Key Takeaways
1. The console market is experiencing declining sales, affecting key players like Nintendo and Sony.
2. Nintendo is considering launching the Switch 2 in June to capitalize on slowing PS4 and PS5 sales.
3. Adequate stock management is crucial for the Switch 2’s success, with projections of selling over six million units in its first quarter.
4. The competitive landscape includes the upcoming PlayStation 6, making it important for Nintendo to establish strong sales for the Switch 2 before its launch.
5. Financial constraints may limit consumers’ ability to own multiple consoles, influencing Nintendo’s strategy for the Switch 2.
An analyst from Toyo Securities has written a fascinating piece regarding the Nintendo Switch 2 and the PlayStation 6 for the Japan Edition of the popular GamesIndustry.biz site. Hideki Yasuda, the author, notes that the situation does not appear to be very bright for some key players in the console market right now, as their systems are all experiencing “declining phases” in sales (see first chart below). This includes consoles like the Nintendo Wii, Switch, and DS, along with Sony’s PS4 and PS5. To capitalize on the slowing sales of the PS4 and PS5, and to keep the arrival of the PS6 at bay, it is suggested that Nintendo will flood the market with the Switch 2 console.
Timing of the Switch 2 Launch
It is thought to be quite risky for Nintendo to unveil the Switch 2 outside of a major holiday season, with June being mentioned as a strong possibility for its release. However, since the PS5 Pro hasn’t significantly boosted PS5 sales as Sony anticipated, and with other consoles also seeing sales declines, this might actually be the perfect opportunity for Nintendo to introduce its next console (the original Switch is still available on Amazon). With the PlayStation 6 expected to launch in either 2027 or 2028, Nintendo should have ample time to establish a solid sales record for its new generation console.
Stock Management and Sales Projections
For Nintendo to succeed, it must ensure it has enough stock to meet the initial and continued demand for the Switch 2. As many are aware, stock shortages were a major issue during the launch of the PlayStation 5, and Nintendo would definitely want to avoid a similar predicament. Yasuda indicates that Nintendo’s inventory looks quite robust at this time (see second chart below), showing a noticeable increase in stock numbers over recent quarters. In fact, the analyst believes that with adequate inventory, sales of the Nintendo Switch 2 could hit six million units in its first quarter and may even exceed that number. This could potentially allow the hybrid console to reach the forecasted 20 million+ unit sales within its first year.
The Competitive Landscape
It’s quite unusual to consider that the real competition for the Nintendo Switch 2 might be with the PlayStation 6, but Yasuda seems to think that the PS6 is one of the factors that makes it vital for Nintendo to ensure a well-stocked launch for the Switch 2. Clearly, there is a certain prestige in being the maker of the world’s top-selling console; nevertheless, as financial constraints tighten globally, the idea of owning multiple consoles like an Xbox and a Switch, or a PlayStation and a Switch, or a PC and a Switch may become less practical. Given this context, Nintendo would likely welcome high sales figures for the Switch 2 prior to the PS6 entering a fiercely competitive market.
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