Switcheroo

What’s going on?

Nintendo faced the music on Tuesday, acknowledging the tide’s turned for its Switch consoles.

What does this mean?

The Nintendo Switch has long had the gaming world in its thrall, and the trusty console brings in over 90% of sales for the Japanese giant. But even the brightest stars must eventually dim – and the Switch isn’t shining like it used to. Nintendo slashed its forecast twice last year, and despite launching some record-breaking games, holiday console sales weren’t the festive feast it hoped for. If that’s a hint, then the stats drive the point home: Nintendo sold 18 million consoles last financial year, a 22% drop from the year before. That hit both revenue and profit – and the firm’s admitted that its forecast for the current financial year, at just 15 million consoles, could be a long shot.

Why should I care?

The bigger picture: Game on.

The ups and downs of Nintendo’s consoles are nothing new – and after six years on the market, with a few makeovers and updates, it’s no surprise we’ve passed “peak Switch”. That means Nintendo’s facing a true challenge: coming up with a superstar successor that can take up the torch and rake in sales as the Switch wanes. Let’s just hope the firm has learned a thing or two from the famous flop of the Wii U, its unloved follow-up to the wildly successful Wii… 

For markets: Super Smash Bros’ smash hit.

A new console’s unlikely to see the light of day for at least another year, and analysts are predicting a downhill slide for Nintendo’s valuation until then. In the meantime, the firm needs to keep the dough coming in from its 114 million annual paying users – something its lineup of world-famous characters should help with. Plus, with the sweet box-office success of The Super Mario Bros. film, it might just be on the cusp of a new little gold mine.

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Originally Posted May 9, 2023 – Switcheroo