Monday, December 11, 2023

Is the rage for the Nintendo Switch over? Its sales are falling and there is still no successor in sight

The sales of the nintendoswitch have suffered a sharp drop, and are expected to drop further. This was confirmed by the Japanese during the presentation of results for fiscal year 2023, which ended on March 31. The company sold almost 18 million units of your console in the aforementioned period —17.97 million to be specific—, a drop of 22.1% compared to 23.06 million in fiscal year 2022.

This means that Nintendo was far from the Switch’s original sales goal of 21 million units. But it also fell short of the revised target of 18 million consoles, announced later. Although the story does not end there: the company hopes that sales drop up to 16.5% more in the current fiscal year, which will end on March 31, 2024.

This makes it clear that the Nintendo Switch It’s already past its sales peak. and has started a logical deceleration process. Not only because it is a product that is on its way to its seventh year on the market, but because it has less and less room for growth. Let’s keep in mind that, with more than 125 million units, it is one of the best-selling video game consoles in history. Anyway, the pace of sales would be falling faster than its manufacturer anticipated.

shuntaro furukawa, the president of Nintendo, called the 2022 holiday season “disappointing”. In this sense, the executive indicated that hardware sales were negatively affected by the financial uncertainty generated by high levels of inflation, as well as by the slowness of various parts of the world to reopen after the COVID-19 pandemic.

Like the other side, games like splatoon 3 and Pokémon Scarlet/Violet, which were released in September and November 2022, respectively, were a huge sales success. Situation that would suggest that the marketing of the Nintendo Switch would be suffering due to market saturationand not because of a lack of interest from the players.

In fact, next Friday the 12th will be launched The Legend of Zelda: Tears of the Kingdomone of the most anticipated Nintendo Switch games of 2023. Its commercial expectations are enormous, but it is expected to have little impact on the sale of more units of the console. Even despite the recent launch of a special edition of the device, something quite common to celebrate its most notorious premieres.

Nintendo Switch sales are past their prime

The Nintendo Switch OLED is the best-selling model today.

Of the nearly 18 million Nintendo Switches sold between April 1, 2022 and March 31, 2023, the model with an OLED screen was the most successful. It accumulated 9.22 million units, an increase of almost 59% compared to the previous fiscal year. The standard variant was in second place with 6.14 million sold —54.7% less than in fiscal year 2022—; while 2.62 million Switch Lites were sold, 29.2% less year-on-year.

Thus, these figures only confirm the downward trend that we began to see in the period between April 2021 and March 2022. Let us bear in mind that the Nintendo Switch reached its peak in fiscal year 2021, between April 1, 2020 and March 31, 2021. In that period, the portable console sold 28.8 million units globally —20.3 million of the standard model and 8.5 million of the Switch. Lite— It was the best year for the device since its arrival on the market in March 2017.

The following table clearly shows the evolution of sales by fiscal year. It is worth clarifying that the figures were rounded for practical purposes:

(01/4/2017 – 31/03/2018)
(01/4/2018 – 31/03/2019)
(01/4/2019 – 31/03/2020)
(01/4/2020 – 31/03/2021)
(04/01/2021 – 03/31/2022)
(01/4/2022 – 31/03/2023)
nintendoswitch 15.1 million units 16.9 million units 14.8 million units 20.3 million units 13.6 million units 6.1 million units
Nintendo Switch Lite 6.2 million units 8.5 million units 3.7 million units 2.6 million units
Nintendo Switch OLED 5.8 million units 9.2 million units
Total 15.1 million units 16.9 million units 21 million units 28.8 million units 23.1 million units 18 million units

Shuntaro Furukawa himself assured in a call with investors that do not plan to release a new version or console update during the current fiscal year. This would destroy the rumors of a Nintendo Switch 2 that we would supposedly see in the coming months.

Those from Kyoto are aware that the great challenge is to maintain their console as a sales attraction, although it is not easy considering the time it has already been on the market and the penetration it has already achieved. They also said that their intention was never to put a single system in each house, but several; ideally, one for each member of the household. However, they opened up about the difficulties ahead.

“Maintaining Switch’s sales momentum will be difficult in its seventh year. Our goal of selling 15 million units this fiscal year is a bit of an exaggeration.. But we will do our best to boost demand before the holiday season so that we can achieve the target,” Furukawa said.

Nintendo Switch 2

If Nintendo does sell 15 million units of the Switch before March 31, 2024, it will still be 16.5% less than in fiscal year 2023. But the drop would not only be seen in hardware sales, but also software.

In fiscal year 2022, Nintendo Switch software (game) sales were 235.07 million units. In fiscal year 2023, meanwhile, they closed at 213.96 million; that is, 9% less. The forecast for fiscal year 2024 places them at 180 million units15.9% less compared to the figures obtained up to last March, inclusive.

With these projections on the table, it is impossible not to think that Nintendo could announce the successor to the Switch in fiscal year 2025 (April 2024 to March 2025). In fact, sources of Nikkei Asia ensure that their development “seems to be progressing well”. Although they have already clarified that a hypothetical launch will not take place before next spring, as the earliest date.

The statistics today paint a picture that seems to pave the way for Nintendo to make the expected leap towards a next-generation console sooner rather than later. Which does not imply that the Switch no longer has a thread on the reel, especially considering the loyal fan base that the Asian firm has.

However, regardless of the big releases in the pipeline —the new Zeldathe most immediate—, Nintendo Switch sales are clearly past their prime. And there is nothing to suggest that they are in a position to achieve a momentum like the one from two fiscal years ago.

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