Checking in with Nintendo Switch

In spite of Nintendo Switch's really good sales last year, I'm on record as being skeptical about the system's "legs." Sure, the system surged ahead in the holiday quarter of 2017, but they still didn't manage to out-sell the console sales leading PS4, and 2018 was off to a slow start. A lacklustre showing at E3 seemed unlikely to help, either, taking the wind out of the Switch's sales at a time when Nintendo should have been doubling down on their 2017 success.

Which is why I'm not particularly surprised to learn that the Switch's last-quarter sales are down compared to the same period of last year, as reported by GameSpot:

Nintendo has shared its financial earnings for the first quarter of the current fiscal year, and the Nintendo Switch continues to perform well. The company reports it has sold another 1.88 million Switch consoles worldwide during the period from April through June, bringing the system's total sales up to 19.6 million.

While that represents a slight decrease in Switch hardware sales from the same period last year (down 4.4% year-on-year), software sales grew by more than 120% year-on-year, with 17.96 million units sold during the quarter. Digital sales of packaged Switch games and DLC also grew by 68% from the same period last year.

This is noteworthy for a couple of reasons.

1. Nintendo spent most of last year struggling with production issues which limited the number of Switch consoles available for sale. Not only did they claim to have solved that problem last year, Nintendo claimed to be ramping up production even more for this year, which means that last quarter's slow sales can't be blamed on a Switch shortage. It's not 2017 anymore; there are lots of Switches on shelves. Consumers just aren't buying them.
2. Although 1.88 million units sold isn't at all bad, it's still well short of the 3.2 million PS4's that Sony sold during the same period. Which means that the Switch isn't only losing momentum when viewed on its own, it's also losing ground to its main competitor... something that Nintendo can hardly afford, considering how far behind they are in this console generation.(It'll still outsell the current-gen XBox, though.)

Going into the Switch's first year, I was fairly sure that it would at sell at least as many units as the ill-fated WiiU had; Nintendo has a rabidly loyal fanbase or the sort that will line up overnight to buy amiibo, so I was pretty sure that they'd manage to sell at least 13 or so million Switches. What wasn't at all certain, however, was that the Switch would continue to sell at that same pace even after the Nintendo faithful each had theirs, in a market where mobile gaming means smartphones and not dedicated handheld gaming devices.

Nintendo's refreshed DS line of consoles also saw a slump in sales, BTW, dropping approximately 62% year-on-year; I guess the total lack of any DS news at E3 didn't help there, either. This is entirely in keeping with the overall trend of Nintendo's hardware sales, too, which saw year-over-year declines in both console and handheld sales in every single year since 2009... except for last year, when the Switch's launch boosted both categories.

I have no doubt that the Nintendo Switch will continue to sell decently well, but I'm going to crawl back out on the same limb as last year and make a prediction:

The Switch will continue to lose to PS4 in sales all year long, and it won't reach the 

20 million units of sales that Nintendo are still saying is "possible."

The Switch is an interesting product, but it occupies a product category that consumers long since decided wasn't all that relevant to them, and it's simply not good enough to change their minds. And with Nintendo having cut the DS line's throat this year, after swearing last year that they had no intention of doing any such thing, I don't think the venerable playing card company should count on having the DS to fall back on.

So, what's next? With Nintendo publicly saying that they have no plans for a beefed-up Switch, there's just no getting around the fact that the Switch simply isn't future-proof; if its brief burst of popularity turns out to be the short-lived that it's looking like, rather then the pop culture phenomenon that the Wii turned into, and both Sony and Microsoft actively working on their next generation of gaming hardware, I think you can look for Nintendo's Switch to flower briefly before fading away for good. Maybe they'll start selling their games on Steam, or something.