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Forums - Sales Discussion - The Road to 160m+ for Nintendo Switch

javi741 on 03 May 2023
Soundwave said:
Wyrdness said:

In regards to sales this is a platform in its seventh year at 124m, these are sales would be competitive for any other platforms still in their prime years well below 100m. Another point is the Switch successor would essentially be a Gen 10 platform under the usual definition the is no need to rush it out especially on the so called premise some about tech it makes better sense to let the platform carry on in order to open up more options for tech in the next one and give launch year titles more time, last time they rushed out to match tech like people said we got the chaos in the WiiU's run they're better off taking their time as they have time.

You could say the same for the PS4 before the PS5 was announced ... it was selling just fine too. 

I think there's a fundamental misunderstanding by a lot of people on how hardware design and delivery works too. 

Nintendo doesn't just sit around waiting for sales to decline to a certain point and then pick up the phone and call Nvidia and say "OK now, we need a new system, have it delivered to us in 12 months please". 

Like that's an impossible way for it to work. Beyond design time issues, beyond the obvious fact that it takes 2 1/2-3 years to have software ready, there's manufacturing issues too, you don't just show up to TSMC on a Sunday and say "well we decided now to have a new system, can you whip us up something" as if you're ordering a pizza at your uncle's corner store or fresh baked cookies from the supermarket. 

Supply lines are tight, these deals have to be set in place years in advance, not even "well 12 months in advance should be good enough". The decision on when to launch Switch successor likely was made 2-3 years ago already and deals are set in place. It can be changed a little bit but not in the way I think people here imagine. 

Also I don't think Nintendo wants to be sitting on a platform for years that is progressively selling less and less every year. They don't have two hardware lines anymore, you don't want to be in a decline phase of your business for multiple years if you don't really have to be. 

The difference between the PS4 and the Switch is that the PS4 had a legitimate competitor it needed to keep up with, which is Xbox. PS4 was selling fine but Sony didn't want to have their marketshare slip away by allowing Microsoft to get a headstart for the 9th generation. Sony didn't want to risk looking like the platform with inferior games & graphics compared to Xbox and PC just cause they wanted to stick with the PS4. The primary reason the console manufacturers release successors is not because it's necessarily more profitable to upgrade, but to keep up with their competitors in terms of the quality and performance of software produced to maintain interest in the brand.

I'm sure most companies would prefer to stick to making software for older hardware with a large install base indefinitely since they won't need to spend millions of dollars and years of work to create a new console and create a large install base from scratch, and launching a new console always brings unknown risks. 

However, console companies don't do that cause their competitors are always trying to one-up them when it comes to game quality and performance and they don't want to allow their marketshare slip due to looking outdated. This is why the PS5 released even though the PS4 was doing well because they didn't wanna allow Xbox or PC to steal their marketshare just cause Sony refused to upgrade.

Nintendo is not in Sony's situation, they have a monopoly in their own hybrid console sector they created. The release of the PS5 and Series X didnt stop people from buying the Switch like crazy, and there's no legit competitor in the handheld space and nothing looks like it could come close to competing with the Switch. This also Nintendo's 2nd biggest install base they've ever had and easily the most profitable when it comes to software sales, so I'm sure Nintendo would be ok to keep the Switch alive and their primary system for several years as long as the software sales are there, which will be due to Switch's large install base.

Yea hardware sales are dropping for the Switch but Nintendo makes most of their profit on software, so smaller hardware sales won't be a major detriment to their business as long as the software sales are there. Nintendo has no competitors to keep up with for them to release a successor anytime soon. They'd likely for now rather take advantage of the Switch's large install base and remain profitable off the software sales instead of risking releasing a new platform that's far from guaranteed to be as successful.This is what Nintendo did with the 1989 Gameboy, although it was super underpowered even going into the late-90s. Nintendo still didn't release a successor cause they had a huge monopoly on the handheld market and would've rather just stick to their current hardware.

Yes I get that consoles and manufacturing chips takes years and needs to be done years in advanced before they release the console, but that doesn't mean that just cause Nintendo is finishing up their system behind the scenes that they have to release it as soon as its finished. I'm sure Nintendo already has a good idea of what the successor will be like at this time, but they could easily just sit on the idea indefinitely until they feel it's right to release the successor.



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Kakadu18 on 03 May 2023

Yeah, we got so spoiled by high sales numbers. Below 10mil consoles shipped in a year is totally fine. Below 5mil is ok too. Maybe the Wii U didn't perform so badly after all.

/S

This fiscal year the Switch will ship below 15mil units and next fiscal year it'll be at brst at 10mil if there's no new console.
Stretch it to early 2026 would be business suicide. The hardware would be barely moving units at that point and software sales would be declining too. Software sales are already declining. There are still more system sellers that they can bring to Switch like Tomodachi and a new DK platformer or new 2D Mario platformer but with such an old console they're not going to move the needle much this late.
Third parties will have a significantly harder time brining their games to Switch. A Switch 2 would get much more support and thus more revenue and profit for Nintendo.

They definitely have a bunch of big games like a 3D Mario game in development and those would be better suited to release on the next gen Switch next year. Not in 2-3 years.

Shuntaro Furukawa very clearly said that a smooth generational transition and transitioning the current userbase and ecosystem over to the next console is vital. Waiting for that long would literally just be waiting for everyone to eventually leave.

It does not matter in any way wether anyone could consider that next console gen 10 or gen whatever. They don't care and that doesn't have anything to do with actual business.

They've been working on concepts for this next console since shortly after the Switch launched. They always work on new ideas.



Soundwave on 03 May 2023
javi741 said:
Soundwave said:

You could say the same for the PS4 before the PS5 was announced ... it was selling just fine too. 

I think there's a fundamental misunderstanding by a lot of people on how hardware design and delivery works too. 

Nintendo doesn't just sit around waiting for sales to decline to a certain point and then pick up the phone and call Nvidia and say "OK now, we need a new system, have it delivered to us in 12 months please". 

Like that's an impossible way for it to work. Beyond design time issues, beyond the obvious fact that it takes 2 1/2-3 years to have software ready, there's manufacturing issues too, you don't just show up to TSMC on a Sunday and say "well we decided now to have a new system, can you whip us up something" as if you're ordering a pizza at your uncle's corner store or fresh baked cookies from the supermarket. 

Supply lines are tight, these deals have to be set in place years in advance, not even "well 12 months in advance should be good enough". The decision on when to launch Switch successor likely was made 2-3 years ago already and deals are set in place. It can be changed a little bit but not in the way I think people here imagine. 

Also I don't think Nintendo wants to be sitting on a platform for years that is progressively selling less and less every year. They don't have two hardware lines anymore, you don't want to be in a decline phase of your business for multiple years if you don't really have to be. 

The difference between the PS4 and the Switch is that the PS4 had a legitimate competitor it needed to keep up with, which is Xbox. PS4 was selling fine but Sony didn't want to have their marketshare slip away by allowing Microsoft to get a headstart for the 9th generation. Sony didn't want to risk looking like the platform with inferior games & graphics compared to Xbox and PC just cause they wanted to stick with the PS4. The primary reason the console manufacturers release successors is not because it's necessarily more profitable to upgrade, but to keep up with their competitors in terms of the quality and performance of software produced to maintain interest in the brand.

I'm sure most companies would prefer to stick to making software for older hardware with a large install base indefinitely since they won't need to spend millions of dollars and years of work to create a new console and create a large install base from scratch, and launching a new console always brings unknown risks. 

However, console companies don't do that cause their competitors are always trying to one-up them when it comes to game quality and performance and they don't want to allow their marketshare slip due to looking outdated. This is why the PS5 released even though the PS4 was doing well because they didn't wanna allow Xbox or PC to steal their marketshare just cause Sony refused to upgrade.

Nintendo is not in Sony's situation, they have a monopoly in their own hybrid console sector they created. The release of the PS5 and Series X didnt stop people from buying the Switch like crazy, and there's no legit competitor in the handheld space and nothing looks like it could come close to competing with the Switch. This also Nintendo's 2nd biggest install base they've ever had and easily the most profitable when it comes to software sales, so I'm sure Nintendo would be ok to keep the Switch alive and their primary system for several years as long as the software sales are there, which will be due to Switch's large install base.

Yea hardware sales are dropping for the Switch but Nintendo makes most of their profit on software, so smaller hardware sales won't be a major detriment to their business as long as the software sales are there. Nintendo has no competitors to keep up with for them to release a successor anytime soon. They'd likely for now rather take advantage of the Switch's large install base and remain profitable off the software sales instead of risking releasing a new platform that's far from guaranteed to be as successful.This is what Nintendo did with the 1989 Gameboy, although it was super underpowered even going into the late-90s. Nintendo still didn't release a successor cause they had a huge monopoly on the handheld market and would've rather just stick to their current hardware.

Yes I get that consoles and manufacturing chips takes years and needs to be done years in advanced before they release the console, but that doesn't mean that just cause Nintendo is finishing up their system behind the scenes that they have to release it as soon as its finished. I'm sure Nintendo already has a good idea of what the successor will be like at this time, but they could easily just sit on the idea indefinitely until they feel it's right to release the successor.

Well a few things, software sales for the Switch are dropping too, it's not just hardware sales that are falling. 

The other thing I think that doesn't get talked about is that userbase isn't like some rock solid population that doesn't wane either. There may well be people who bought a Switch say 6 years ago who are kinda done with the system and moving on to spending more of their money on say that new PS5 they purchased or any number of other entertainment options. So even if you have say a "userbase of 120 million" ... it doesn't actually mean you effectively have that if you stretch a system's product cycle way past 6-7 years. You start to lose people at the top for example or maybe they will buy a Zelda event level game but take a pass on being active in buying software throughout the year. 

Nintendo has to pay for hardware, the hardware can't just be completed and then they can sit on it indefinitely and not pay Nvidia, I'm sure Nvidia expects to be paid. You'd also have to book your window with TSMC or Samsung or whoever to get supply lines, and if you just cancel those there is likely a penalty because you're fucking them over by telling you'd have product there and then pulling out. Production space is extremely valuable. 

I don't think it's as simple as you think it is. 

Beyond that, even for people who want to cling to 2025 or whatever ... OK, but game development now takes 2 1/2-3 years ... that means as of 2022 (which we're already well past) just to make a 2025 launch, Nintendo would have to start phasing down development of Switch 1 software to focus on Switch 2 software to have anything ready even for 2025. 

Now that ToTK has wrapped, really all of Nintendo's major studios should be working on Switch 2 content. Like today, now, I'm not talking about 1 year into the future. Really by this point they should be well into development for Switch 2 software like more than a year into development for things like the next Mario Kart. 



Kakadu18 on 03 May 2023
Soundwave said:

OK, but game development now takes 2 1/2-3 years

I agree with most of what you said, but I just want to clarify that dev times already took that long or longer for most Nintendo games during this gen. Shorter dev times like this are more for smaller games like Mario Golf or Switch Sports than something like Mario Odyssey or Animal Crossing.



Soundwave on 03 May 2023
Kakadu18 said:
Soundwave said:

OK, but game development now takes 2 1/2-3 years

I agree with most of what you said, but I just want to clarify that dev times already took that long or longer for most Nintendo games during this gen. Shorter dev times like this are more for smaller games like Mario Golf or Switch Sports than something like Mario Odyssey or Animal Crossing.

Yeah I'm being optimistic with that time frame, when you factor in also this is likely a generational hardware leap for Nintendo (really the first one since Wii U in 2012), you could be looking at 3-4 year development cycle for some of these projects.

The point is though at this point, mid-2023 most of their major internal software divisions should be making Switch 2 content and really should be have been doing that for quite some time. 

I would say since at least the COVID lockdowns were stopped in 2021. 

Mario Kart, Smash Bros., a Mario platformer, Animal Crossing honestly should all be in development for Switch 2 right now and in the hard development phase too not just the "lets sit around a table and talk ideas/concepts for the next game" phase. Zelda development for Switch 2 should have also started as ToTK was winding down (that's probably a whopping 5-6 years out). 



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Doctor_MG on 03 May 2023
Kyuu said:

1. Power and "high" price are not inherently bad or good decisions, the system you listed losing had nothing to do with being more powerful. When all other aspects are equalized, specs/features are an important advantage. If more power comes at the cost of late arrival and/or "too" high a price point, then yes, it may not be worth it. I hope you're not mistaking my argument to mean specs are more important than games, or brand power, or timing. Playstation and Nintendo primarily dominate due to their strong libraries and brand recognition. As long as they don't make serious blunders, their hardware are gonna sell well.

2. Distant past trends don't matter nearly as much as more recent trends which had PS4 and PS5 dominating Wii U and Xbox. Switch sold extremely well, but it was neither underpowered nor cheap. Had Nintendo cheapen out on the hardware, it would not have been as successful.  Yes, it's not as powerful as the PS4 or X1, but it's a handheld that covers a massive market which those two have no access to. Playstation is no longer Nintendo's direct competition.

PS4 Pro and the ONE X were late midgen upgrades with higher resolutions and little else, it's surprising enough that the ONE X seemed to perform similarly and often better than base Xbox 1 despite costing many times more (overpriced for what it was). Midgen upgrades shouldn't have as much appeal as fresh new consoles.

3. Series S's lack of a disk drive is an excuse. Series X is treated as a secondary platform by Microsoft and has been in limited production for well over 2 years, otherwise it's obviously more popular than the Series S. If its demand start to fall, that would be due to its potential consumers giving up and going for PS5 or a PC (digital only) instead.

PS5DE does outrank the standard PS5 whenever available. Like the Series X, its availability is limited (because it cost Sony more losses per unit sold, and the standard PS5 was selling out instantly everywhere for 2 years), so you're not really seeing its true potential. This isn't to say that it'd necessarily be more popular with higher availability than the disk model. After all, Playstation's playerbase is more physical biased than Xbox's.

4. The lack of dock means Switch Lite operates at lower maximum power. But yes, the lack of a feature in this case is the main reason and I didn't state the opposite. Regardless, spec and features both factor into pricing. So my main point still stands.

5. For the Switch 2, $500 (for the expensive model) should be the ceiling. The floor should be $300 (cheap model) and $400 (expensive model). Most people will gravitate towards the expensive model because, again, the average consumer is willing to spend more for more hardware compared to the old days, be it specs or features. As long as the extra specs/features are smart and justify the extra price, that's where most fans will go.

My point isn't that power causes a console to sell less, but that it doesn't significantly impact sales at all (within reason, that is). If you acknowledge that power isn't nearly as important as many other aspects of a console (like brand power, timing, price, games, features, etc), then we don't have to keep arguing. Because I'm not saying it has no influence, just that it's effect is minimal. 



Soundwave on 03 May 2023
Doctor_MG said:
Kyuu said:

1. Power and "high" price are not inherently bad or good decisions, the system you listed losing had nothing to do with being more powerful. When all other aspects are equalized, specs/features are an important advantage. If more power comes at the cost of late arrival and/or "too" high a price point, then yes, it may not be worth it. I hope you're not mistaking my argument to mean specs are more important than games, or brand power, or timing. Playstation and Nintendo primarily dominate due to their strong libraries and brand recognition. As long as they don't make serious blunders, their hardware are gonna sell well.

2. Distant past trends don't matter nearly as much as more recent trends which had PS4 and PS5 dominating Wii U and Xbox. Switch sold extremely well, but it was neither underpowered nor cheap. Had Nintendo cheapen out on the hardware, it would not have been as successful.  Yes, it's not as powerful as the PS4 or X1, but it's a handheld that covers a massive market which those two have no access to. Playstation is no longer Nintendo's direct competition.

PS4 Pro and the ONE X were late midgen upgrades with higher resolutions and little else, it's surprising enough that the ONE X seemed to perform similarly and often better than base Xbox 1 despite costing many times more (overpriced for what it was). Midgen upgrades shouldn't have as much appeal as fresh new consoles.

3. Series S's lack of a disk drive is an excuse. Series X is treated as a secondary platform by Microsoft and has been in limited production for well over 2 years, otherwise it's obviously more popular than the Series S. If its demand start to fall, that would be due to its potential consumers giving up and going for PS5 or a PC (digital only) instead.

PS5DE does outrank the standard PS5 whenever available. Like the Series X, its availability is limited (because it cost Sony more losses per unit sold, and the standard PS5 was selling out instantly everywhere for 2 years), so you're not really seeing its true potential. This isn't to say that it'd necessarily be more popular with higher availability than the disk model. After all, Playstation's playerbase is more physical biased than Xbox's.

4. The lack of dock means Switch Lite operates at lower maximum power. But yes, the lack of a feature in this case is the main reason and I didn't state the opposite. Regardless, spec and features both factor into pricing. So my main point still stands.

5. For the Switch 2, $500 (for the expensive model) should be the ceiling. The floor should be $300 (cheap model) and $400 (expensive model). Most people will gravitate towards the expensive model because, again, the average consumer is willing to spend more for more hardware compared to the old days, be it specs or features. As long as the extra specs/features are smart and justify the extra price, that's where most fans will go.

My point isn't that power causes a console to sell less, but that it doesn't significantly impact sales at all (within reason, that is). If you acknowledge that power isn't nearly as important as many other aspects of a console (like brand power, timing, price, games, features, etc), then we don't have to keep arguing. Because I'm not saying it has no influence, just that it's effect is minimal. 

What's "within reason" though ... like if the PS5 was a 5 teraflop console instead of a 10 teraflop console, I think it would have some problems for sure as XBox Series X would have notably better performance probably in basically all the major 3rd party games across the board. 



BraLoD on 03 May 2023

I'm surprised they didn't use the new Zelda to pivot their next system sales after how massively well they did with BotW.
I guess they will give the new Mario game this spot now.
Whenever the sucessor to Odyssey comes is when their next system will release, which most definitely should be next year.



Link: www.facebook.com/FernandoGuadixartworks/

Doctor_MG on 03 May 2023
Soundwave said:

What's "within reason" though ... like if the PS5 was a 5 teraflop console instead of a 10 teraflop console, I think it would have some problems for sure as XBox Series X would have notably better performance probably in basically all the major 3rd party games across the board. 

If the PS5 was a 5TFLOP console it may still sell well in comparison to the Xbox. Nevermind the argument that TFLOPS aren't great indicators of the performance of a console and just gives us a very VERY vague idea. PS2 was 6.2GFLOPS whereas the original Xbox was 20GFLOPS and the GameCube was 9.2GFLOPS. The Wii was 12GFLOPS and the 360/PS3 were around 240/230GFLOPS. 

When I say "within reason" I mean something far more exaggerative. The Switch 2 probably wouldn't do well if it isn't a significant boost over the current model since the current model is only moderately more in power to consoles almost two decades old at this point. 



Norion on 03 May 2023

I do expect the Switch 2 to be 400 since with all the inflation that'll have happened between 2017 and 2024 it being 300 would probably make it quite underpowered. They should at least match what the Switch's relative capabilities were back when it released.