Analysts believe Nintendo will struggle to maintain its hybrid console’s impressive first year performance.
The Switch surpassed all sales expectations when it launched in March of 2017, and has since then continued to perform very well, having already sold over 22 million units. However, Nintendo has some very lofty ambitions for the system’s second financial year as well, with targets of a total of 20 million units sold in the period, which, in spite of sales that seem to have slowed down, is a figure the publisher continues to stand by.
According to a number of analysts in a report by Bloomberg, however, the Switch will fail to hit that target, and its decidedly slower second year on the market is indicative of the fact that without more attractive releases and maybe even price cuts, the system’s sales won’t be at the level that Nintendo may have initially hoped for.
“All great consoles need a great second year, and Nintendo hasn’t delivered one for the Switch,” says analyst Cornelio Ash of the firm William O’Neil & Co. “Investors thought over five years they could sell maybe 90 million units. But after this year, that’s looking pretty much impossible.”
Ash points out that stock values for Nintendo have dropped back to the level they were at before the Switch first launched, which he believes doesn’t spell good things for the company’s future. “The stock is heading back to the level when the Switch was announced, which doesn’t say great things about its long-term prospects.”
“The Switch excitement has rapidly declined,” Ash further said. “Unless there’s significant change or something else new, the Switch story has been exhausted.”
Meanwhile, Wedbush Securities analyst Michael Pachter, who has been vocal about his skepticism regarding Nintendo’s expectations for the Switch’s second year sales, says that 2018 has been a “reality check” for Nintendo. “2018 was a reality check and brought lofty expectations back down to Earth. The Switch is great, but is still primarily a handheld, and a very expensive one.”
“I don’t see sales growing unless the price is reduced to below US$200,” Pachter said, echoing similar statements he’s made in the past. Conversely, the Credit Suisse Group AG feels that there is a strong likelihood that Nintendo releases the long-rumoured new version of the Switch in 2019, which could end up driving sales for the system.
It’s worth noting that Nintendo’s output of games in 2018 has been significantly lower than what we saw from the publisher in the Switch’s debut year. As opposed to the likes of The Legend of Zelda: Breath of the Wild, Super Mario Odyssey, Splatoon 2, Mario Kart 8 Deluxe, and Xenoblade Chronicles 2 in 2017, so far Pokemon Let’s Go, Pikachu! and Let’s Go, Eevee! has been the only notable new first party release for the Switch in 2018.
That said, Pokemon Let’s Go has been driving sales for the platform significantly in both Japan and the United States, while the imminent launch of Super Smash Bros. Ultimate is bound to do the same. It’s also worth noting that the Holiday season is usually when Nintendo’s hardware is at its strongest in terms of sales, which, combined with Pokemon and Smash, might result in improved sales.
Next year is looking much more promising for Switch owners in terms of exclusive games. The likes of Fire Emblem: Three Houses and Animal Crossing have been confirmed for a 2019 launch, while there’s a high possibility that both Bayonetta 3 and Metroid Prime 4 release in 2019 as well.