Brokerage firm Credit Suisse has updated its sales forecast for the Nintendo Switch and has upgraded Nintendo stock from "neutral" to "outperform".
Credit Suisse had previously predicted that the Switch would sell 70 million units by 2022 - a very generous claim - but it has now elevated that number to 130 million.
Credit Suisse analyst Keiichi Yoneshima feels that the Switch - despite being both a home console and a handheld - will sell more like a traditional portable games system throughout its lifespan:
As Nintendo’s Switch is a unique game platform for use as either a console or handheld, there was initially some uncertainty over whether its sales cycle would more closely resemble that of a console or handheld. Although the Switch is currently categorized as more of a console, we expect it to sell like a handheld. Many users are in fact using the Switch as a portable according to a Famitsu survey of users. We previously projected a sales peak at about three years after launch (i.e., in FY3/19) on the assumption of a console-like sales cycle. Now that the Switch looks more likely to sell like a handheld, we update our sales forecast to reflect a longer sales cycle. We now expect the Switch to achieve peak sales about five years after launch (i.e., around FY3/20–21) like a typical handheld game device. We also raise our peak-year sales forecast from 25mn to 31mn units.
Credit Suisse also increased its target price for Nintendo shares from JPY40,000 per share to JPY55,000. Nintendo shares have gained 56 percent in value this year.