In our recent report on the Nintendo Switch sales, we made the point that, while the Switch is a successful system, its sales were not likely to compare to major powerhouse systems like the PlayStation 2, PlayStation 4 and Nintendo’s own Wii. With the latest fiscal reports from Nintendo we can now compare Switch sales versus Wii sales.
In terms of hardware sales, the Switch actually competes quite favorably with the Wii. In its first five quarters the Wii sold 20 million units, while the Switch sold 17.8 million. Of course, it is not an apples to apples comparison, as the Wii launched in November and had two holiday seasons. On the other hand, Wii hardware supply was constrained the first year and sales really soared the second and third year.
More interesting is the difference in software sales. In its first five months, Wii sold 113 million software units versus only 69 million for the Switch. Obviously, the Wii launched in the pre-digital era. Nevertheless, this is a large difference that digital sales do not explain. On the positive side, Nintendo had a stronger first-party lineup for the Switch, which made them quite a bit of money.
In terms of overall revenue, Nintendo was a significantly larger company in the early days of the Wii in 2006 and 2007. Nintendo revenue in the first five quarters after the Wii launch was $18 billion, versus a little over $11 billion the past five quarters.
The big difference was the portable DS system that was a major generator for Nintendo for many years. In fiscal 2008, Nintendo’s portable revenue was over $7 billion. Portable revenue last fiscal year was only $1.7 billion.
To really grow, Nintendo needs to break into new areas, most notably mobile games. Nintendo’s efforts in those areas have been anemic, a rounding error in terms of revenue. Whether Nintendo can have any impact in the larger mobile market remains to be seen.
If you would like to schedule a call to discuss Nintendo’s sales or prospects with a DFC analyst, please contact Robert Nolan at rnolan@dfcint.com. For more information on the latest forecasts go here.
