While most eyes are fixed on the GameStop stock situation, an equally interesting video game finance story happened today when Nintendo released their latest financial reports.
There’s quite a lot to break down from those reports, but if you’re looking for the headline or biggest takeaway, then here it is:
While few people would have guessed that the Nintendo Switch was anything but a success, the actual numbers remain stunning. The Nintendo Switch isn’t just a success; it’s a potentially historic device that will likely end up ranking high among the best-selling video game consoles of all-time.
Perhaps more importantly, the Nintendo Switch may have set a sales pace that the PlayStation 5 and Xbox Series X will simply be unable to catch. That may sound impossible given how hard it is to find either high-profile next-gen console, but these key takeaways from the latest financial reports show that the Switch’s success in the console wars may be inevitable.
Nintendo Switch Remains the Most Appealing “Other” Console
The line between Xbox and PlayStation hasn’t disappeared, but it has blurred to the point where owning both consoles feels like less of a necessity than it may have been in previous generations. This is especially true for gamers who typically stick to major third-party releases and free-to-play titles that offer few exclusive benefits between consoles.
The Switch is different. It was essentially released between console generations, which means that many gamers purchased one before they ever considered buying what would eventually become the PS5 and Xbox Series X/S. The benefits of that early release were especially apparent during the COVID-19 pandemic when the Switch became a hot item to add to the homes many of us were stuck in while Sony and Microsoft were still trying to get their consoles on the market.
We see this trend essentially confirmed by Nintendo’s historically impressive Q3 2020 numbers. Despite the fact that the Switch was competing against the release of the Xbox Series X/S and PS5 (as well as major releases like Assassin’s Creed Valhalla, Cyberpunk 2077, and Call of Duty Black Ops: Cold War that are unavailable on Nintendo’s console), Nintendo posted one of their best Q3’s ever and the best holiday season in Switch history from a revenue standpoint.
That strongly suggests that even those who don’t already own a Switch alongside their PC, Xbox, or PlayStation either still intend to buy one or are continuing to rely on the Switch as their primary game console
Nintendo is Able to Make the Most of its Limited Releases
Nintendo was widely criticized for its lack of 2020 Switch exclusives. While the Switch’s somewhat lacking lineup can partially be attributed to the impact of the COVID-19 pandemic, most fans went into the year suspecting that it was going to be a relatively slow year for the console.
Yet, the Switch’s weaker lineup of exclusives seemingly didn’t impact its sales in any notable way. Why? Well, a big part of it has to do with how successful Nintendo’s DLC releases have been thus far. Nintendo was late to the DLC game, but the numbers clearly show that fans spend a lot of time and money with whatever new Nintendo games are released.
That success absolutely matters in an industry where so much revenue comes from DLC, but at a time when new content is still being delayed by the COVID-19 pandemic and the increasingly longer development cycles of major games, Nintendo has proven that they’re one of the best at maximizing the value of individual releases through downloadable content.
Granted, they’ve got a long way to go (where is my Mario Party DLC?), but they can only improve upon what are some shocking numbers.
Nintendo Switch Lite Could Easily be the Most Successful Budget Console
I found it interesting that Sony and Microsoft decided to release “secondary” versions of their main next-gen consoles (the PlayStation 5 Digital Edition and Xbox Series S, respectively). Their attempts to offer a “budget” next-gen option feels not only feel valuable during tough times but reminded me of the Nintendo Switch Lite: a console I haven’t really heard a lot about since it was released in 2019.
As it turns out, the Nintendo Switch Lite has been doing very well. In fact, there is a chance that the Nintendo Switch Lite alone will have outsold the Wii U by the time you read this.
That information tells us two very important things. First off, while we don’t know how successful the PS5 Digital Edition and Xbox Series S will be in the long-run, Nintendo has already proven that the Switch brand is strong enough to support two pieces of hardware without negatively impacting the overall success of the brand.
More importantly, the success of the Switch Lite shows that even when you remove one of the Switch’s core pieces of functionality (the ability to play games on a TV as well as in handheld mode), people will still buy it. That leads us to the most important element of the Nintendo Switch’s success…
Nintendo Switch Still Has the Most Impactful Exclusives
I truly believe we’re entering an age where streaming services, cloud gaming, and other features designed to allow people to better access a wider variety of titles at a fair price will be more impactful than exclusives alone. However, we’re not at that point yet.
At a time when exclusives do still matter, Nintendo has proven time and time again that they regularly release the most impactful exclusives. Since 2017, two Nintendo Switch exclusives have sold over 30 million units, six have sold over 20 million units, nearly 10 have sold over 10 million, and 36 Nintendo exclusive releases have sold over 1 million units.
By comparison, only one PS4 exclusive has sold over 20 million units on record (Marvel’s Spider-Man) and only one Xbox One exclusive (Halo 5) has sold over 8 million units.
If you buy into the idea that exclusives still sell consoles, then it’s clear Nintendo is on another level in terms of exclusive sales. This all feeds into the idea that there is clearly a lot of people out there who feel they have to own a Nintendo Switch for at least one game.
Nintendo Switch is Remarkably Immune From Nintendo’s Mistakes
We’ve spoken about it before, but it’s hardly a stretch to suggest that Nintendo does things their own way. While that’s sometimes a good thing, it also results in Nintendo making some very stupid decisions.
Here’s what’s really interesting, though. If you look at the pure numbers, it seems that Nintendo’s biggest mistakes have very little impact on the Nintendo Switch.
Do you hate how Nintendo Switch Online features a limited library of classic titles? Nintendo Switch Online is a proven money maker. Were you annoyed by Super Mario 3D All-Stars’ limited release structure? It’s already sold over 8 million units. Did you think that Pokemon’s long-awaited Switch debut failed to live up to expectations? Well, Sword and Shield are already the best-selling Pokemon games since Gold and Silver.
Even the infamous issues with the Nintendo Switch Joy-Cons doesn’t seem to have impacted the Switch’s hardware sales in a meaningful way. The Switch just keeps trucking along.
There’s just no clear indication that the Switch’s historic success will be slowed down by anything but the release of a new Nintendo console or some magical turning point when everyone who owns a Switch will have already bought one.