No, Nintendo Will Not Sell 20 Million Units of Nintendo Switch This Financial Year

Nintendo has set an ambitious target for itself, one that I am not sure they can actually meet.

Posted By | On 03rd, Nov. 2018 Under Article, Editorials | Follow This Author @Pramath1605


Nintendo’s goal for the Switch this year is a lofty one—they want to sell 20 million units of the console this financial year. To be very clear, this doesn’t mean they want the console to reach 20 million units in lifetime sales this year—that has already been achieved, with the Switch’s almost 23 million units in lifetime sales standing above even the GameCube now. No, it means, very clearly and explicitly, that between April 1 2018 and March 31 2019, they want to sell 20 million units of the Nintendo Switch.

That is… an incredible forecast. It’s very ambitious, and especially for a console in just its second year, it would be almost unprecedented  With the cadence of releases Nintendo had for the Switch last year, there was reason to believe that the console might actually hit those numbers this year, when then Nintendo President Tatsumi Kimishima first brought the notion up. If Nintendo could keep up a similar pace of releases as in 2017, after all, the console’s sales would surely keep along their then current path too, and we could expect the Switch to sell a lot. Especially since some of Nintendo’s biggest heavy hitters were yet to launch.

Octopath Traveler

"There haven’t been many major releases for the Switch this year—a smattering of great ports, from third parties and Nintendo alike, and some incredible indie games, but not many major retail releases."

The thing is, that didn’t happen. The Switch has continued to sell well, but the pace hasn’t accelerated along the trajectory one might have assumed at the end of last year. This has largely been because of a very quiet year two for the console. There haven’t been many major releases for the Switch this year—a smattering of great ports, from third parties and Nintendo alike, and some incredible indie games, but not many major retail releases. Octopath Traveler and Fortnite are probably the biggest mass market launches the Switch had until October the entire fiscal year. And those are great games, but Octopath is ultimately a turn based JRPG with a cap on its sales, and Fortnite runs on a toaster at this point. They won’t push sales like Mario, Mario Kart, Splatoon, or Zelda would.

The result of all this has been that in the first six months of this fiscal year, the Switch has sold 5.03 million units—up year on year, yes, but that means Nintendo now needs to sell an eye watering 15 million units in the next six months. Yes, those six months include the upcoming Holiday season, traditionally when Nintendo does best, but they would have to have a literally record setting Holiday shopping season, selling more than any system, handheld or console, has done, to be able to reach that lofty 20 million number.

Many think that it should not be out of reach for Nintendo. After all, their Holiday lineup is strong—it is strong. While the front half of the year has been barren as far as meaningful new releases go, the last few months are going to see Super Mario Party, Pokemon Let’s Go, Super Smash Bros. Ultimate, and New Super Mario Bros. U DX one after the other. It’s an enviable slate of games, all of them with immense mass market appeal, and more importantly, it includes Pokemon and Super Smash Bros. The former is the biggest media franchise of all time, while the latter is one of Nintendo’s biggest hardware movers. Obviously this means they are set, right?

Pokemon Let's Go Pikachu

"While the front half of the year has been barren as far as meaningful new releases go, the last few months are going to see Super Mario Party, Pokemon Let’s Go, Super Smash Bros. Ultimate, and New Super Mario Bros. U DX one after the other. It’s an enviable slate of games, all of them with immense mass market appeal, and more importantly, it includes Pokemon and Super Smash Bros. "

Well, no, not really. There are caveats to the whole thing. Super Smash Bros. Ultimate is, of course, looking to be an extraordinarily strong title so far, but Pokemon this year is not the Pokemon. It’s a smaller scale, pared back spin off coming while we wait for the true Pokemon 8 to come out next year. Pokemon Let’s Go’s design decisions, which have included culling wild Pokemon battles, excluding any beyond the original Pokemon, and several other choices which make the game far less nuanced than the mainline games, have evoked a vicious outcry from fans. All of this has been done in an attempt to go after the Pokemon GO playing crowd.

Now, in the end, Pokemon Let’s Go looks to be a great game for what it is, and will obviously sell well by virtue of being Pokemon. But unless a significant number of people who play Pokemon GO casually on the smartphone they already own for free are convinced to spend $300 on a Switch, and then $60 on the game, it’s not going to induce people to pick up the system. Hardcore Pokemon fans who do not yet own the Switch won’t be getting it for Let’s Go either—as mentioned, the game has done everything it can to alienate them, and they’re probably waiting for next year’s title before they jump in.

So Smash looks great—but it can’t carry the Switch to this target by itself. While Mario Party, NSMBU, and Pokemon will all contribute some to the overall sales, they aren’t enough to take the Switch to 20 million. If this was a mainline Pokemon  game coming alongside Smash Bros., I would have easily argued that this target can be met without issue. But it’s not, and that means the target is now more out of reach than it otherwise would have been. The situation is further exacerbated because there were at least two major games that were due to hit the Switch in 2018–Yoshi’s Crafted World and Fire Emblem Three Houses. Both got delayed to 2019. I don’t know how much they individually would have managed to sell the Switch, but their delay can’t have helped, as it puts even more pressure on Smash and a very divisive Pokemon game to perform.

"Smash looks great—but it can’t carry the Switch to this target by itself. While Mario Party, NSMBU, and Pokemon will all contribute some to the overall sales, they aren’t enough to take the Switch to 20 million. If this was a mainline Pokemon  game coming alongside Smash Bros., I would have easily argued that this target can be met without issue. But it’s not, and that means the target is now more out of reach than it otherwise would have been."

It is also clear Nintendo was hoping for Labo to take off, and expand the Switch’s appeal among the expanded, casual audience, the kind who originally picked up the DS and Wii. That has so far not happened. The Labo has sold a few million across the multiple kits Nintendo has put out, but it has failed to broaden the Switch’s appeal beyond the core gamer, and failed to drive hardware sales too. There is every possibility the Labo suddenly takes off this Holiday season, as parents look to buy consoles for their children—in which case all bets would be off. But would they do that when they could, for instance, get their kids a PS4 for $200 with Spider-Man included?

Which brings me to the next point. Nintendo does not have any meaningful Black Friday deals lined up, which are what primarily drive spending in the Holiday shopping season. Yes, they have a $300 bundle with Mario Kart 8 Deluxe, and that’s fantastic, it will sell a lot. But there’s no price cut here. Sony is offering one of its newest games and their console for $100 cheaper than Nintendo is offering the Switch. Mario Kart 8 Deluxe has far more market appeal than Spider-Man, of course, and that helps immensely, but in the end, price is king on Black Friday, and $200 is a better price than $300 is. Unless Nintendo announces a price cut, the PS4 will poach a lot of their sales this Holiday season.

The counter argument to all my points so far is that Nintendo has not reduced their financial forecast this year so far. In fact, during the financial statement they released just this week, they reiterated the 20 million units projection. Surely, then, they expect to be able to sell this amount, even with the extenuating factors I have identified? The answer to that is, no, not necessarily. Projections are made to investors, and investor confidence is paramount to keep your stock price high. If Nintendo were to reduce their projection right on the eve of the Holiday season, investors would panic and off-load Nintendo stock, leading to a catastrophic contraction in their trading price. Traditionally, this is why Nintendo has not revised its guidance downwards until after the Holiday shopping season. Even in the Wii U era, they would not revise their targets until the final quarter of the fiscal year, if it was necessary. I fully expect to see Nintendo similarly revise targets downward in their January report.

Nintendo Switch

"Do I mean to imply the Switch is doomed? No, of course not. I foresee it doing very well regardless. It will probably sell 17-18 million units all said and done, which would be right in line with the PS4’s second year, and within very close distance of the forecast. I imagine the 20 million units sold forecast is something Nintendo is well primed to meet next year too, with a better lineup."

What does all of this mean? Do I mean to imply the Switch is doomed? No, of course not. I foresee it doing very well regardless. It will probably sell 17-18 million units all said and done, which would be right in line with the PS4’s second year, and within very close distance of the forecast. I imagine the 20 million units sold forecast is something Nintendo is well primed to meet next year too, with a better lineup. On the whole, the Switch is doing great and will continue to do great, even if the 20 million target is not met.

And, of course, there’s a possibility it is. Maybe I’m wrong. Maybe Pokemon Let’s Go takes off. Maybe Labo sales explode. Maybe Smash Ultimate drives more sales than anyone could have anticipated. Maybe Animal Crossing for Switch launches by early March, which means it gets a sudden last minute boost before the end of the fiscal year. Who knows? You can never tell with Nintendo. As things stand right now, though, based on what we know, 20 million this fiscal year seems unlikely.

That doesn’t mean the Switch is doomed. It’ll do fantastically well anyway. It just means Nintendo overshot a bit with how much they expected to sell.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.


Awesome Stuff that you might be interested in


More From GamingBolt

Keep On Reading

 

Copyright © 2009-2018 GamingBolt.com. All Rights Reserved.