Japanese Analyst Sets Record Straight About The Sales Performance Of Switch

Stock falling is nothing to be concerned about it. It's normal for that to happen to most companies especially around this time. Why invest when nothing notable is announced or releasing soon? Switch is still selling great numbers and it'll pick up more when more titles release this year. Just a baron beginning of the year if you're not into NSMBUD.

I still don’t understand why they don’t set their targets lower and easily meet or exceed them. Imagine headlines year after year stating that Nintendo has shattered its sales expectations. Those would go over so much better than what we’re used to seeing.

I think upping the software 10 million almost makes up for it. Investers need to get a grip.

If any analyst says the Switch sold poorly in its first 8 quarters, that same analyst would have to say the PS4 was a disaster in its first 8 quarters... No analyst did or would make that claim.

@thesilverbrick for the same reason I don't set low goals for myself... It doesn't help you reach higher. High goals promote hard work and creative thinking!

I mean, you could shoot for 100 million consoles sold in a year. If you hit 80 million in a year, does that mean it’s time to cash out and run for the hills?

Launch aligned (which is the only fair way to make a comparison given the sales curve of dedicated gaming devices), Switch is even outpacing PS4, which has been the fastest selling home console of all time barring Wii and PS2 (iirc). That’s pretty amazing. And it did it without the full support of 3rd parties behind it like PS4 had in its first 2 years, with Call of Duty games and Assassins Creed games and GTAV and all that jazz to push sales. In fact, Switch practically started from ground zero with 3rd party support and has had to slowly build it and earn it month by month via continued strong sales and strong software sales for both 1st and 3rd party games.

Anyone with a modicum of logic can see that, and can then reason “well, now that it is selling so well, imagine how well it’s going to do over the next 3 years (which are typically the best selling years of a console) as all those third-party’s pile on?

But that’s the problem right there. People aren’t looking for an investment. Most people don’t “invest” in this day and age. They hustle, like a street corner drug dealer. They’re not looking for a long-term profitable company to invest in. Not at all. They’re looking for a company who is going to turn a quick buck over the next quarter or two, then they are going to cash out and look for the next one, and then the next one, and the next one. It’s like trying to make money off the currency exchange. Constantly selling one for another as the exchange rates go up and down week by week. The age of investment is over. This is the era of short-term street corner hustling.

Where are the people who said the Switch would fail?

@OmegaYato playing smash ultimate.

Stocks fluctuate when people so much as sneeze and people are always quick to jump on the doom and gloom bandwagon. But I have seen enough "the end is nigh" predictions for companies and the market overall, to make me seriously doubt any of them without some real serious long term changes or some hard physical evidence.

After seeing how Nintendo survived the Wii U era, I am convinced the company is not going anywhere unless they face a disaster worse than that. Maybe a massive fire occurs and wipes out the entire Nintendo headquarters tragically killing the majority of their staff. THEN I'd buy the idea that Nintendo might be ruined. Otherwise, naw. Not gonna happen.

And same for the wider market. Unless we have another disaster like we did in 2008, I don't imagine much happening without plenty of notice.

@OmegaYato

Why? Are you gonna have them rounded up and hung at dawn? You are just as bad as them.

“...and 32.28 million units have now shipped in the system's lifetime.”

That’s as of the end of December. It’s no doubt sold a good deal more since then. I’m curious what that number would actually be now.

@thesilverbrick you're totally right, but as we know Nintendo, while brilliant developers, have a history of odd business decisions lol

How many people in the previous sales articles are gonna not comment on this perspective.

@leo13 This is different from setting a high personal goal for yourself. Nintendo has investors to please, and failing to reach a target upsets investors. Setting a slightly lower goal and smashing past it would have made them look better.

The Switch could end up outselling the PS4 by the time It's done.

@Heavyarms55 We probably will if we see currency inflation combined with a stagnant economy.

We shouldn't get cocky. For all we know, Nintendo's next console could be a huge failure. Hence their diversity towards entertainment and establishing a relationship with IPs. And mobile games.

The Wii led to the Wii U.

@michellelynn0976 if they claim 10 years, then yes probably. However PS5 is coming soon too.

@Trajan Thankfully the economy looks really good here. I don't think that's an issue to worry about. I think Ninty set a goal to high, gonna have to agree with NL here....but the sales of the switch are impressive any way you look at it.

@Trajan The economy hasn’t been “stagnant” for some time now. It’s been kind of unstable the last year, but in general it’s grown significantly in the last five years or so. So I don’t think that’s going to hurt Switch sales anytime soon.

@BAN not now, but I've heard troubling rumors. I hope it isn't true.

@Trajan Meh. I think it’s just political scare tactics propelling those fears. In the US, at least.

@thesilverbrick it's not any different. The average person (employee) once they meet this slightly lower goal, shoot as soon as they feel certain that they will meet it, they slack off. Nintendo's management is wise to keep setting high goals. It keeps people pushing and not relaxing.

@thesilverbrick Setting low goals also spooks investors as well. Corporate success is defined by growth, and specifically, year over year growth. Setting easily attainable goals sends a message to investors that upper management is either unable or unwilling to take the risks necessary to maximize the investors' return on the money they have invested into the company. Investors only care about one thing: Maximizing their return on investment. Setting easily obtainable goals is a contradiction to what investors want out of a company, and that leads to upper management losing their jobs, along with others in the company.

@dleec8
Nintendo could have set their forecast to 17 million units from the beginning (rather than starting at 20 million and dropping it down to 17 million), and it would still represent solid year-over-year growth without reaching absurd numbers.

@thesilverbrick 'Nintendo sells two million consoles'

@hoopderscotch it doesn't matter, actually. It's 2 Christmas quarters vs. 2 Christmas quarters now, and it will be 3 vs. 3 by February 2020, with the Switch up again

I did not think anybody was worrying,the Switch is doing very well,stocks will always rise and fall...thats the nature of the business.

@westman98,

If nintendo get to 17 million then the 20 million initial forcast was not absurd,if they had only managed 10 million sales then I would agree with you that the initial target was stupid.

@johnvboy they will pass the 17M mark by march 31th quite easily, maybe 18. I think the reason why they couldn't get the 20 million is Labo not selling enough hardware, but it was not impossible

@Trajan The Switch is only closing its second year. There will probably be a refined Switch at some point but the next Nintendo console is a long ways off. Yeah it could flop. So could PS5 or Xbox Horseshoe. (because who knows what the hell Microsoft will name it.)

@johnvboy
When I mean "absurd", I mean that only 3 gaming systems have ever managed to sell-in 20 million unit during their 2nd full fiscal year on the market - the PS2, DS, and Wii.

The Switch being the 4th would have been incredible and unprecedented, given how much the industry has changed since the early-mid 2000s.

@thesilverbrick
What @dleec8 and @leo13 said. Plus, I also believe it was a matter of demonstrating strength and how much faith they have in their own product (and line-up). This is something I have felt from their presentations since the very first one in November 2016: The absolute will to show how much they believe they have created something so special and have a solid strategy behind it that it will perform extraordinarily well. Not only as a sign to investors but also one to the customers, gamers and non-gamers alike, especially after the Wii U and how it was received and noticed. Everybody questioned if they could pull it off, even Nintendo fans here on this site I might add... They've responded very strongly: Yes, we can! Watch us!

As Devil's Advocate, what I would say is investors want is honesty and security. If Nintendo are over estimating how many consoles they'll sell this year by 15%, then they drive the price up of their stock. That stock has further to fall now as it's not worth as much as everyone thought it would be. The question is can you as an investor trust Nintendo to get the figure right this year or will they over estimate? Nintendo are doing well, but are they over valuing the company?

In the long run it's better to buy modest stocks that may over perform than the big boys that can't even deliver what they promise. Same as Apple, same as Elon MUsk and Tesla.

Nintendo told the markets and investors that they would sell 20m Switches this year. Investors made decisions (i.e. how much to invest in Nintendo stock) based on this figure. Nintendo have now lowered this by 3m. That’s £840m lower revenue based on original expectations (assuming £280 unit price). That is NOT insignificant.

This is why investors are unhappy and Nintendo’s stock has devalued. Yes, 17m is still a great number, but it’s not the 20m they said at the start of the year. Seems like a reasonable response by the market to me. I’m sure the stock value will recover over time anyway.

@BAN its about 34.5M, they sold about 400k in japan in Jan and japan market is about 18% total global sales

@GravyThief yes but there is 10m extra games projected to sell at £35 average that gives back 350m, still a loss of 500m

they will sell about 18-19m by eoy, weekly average in jap is about 43K ( not including crazy xmas period )
14.49m so far +
2.1m in jan +
2.3m (43*10 )*5.35

It can be argued Nintendo was overly ambitious with their forecast and caused their stocks to fall? That’s the exact reason lol. Switch is doing very well. But if you tell the market you will sell x amount of units, you better hit that. The market has based the price of your stock on those sales. You can’t say ...oh well we still sold an impressive amount of units.

@thesilverbrick Priblem is with investors that setting too low a goal would worry them to. If you dont expect to sell many, or at least lie to them about expectations to make your eventual results look better, not only would you turn them away, and thus hurt yourself because they think youve got a week year coming, but youd also open yourself up to a legal battle by deceiving investors.

Lose lose situation.

While I agree that the Switch isn't in any trouble selling, I do wonder how the graph will look with the 9th quarter added.

It's not immediately obvious (and not mentioned in the report) that the PS4's Christmas quarters are 1 and 5. In Japan the PS4 was even released three months late, in February 2014, so Japanese readers may be more easily misled into the assumption that Q4 and Q8 were Christmas quarters for both consoles.

It seems the PS4's 9-quarter total was 29.3+8.4=37.7 million, and averaging the earlier non-Christmas Switch quarters, the Switch 9-quarter total could be set to end around 32.28+2.60=34.88 million, so by 'Q9' Sony will be back in the lead.

I guess it just goes to show Christmas really is a good time for sales.

@GravyThief stop making sense. I’m no stock market expert, but this is as basic as it gets. Yet you keep seeing people state how great the sales numbers are.

@leo13 It is different. If you miss a personal goal, you only let yourself down. Missing a sales target causes the value of your entire company to sink when shareholders are let down.

@dleec8 @Knuckles-Fajita Setting a goal of 15 million units wouldn’t have been a disappointing number at all, and they would’ve been able to brag about smashing past that number instead of falling short.

I just assumed they had dropped their forecasts due to Brexit fallout.

Hell, most fans were sayin' the same thing. 20 million was just too much! I said it myself on here when they first said it🤔

@hoopderscotch seems like an unfair comparison, since the ninth quarter will show 3 holiday seasons for PS4 while only 2 for the Switch. The next fair comparison mark will be after 12 quarters, to show not only an equal amount of time, but the same amount of holiday seasons.

@JaxonH Spot on. I would like that 100x if I could.

Worse, at the large scale it's beyond hustle. It's about entire companies that exist for no other purpose but to siphon and extract absolutely all value out of absolutely all other companies, using their reserves and credit, plus every loophole to make spending money and credit where none exists to gobble everything else to extract the value out of that as well. These companies then masquerade as "funds" from which, what used to be people's pensions, are now their "investment funds" that they're supposed to live on for retirement, so the public ignores their behavior since they're dependent on it.

As with all things, there's only one place this ends.

@thesilverbrick by doing so you undervalue your company and after so many quarters investors catch on also it may be illegal to purposfully lower your goals with the intent to influence your stock price.

@electrolite77 That would’ve been a reasonable (if not very low) prediction if it was any other console that had a new DK game, a new Mario Kart, a new Bayonetta, and Smash Bros. But, it was the Wii U and I don’t think anything could have saved that console after the PS4 and XB1 came onto the market.

@Almighty-Koz I’m not suggesting they dramatically underexaggerate their sales targets. I mean they should set realistically attainable goals they know they can meet. I don’t believe Nintendo has successfully met its annual sales targets in years. It ruins investor confidence when they can’t even accurately predict what they will sell. Coming up short year after year only ruins their image.

@thesilverbrick you assume that if they had set the goal at 15 million they would have still achieved the same 17 million where I assume they would have sold LESS because they would have had a lower goal and they wouldn't have work as hard to try and eek out everything they could in an attempt to hit that 20. If they set a goal of 15 million and sell 15.5 million THAT'S WORSE than setting a goal of 20 million and selling 17 million regardless of what idiot investors think

@leo13 While I agree, technically it does mean they suck at analyzing their own business, and investors pick up on that. The unrealistic ideal is to generally be on target with your predictions on average, some years you overestimate and under-perform, some years you underestimate and over-perform, so your estimates are generally grounded at a likely center point, the median comes out to being accurate.

Nintendo consistently and exclusively overestimates and underperforms, which does actually look bad. It looks like they either invent pie in the sky numbers which mean nothing, or overestimate their actual market consistently rather than just sometimes estimating wrong.

However for "goal setting" I don't disagree with you, I'm not sure the "shoot excessively for goals you know you probably can't meet just to push yourself" is really a good or healthy solution either, regardless of what motivational speakers will tell you.

@leo13 Setting a lower sales goal does not mean you work less diligently. Internally, they can shoot for the moon, but telling investors they plan on selling 20 million units and coming up short looks bad. Case in point, a sales figure of 17 million is actually pretty great, but the headline here is that they came up short. What should have been good news is now a disappointment because they aimed so high.

@electrolite77 @Mrtoad WiiU was such a disaster on so many levels I don't think you could ever reproduce that disaster quite the same way. It wasn't a bad product by any stretch that failed on it's own merits. It was this odd perfect storm of where Nintendo had been previously, where they were now, how they communictated it, what the competition was doing, what the industry was changing, where consumer tech was, where the economy was, and where early issues set customer expectations and perceptions. There was no one thing or even several things that doomed it, and it wasn't a product that on its own ought to have been doomed.....but EVERYTHING came together at once to doom it in the first 6 months.

@electrolite77 Thanks for the correction, 2013 had an alright line up, but after holiday 2012 there was no chance that the Wii U would've been able to succeed.

Almost 10 million Switch units shipped out from October through December, to meet holiday demand?

Smash Bros. ain't no joke.

@electrolite77 I still don't subscribe to "a central idea people didn't want" idea. Tablets were popular. Phones were popular. DS which it was based on was crazy popular. The implementation was a bit off, but the concept wasn't inherently unpopular. WHO they tried to sell it to, however, was a colossal error. They tried recreating the Wii market assuming they were now groomed for proper gaming That was a serious initial falter along with the disastrous communications. PS4/X1 put the final nail in the coffin but it already assembled the box by then with some "help" from EA.

They only pivoted to "console quality gaming on the go" when the market picked up on that feature early on and Nintendo had nothing to little to show for the dual screen use, 3DS style they really wanted to push. I still feel like Rayman Legends skipping the initial launch window did tremendous damage to the perception of the gamepad's use. If it left the gates in a more suitable fashion, I feel like it could have cemented a game niche, of DS type gaming at home, and the use of 2 screen gaming in bigger games (inventories, maps etc) which Sony and MS were already bracing for along with Ubi. The other mistakes killed a cool concept that even the big players thought would catch on.

Investers are people, people are idiots in general.

@SetupDisk comparing Apples to Oranges doesn't work. Only Trolls would make such poor comparisons.

@SwitchForce
So investors are not people, gotcha.

@JaxonH great analysis . With all this Switch success I want Capcom to show us some more love and give us an exclusive Resident Evil game.

@electrolite77 The sheep of the public demand whatever they're convincingly told to demand. People would have eagerly demanded a second screen for maps and inventory and such - objectively it actually is a superior interface all the way around. PC gamers have hated for ages that only a handful of strategy games have ever made use of multiple monitors for that exact function. Supreme Commander was a beautiful thing. Ubisoft, Microsoft, EA all got into the second screen thing, using your tablet or phone. Smartglass was a buzzword. Sony introduced PS4 revolving around the Vita as a second screen. The whole industry presumed second screen gaming was about to take off and tried to head it off with their own implementation. I think if the message was strong, solid and consistent, PS5 would be rumored to have an even bigger screen controller than WiiU. But alas, Nintendo blew the marketing, unsure what they wanted from it, let their competitors run the narrative with the status quo, and we lost the second screen probably forever. Which is a shame....because it genuinely is a superior interface for inventory heavy games (switching to the map on the main screen is no big deal but inventory was beautifully solved with it, and we're in an era where "every" game is an RPG.)

That was blown messaging for a good concept pure and simple there. Much to the surprise/delight of competitors. Off-TV...yeah, in the beginning it was a mess, with games supporting it optionally or not, and no uniform way to activate it. After the beginning that got a lot more consistent, but that was after the core idea was already blown.

@electrolite77 "gamers" tend to dislike anything new put in front of them until the adapt to it, and then they don't want anything different from that. Objectively it provides more information, simultaneously, in dedicated space, with much more rapid absolute position rather than relative interface interaction for things such as inventory. Objectively absolute position is better than relative position, full stop. Now do gamers scoff at change? yes...that's another matter.

I think that's chicken and egg. I think Sony and MS were doing a "me too" move to copy WiiU's main featureset to not get left behind as they did on motion. But Nintendo flubbed it. And the taint of WiiU soiled the whole concept in general so it never took off on the hackneyed implementations elsewhere.

Consumers don't have a demand for something until it's put in front of them. If we were to rely on "gamers" we'd still be using 2 buttons and a D-Pad.

I still say the idea was sound, and absolutely could have had a place, but Nintendo blew it (badly) and that soiled the industry on it. Much like Nintendo's attempt at "VR" set the VR industry back a decade when it imploded spectacularly