Switch

Another quarter, another round of financial reports. This morning Nintendo released its nine-month earnings figures from April to the end of December 2019 and things are looking rather rosy for the company. Switch has overtaken Super NES in terms of lifetime console units sold (an impressive feat considering it's less than three years old), Pokémon Sword and Shield sold incredibly well in its first two months on sale, and million-selling games are popping up all over the place.

With 52.48 million hardware units sold to date, Switch now sits behind only the Nintendo Entertainment System and the mighty Wii in Nintendo's home console rankings. Soon it will overtake the 61.91 million lifetime sales of the NES, although it'll take a while to catch up to Wii's 101.63 million. PlayStation 4 is doing incredibly well, too, with a staggering 106 million consoles sold – which takes it past the original PlayStation's total, although it's still a long way from PS2's chart-topping total of over 155 million.

The tweet below from analyst Daniel Ahmad shows how Switch is doing in comparison to other home consoles at the same point in their lifecycles. As you can see, it's currently tracking ahead of all consoles except the Wii:

Switch's success has come at a cost, though. Consolidating its home and handheld console lines into one unique device has paid dividends, but in doing so Nintendo has relinquished its 'backup' of a second system. While the Wii U floundered, the good ship Nintendo was kept afloat not only by its vast reserves of cash banked in the halcyon days of the Wii and DS, but also by the hard-earned, enduring success of its handheld division. 3DS may be on life support right now, but that's the result of old age and inevitability rather than any misstep – it's an absolutely fantastic console with 75.71 million unit sales to its family name.

And while Switch might be creeping up on NES and Wii, it's got plenty more competition if we add in the consoles you don't stick under your telly. Throw in the lifetime totals of Nintendo's portables and Switch is still sitting behind every Nintendo handheld that came before it. Of course, that is to be expected. Those lifetime Game Boy sales of 118.69 million units – which include Game Boy Color hardware, too – accrued over a decade or more, and Switch still hasn't reached its third birthday.

Historically, those portables have helped shore up the home console side of the business through any bumps. As the Nintendo 64 and GameCube struggled against the competition before and after the millennium, Nintendo had the incredible success of its handheld line and Pokémon to fall back on. Channelling all its resources and energies into one hybrid device has been a successful strategy after Wii U's failure, but it has meant removing a vital pillar from its traditional business model.

With Pokémon now on the 'main' console, Nintendo doesn't have its handheld backup anymore. Or does it?
With Pokémon now on the 'main' console, Nintendo doesn't have its handheld backup anymore. Or does it?

Looking back to the mid-to-late 2000s, it highlights just how extraordinary the Wii and DS days were. With both consoles at the top of their game, it was a high point in Nintendo's history that the company will struggle to replicate ever again – the pair accounted for a staggering 250 million hardware sales combined, all during what was, more or less, the same 'generation' of hardware. Both of those consoles represent peak sales in Nintendo's home and handheld console lines, with the DS 'family' selling 154.02 million units, the best-selling piece of hardware the company has ever produced. Nintendo made serious bank in that period, enough to finance multiple Wii U-style disappointments.

Nintendo's strategy with Switch Lite has worked well in keeping sales buoyant in conjunction with a solid software lineup

One key part of DS' success (and the whole portable lineup, in fact) is that notion of 'family'. The mid-cycle home console refresh is now in vogue, but Nintendo has been doing this with its handhelds for decades now. The Game Boy Pocket slimmed down the chunky original considerably and the Game Boy Color was an incredible upgrade, as was the clamshell GBA SP over the Game Boy Advance that launched in 2001.

We feel comfortable saying that there is absolutely no way Nintendo DS would have sold over 150 million units if it had retained its initial chunky 'phat' form factor. The Lite redesign and the DSi upgrade that followed refreshed the platform and massively extended its life cycle. Add to that the continual influx of themed models and it's easy to see how portables have outsold the majority of Nintendo's home consoles. How many more Wiis might have been sold if Nintendo had rejuvenated that little console with a modern-style 'Pro' variant after a few years? (Quiet down at the back with your Wii U jokes. And no, the laughable Wii Mini doesn't count.)

The promising prototype that somebody accidentally approved for full production.
The promising prototype that somebody accidentally approved for full production.

With Switch Lite, Nintendo has already launched a new SKU, one specifically designed to appeal to the dedicated handheld market it 'abandoned' to make Switch's central gimmick work. And unlike previous home consoles, it's already building its own 'family'. From April to December last year Nintendo sold 17,740,000 Switch consoles combined, with over 5 million of those being Switch Lites (which was only on sale from September, remember).

While the year-on-year sales of the standard model decreased from 14,490,000 in the corresponding 9-month period in 2018 to 12,560,000 in 2019, overall Switch sales enjoyed a 22% year-on-year increase. All of which means that Nintendo's strategy with Switch Lite has worked well in keeping sales buoyant in conjunction with a solid software lineup, and there's every reason to believe this approach will be extended with new hardware joining the family. With this in mind, the likelihood of Switch eventually toppling the Wii from its perch at the top of the Nintendo home console tree increases, although it has its work cut out for it if it wants to take on the Game Boy and DS, too.

Nintendo may have sacrificed its dedicated handheld line, but not before subbing in an even more lucrative 'backup': its ever-growing mobile business

From one perspective, it's a shame that we'll likely never again see the days of not one, but two Nintendo platforms – home and handheld consoles – firing on all cylinders. Hardware-wise, Nintendo has lost its backup pillar, although, with its impressive library and increasingly appealing online offering, Switch appears to be a very sturdy one that's gaining girth with each passing quarter.

Nintendo isn't about to be caught up a well-known creek without a paddle, though. It may have sacrificed its dedicated handheld line, but not before subbing in an even more lucrative 'backup': its ever-growing mobile business. With income from its mobile-related ventures (including royalties) reaching 36.9 billion yen (a 10.6% increase year-on-year), and with players having spent a combined $1 billion on its smartphone games, it turns out that Nintendo has a handheld-based backup after all, just in case this Switch dream comes to an abrupt halt.

There's little chance of that happening though. In this fiscal year alone, 21 Switch games – first- and third-party combined – have sold over a million copies and with loads of games arriving every week, Nintendo gamers have arguably never had it so good. It's been a slow start to 2020 so far, but with Animal Crossing on the horizon and the arrival of 2020's first Nintendo Direct inevitable, we're sure the release schedule will be overflowing before long.

The future's bright for gamers – on all platforms – so cheers to that.

Do you think Switch will eventually surpass the Wii's total hardware sales?

Do you think Switch has the legs to surpass Wii and the PlayStations by the end of its life? Will we be meeting more of the extended family before long? Share your thoughts below.