new-study--gamers-around-the-world-are-spending-more-time-and-money-on-video-games-during-the-covid-,c3166869
https://www.bbc.com/news/business-54813841
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/demand-for-new-consoles-to-drive-gaming-industry-growth-past-pandemic-8211-analysts-62299438

And it may sound counter-intuitive, but video games appear to be recession-proof, so even when unemployment is up there appears to be no negative impacts on spending on video games. Sales of game consoles (both home and handheld) actually increased in the U.S. during the 2007-09 recession. While a lot of people have been hurt by things like the late 00s recession or the pandemic, most were still gainfully employed and had money to spend. An unemployment rate of 20% means that 80% of people are still employed, and those that were unemployed due to the pandemic, well, they were still getting income (plus in the U.S. we got those stimulus checks).

Without the pandemic, the Switch wouldn't have sold anywhere close to what it did without the pandemic. You don't get the kind of growth in baseline sales it saw under any kind of normal circumstances. Deep price cuts sometimes produce comparable growth, but rarely anything of that level, especially if the baseline was already healthy to begin with, and no single game has ever done anything like that by itself. The Switch's growth in 2020 was due to outside factors, which is corroborated by the PS4 & XBO as both also clearly demonstrated increased demand, at least as long as stock held out. The pandemic resulted in artificially increased demand for game consoles. Simple as that.

Yes, many thought the Switch would be flat or even down. They did the same as you did in posts before: look back how the Nintendo consoles peaked early and extrapolated from there.

What they didn't look at were the sales during the first 2 months of 2020, during which the Switch was outselling 2019 by a comfortable margin already, leading by over 250k after only 7 weeks. Of course, nobody expected AC:NH to become such a juggernaut, but the signs that the sales would be up in 2020 without Covid are all there already before the shit hit the fan.

Of course Covid helped; I mean, many who suddenly lost their job or had much more time at hand needed something to keep occupied (that's mainly why it's resistant to crisis), but pinning most of the rise on Covid is just wrong. Switch would have sold 24M+ even without the pandemic the way the things were going, and would probably have had a bigger holiday title without the virus delaying so much in terms of game development.



Mnementh said:

What? We were always joking about the double helix pattern in the PS4/Switch launch aligned sales comparison articles. Because they started at different times of the year they gained the lead at different times, but that they kept repeating that was because for the initial years Switch and PS4 basically sold on the same curve. Do you really think PS4 needed time to gain more traction? Because it was a new concept and people were burned coming off the PS3? I think both consoles, Switch and PS4 started off equally strong (and PS5 seems to follow that sales curve again).

The PS4 & Switch having the same curve was a coincidence, and at the regional level was only true in the U.S., and even then it didn't last.

The PS4 had a relatively flat sales curve in the U.S., at least for its first five years (for non-Nintendo consoles, Gen 8 was the flattest generation). Meanwhile, the Switch's baseline in 2018 was essentially flat, with that year being up as a whole from 2017 only because of a big YoY jump in holiday sales that year (deals like the then-new MK8DX bundle probably helped with that). But in 2019 the Switch experienced a decent amount of growth even prior to the Lite's release in September. Why the growth after the relative flatness in 2018 in the absence of any obvious stimulative factors? Increased attention could have been a factor. Something had to be causing sales to grow (and it wasn't games, because all its big hitters were Q4 releases). But despite that growth, it appeared to have stopped in early 2020. Then the pandemic hit.

Mnementh said:

I don't think that many were expecting it to be down, most people actually thought it could peak in 2020. Really, take a look:

https://gamrconnect.vgchartz.com/thread/240375/bet-your-vg-which-year-will-the-peak-year-of-the-switch/

This was mid 2019, and the majority was betting on 2020, the amount of VG$ is bigger than any other option combined. So I don't know how you can think that most were expecting it to be down (yes, you restricted it in parantheses to the US, which makes no sense because how would people expect a 2020 peak year without the US, seeing how europe is Nintendos weak spot and Japan was very fast to adopt the Switch and probably is first to peak).

Also we can compare the effect of the pandemic between systems, and see that it does about 10%-15%. So that is not nothing and it did slow down the decline of PS4 and Xbox One, but to explain Switch's more than 40% growth you need much more than the pandemic. It is more like the pandemic slightly supported an already existing momentum.

I also don't see your prediction of sales suddenly collapsing because people can go back to museums and bars coming true. It seems not unthinkable, that 2021 is actually Switch's peak year (and nearly everyone will lose the above-linked bet). You need to look at the games, not extrinsic factors to see the momentum. Like Salnax did.

That's global sales. And you are right that most weren't predicting downward sales globally. That was an error on my part (I was thinking of U.S. sales at the moment). Globally, the Switch sold something like 19M units globally in 2019 IIRC (actual sell-through, not shipped). The average prediction for 2020 here at VGC was I think around 20-21M. And the Switch could very well have been up slightly in 2020 globally.

For U.S. sales, the one prediction thread I've seen (over at Era) had an average prediction that was a bit less than what the Switch sold in 2019. I'd say the range of predictions there was pretty reasonable. At the rate it was going, the Switch's U.S. baseline was likely to be down, offset somewhat by AC giving it a bump in March (with possibly some residual effect in April), and had the pandemic not been a thing, March would have been a much smaller month (though still quite big; I think it still could've been a 700k month). The Switch was likely going to be about flat or slightly down in the U.S., at best maybe only slightly up.

Any potential YoY drops in the U.S. could have been offset by Japan, however. The Lite was a bigger deal there, causing much higher growth. Sales for the NPD-equivalent Sept. 2019 period were over triple what they were in 2018, compared to a relatively much smaller +66.8% in the U.S.; weekly average sales had also increased more than three times what they were in August in Japan, but by only 43.4% in the U.S. This translated into larger YoY gains in Q4 in Japan than in the U.S., and January & February were also indicating better momentum going into 2020, with actual YoY gains in both months instead of declines like in the U.S., so the 2020 baseline still might have been up at least a little bit even if 2020 was a normal year. And with AC still being a bigger deal in Japan (if AC's sales are anything more than 33% digital in Japan, then Japan represents probably around a third of global AC sales despite representing maybe a quarter of global Switch HW sales), March would have still been pretty huge. I think the Switch could have still crossed the 5M mark in 2020 in Japan, though I think it would have still fell well short of the 6M it actually sold in 2020.

Europe is a harder call, but if VGC figures are any indication the Switch was likely on track to track more similarly to the U.S. in terms of YoY changes than to Japan.

Also, I do think that once things go back to normal that demand for consoles will start to normalize as well. As 2020 sales were a story of artificially increased demand, it stands to reason that, when the external factors that drove said demand cease to be factors, demand will decline as spending habits return to where they were pre-pandemic. The Switch does not exist in a vacuum.

And while a good games library is important to the health of a system, there doesn't appear to be any evidence that the games lineup in a particular year affects the baseline sales of that year. If strong lineups year after year caused growth, then the PS4 should have continued to grow instead of exhibiting the flatness it did. Now, certain individual titles can cause short-term growth (usually for a month or so), and that can affect the overall balance of sales for the year, but that requires them to be significant system-sellers, and even then they can't cause long-term growth by themselves. Even with a better overall lineup in 2018 that included several big system-sellers in 2018 (Spider-Man, GoW, & RDR2 in the U.S., and MH World in Japan), the PS4 was still down from 2017. 2018 was, perhaps not coincidentally, the PS4's fifth year, just as 2021 is the Switch's fifth year. And the Switch's 2021 is unlikely to have anything as huge as Animal Crossing was. Unless Nintendo has some unannounced megaton release like Mario Kart 9, the only thing that could come anywhere close to that is maybe BotW2, assuming it releases this year.



Bofferbrauer2 said:

Yes, many thought the Switch would be flat or even down. They did the same as you did in posts before: look back how the Nintendo consoles peaked early and extrapolated from there.

What they didn't look at were the sales during the first 2 months of 2020, during which the Switch was outselling 2019 by a comfortable margin already, leading by over 250k after only 7 weeks. Of course, nobody expected AC:NH to become such a juggernaut, but the signs that the sales would be up in 2020 without Covid are all there already before the shit hit the fan.

Of course Covid helped; I mean, many who suddenly lost their job or had much more time at hand needed something to keep occupied (that's mainly why it's resistant to crisis), but pinning most of the rise on Covid is just wrong. Switch would have sold 24M+ even without the pandemic the way the things were going, and would probably have had a bigger holiday title without the virus delaying so much in terms of game development.

The Switch was down in Jan. & Feb. in the U.S., and perhaps also in Europe. It was only clearly up in Japan, likely due to the residual effects of the Lite (see my post above).

AC was going to be a system-seller, but nearly all of its effects would have been felt in March. Aside from maybe the Wii U improving in 2015 in the months following Splatoon's release, there's no good evidence that a single game can cause an increase in baseline sales lasting for months on end, and certainly nothing like a 100% increase.

Nothing ever experiences growth like what we saw without some kind of major stimulative factor. Only price cuts and new models have ever been able to do what we saw. Since there was no price cut and the Lite wasn't enough to explain the growth, and there's no way AC could have done that by itself, the pandemic had to be the cause of the overwhelming amount of the growth we've seen. Data for the PS4 & XBO corroborate the impact the pandemic had on hardware sales.

The data suggests that, absent the pandemic, the Switch would have been at best slightly up in 2021. It wouldn't have sold anywhere close to what it did in 2020 had COVID never been a thing.



Shadow1980 said:

The PS4 & Switch having the same curve was a coincidence, and at the regional level was only true in the U.S., and even then it didn't last.

The PS4 had a relatively flat sales curve in the U.S., at least for its first five years (for non-Nintendo consoles, Gen 8 was the flattest generation). Meanwhile, the Switch's baseline in 2018 was essentially flat, with that year being up as a whole from 2017 only because of a big YoY jump in holiday sales that year (deals like the then-new MK8DX bundle probably helped with that). But in 2019 the Switch experienced a decent amount of growth even prior to the Lite's release in September. Why the growth after the relative flatness in 2018 in the absence of any obvious stimulative factors? Increased attention could have been a factor. Something had to be causing sales to grow (and it wasn't games, because all its big hitters were Q4 releases). But despite that growth, it appeared to have stopped in early 2020. Then the pandemic hit.

Super Mario Party, Pokemon Let's Go, Smash Bros, and NSMB U all released within a 4 month window during late 2018-early 2019.  All of those games are in the Switch's top 10.  Yeah, it actually was games causing Switch sales to grow.

Last edited by The_Liquid_Laser - on 22 February 2021

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I'll repeat what I say in these kind of threads all the time. People have got to stop pretending Switch had a slow start. The first three years of the Switch were incredibly close to first three years of the PS4, which is considered to have sold tremendously well out the gate (rightly so too). So Switch came out swinging and then turned into an incontrollable beast in 2020.



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Norion said:
SKMBlake said:

Yeah but how come this specific situation was only profitable for the Switch and not the other 2 consoles ? How come the Switch sold almost 30 million thanks to pandemic but the PS4 and Xbox sales were 40% down ? Why people would've only spend money for buying a Switch ?

Both ran out of stock and both Sony and Microsoft felt it was more important to focus on manufacturing the new consoles than keeping up with the new increased demand for the old ones. Also the Switch was in the peak of its life while the other two were near the end and declining so the former had a much bigger boost potential since a lot of people who have bought a Switch during the pandemic will have already had a PS4 or Xbox One and a lot of people who had none of them probably picked the Switch over the other two since it was more appealing to them, for example a lot of the women who bought a Switch.

Also, a greater share of Switch units are sold to/for kids.  With everyone stuck at home, parents are happy to buy the kids a Switch to give them something to do that (this is important) doesn't require a TV.  No kids fighting over the XB/PS and TV if they each have a Switch.  No parents having to listen to kids gaminh while they're working from home if they can tell the kid to go play Switch in his room.  

Add this to the consoles lifecycles, and Switch was just in a much better position to gain market share during the pandemic.  



Nintendo consolidating their output to one platform certainly helped. Also a great concept executed well!



Shadow1980 said:
Norion said:

Both ran out of stock and both Sony and Microsoft felt it was more important to focus on manufacturing the new consoles than keeping up with the new increased demand for the old ones. Also the Switch was in the peak of its life while the other two were near the end and declining so the former had a much bigger boost potential since a lot of people who have bought a Switch during the pandemic will have already had a PS4 or Xbox One and a lot of people who had none of them probably picked the Switch over the other two since it was more appealing to them, for example a lot of the women who bought a Switch.

Pretty much this. It was the replacement year for the PS4 & XBO. There was only so much stock to go around. For example, Sony only shipped 6.2M units during the 2020 calendar year, with maybe a third of those going to North America. Combined with remaining stock from 2019, there was no way it could have continued selling what it was doing in the spring and summer for the whole year. Even without the pandemic, it still would have probably sold about the same as it did for 2020 as a whole (somewhere in the 2.1-2.3M range; we're still missing Nov.+Dec. NPD sales for last-gen). If Sony had doubled their PS4 output, they might have been able to sell upwards of 3.5M or more, but there was no point in doing so with the PS5 on the horizon.

But the data is clear. There was significantly increased demand for all systems during the pandemic. Prior to when they depleted their stock, the PS4 & XBO were performing far better than they had any right to be doing, even after the initial spike in March-April.

In the six months from March to August of last year, the PS4 alone sold 1.43M, not too far short of the 1.5M the 360 & PS3 sold combined in the same period in 2013. While the PS4 was down 9.5% overall YoY for the May-Sept. period, that's an incredibly small drop for a replacement year, far less than the YoY drops experienced by the 360 (-42.2%) and PS3 (-30%) in the same period in 2013, or by the PS2 (-19.1%) in the same period in 2007. But by October the PS4 had burned through most of its stock, and sales dropped off significantly (and were already slowing down in September). Still, it had sold 1.85M through the first three quarters of 2020, the second-best Q1-Q3 performance in a replacement year ever in the U.S., behind only the PS2, and marginally up from the same period in 2019.

The XBO meanwhile burned through its stock quicker, but was still posting far better than expected sales prior to that. In addition to the big gains in the March-May period, its sales in June, while down YoY, still had a smaller drop-off than the 360 & PS3 did in June 2013. But stock was depleted by July, and while it did get some restocks, it wasn't enough to put it where it was in the spring.

Overall, though, the PS4 & XBO had an outstanding first half of the year, and their performance is clearly due to the effects of the pandemic. To put it all in pictures:

Note that the PS3 and (to a lesser extent) the 360 got one last bump in 2013 before the PS4 & XBO were released thanks to GTA5 in September, plus the 360 got some good holiday bundles in October, which is why their sales were a bit better in September & October than in the five months prior.

You still haven't watched my youtube video about NPD you fraud! >:(



Shadow1980 said:
Bofferbrauer2 said:

Yes, many thought the Switch would be flat or even down. They did the same as you did in posts before: look back how the Nintendo consoles peaked early and extrapolated from there.

What they didn't look at were the sales during the first 2 months of 2020, during which the Switch was outselling 2019 by a comfortable margin already, leading by over 250k after only 7 weeks. Of course, nobody expected AC:NH to become such a juggernaut, but the signs that the sales would be up in 2020 without Covid are all there already before the shit hit the fan.

Of course Covid helped; I mean, many who suddenly lost their job or had much more time at hand needed something to keep occupied (that's mainly why it's resistant to crisis), but pinning most of the rise on Covid is just wrong. Switch would have sold 24M+ even without the pandemic the way the things were going, and would probably have had a bigger holiday title without the virus delaying so much in terms of game development.

The Switch was down in Jan. & Feb. in the U.S., and perhaps also in Europe. It was only clearly up in Japan, likely due to the residual effects of the Lite (see my post above).

AC was going to be a system-seller, but nearly all of its effects would have been felt in March. Aside from maybe the Wii U improving in 2015 in the months following Splatoon's release, there's no good evidence that a single game can cause an increase in baseline sales lasting for months on end, and certainly nothing like a 100% increase.

Nothing ever experiences growth like what we saw without some kind of major stimulative factor. Only price cuts and new models have ever been able to do what we saw. Since there was no price cut and the Lite wasn't enough to explain the growth, and there's no way AC could have done that by itself, the pandemic had to be the cause of the overwhelming amount of the growth we've seen. Data for the PS4 & XBO corroborate the impact the pandemic had on hardware sales.

The data suggests that, absent the pandemic, the Switch would have been at best slightly up in 2021. It wouldn't have sold anywhere close to what it did in 2020 had COVID never been a thing.

Again, you just look at US and deduce that all the rest of the world follows the same pattern.

Switch was down in the US due to not having the tail end of the SMP/PLG/Smash  triplet like 2019 had, and the fact that NSMBUD in 2019 was clearly a bigger January title from Nintendo than Tokio Mirage Sessions in 2020, which boosted January and February sales in the US in 2019. Outside of the US though, these game releases that pushed 2019 were not big enough to keep up with the increased baseline that 2020 already had before Covid and before Animal Crossing. As a result you're fooling yourself with your own data by being too selective and just looking at a snippet, looing the big picture in the process.

Also, Nintendo hold back quite some consoles for the AC:NH launch, considering it resulted in 1M sales within a month in NA alone, which combined with the shutdown of production facilities in China due to covid resulted in short supply throughout mid-to-late February. Considering how small the drop YoY was, had those factories not been affected, Switch would certainly have been up in February 2020 compared to 2019.