×
You will be redirected back to your article in seconds

Nintendo Blames Failure to Sell Players on Switch Appeal for Lowered Forecast

Nintendo’s lackluster third quarter financial results and subsequent decision to lower its sales forecast for this fiscal year was the result of a failure to “fully convey the appeal” of Nintendo Switch hardware and software, the company said in a Q&A session following the release of its financial results this week.

In response to a question asking what had changed in the company’s expectations compared to the start of the year, Nintendo President Shuntaro Furukawa highlighted this communication problem as the main culprit.

“[D]espite having been able to sell fairly large volume of hardware during the holiday season, it is true that we now do not anticipate reaching the forecasted 12-month sales volume set at the beginning of this fiscal year,” said the Nintendo head. “As we look back so far (for this fiscal year), we now evaluate that our efforts to fully convey the appeal of Nintendo Switch hardware and software to the number of new consumers we originally hoped to reach were insufficient.”

“And from the viewpoint of our full-year unit sales forecast for this fiscal year, while we expected that releasing titles during the holiday season would help to increase sales, the year-on-year sales increase during the first half of the fiscal year (April to September) turned out not big enough, which also affected the revision of the unit forecast as we looked back now. We will talk about the next fiscal year in more detail at a later time, but basically, we want to further increase both our hardware and software unit sales more than this fiscal year. We want to further enrich our software lineup and convey its appeal to consumers so that they decide this (calendar) year they would buy Nintendo Switch.”

Popular on Variety

Nintendo has previously stated that Nintendo Switch is continuing to sell at a pace close to that of the Wii. But Nintendo’s Wii was a hit with sales of roughly 26 million in its third year after launch, after which sales began to decrease. Will Nintendo Switch follow this same pattern?

“The launch timing for Wii and Nintendo Switch were indeed different,” answers Furukawa, “plus the business environment has also changed, so I donʼt think we can make a simple comparison between the two platforms. And Wii had Wii Sports, which appealed to all consumers from the moment the hardware was launched, and which contributed to its explosive popularity. Conversely, consumers played multiple titles on Nintendo Switch from its first year, and the fact that they are continuing to play them after that is what contributes to enlarge its installed base. Going forward, I think the way this platform grows will also be different. So, rather than comparing it to Wii, I would like to keep pursuing Nintendo Switch’s unique challenge to the market, and by doing so, continue to sell it for a long time.”

“Compared to the NES (Nintendo Entertainment System) era, there are a lot more developers, larger development teams,” said Nintendo Senior Managing Executive Officer Shinya Takahashi.

“We conduct development in a variety of locations as the number of development centers also increased. Even so, development is being managed more systematically than before. So although it’s true that the volume of software is increasing, there are more people involved in developing it, there are more development processes in place to bring it all together, and development scale has expanded, I believe, regarding plans how to develop software, we are working better than before partly because development departments have been integrated”

“I have heard some people say we have a tendency towards slow development, but thatʼs certainly not true in every case. We have titles currently in development that we havenʼt announced yet, some of which weʼre preparing to release this year, and I donʼt anticipate the kind of delays they would be concerned about.”

Furukawa noted the Nintendo 3DS market has also contracted faster than the company had anticipated.

“[C]urrently many of consumers who newly purchase Nintendo 3DS are consumers purchasing Nintendo 3DS as their first game system. Nintendo 3DS is appealing as a portable game system, that is easy to carry around since it is small and light, and at a very desirable price point. Demand still remains from parents looking to purchase a first game system for their children. That is why our basic policy is to proceed with both Nintendo Switch and Nintendo 3DS in our dedicated video game platform business. Regarding future sales of Nintendo Switch, what we first need is to drive sales of one system per household, and we will work towards increasing demand to expand the installed base much further than now”

“On the other hand, in a survey of households asking how many family members use Nintendo Switch, we found that, while a certain number of households have multiple family members who play on a single console, some households have already purchased multiple consoles. Going forward, we aim to generate such demand among consumers as they feel like “I want to have my own Nintendo Switch console” through measures such as software offerings, not necessarily so that each person will have one, but so that each household will have multiple Nintendo Switch consoles.”

Nintendo released its third-quarter earnings report for the year which included news that the company is lowering its expectations for Switch sales by a small amount and nearly cutting in half how many portable 3DS it thinks it can sell in the fiscal year, which ends in March.

More Gaming

  • Riot Games

    Riot Games to Pay $10 Million to Settle Gender-Discrimination Lawsuit

    Riot Games, developer of “League of Legends,” will fork over at least $10 million to settle a class-action lawsuit filed on behalf of women employees alleging the company’s “bro culture” resulted in systemic gender discrimination. Terms of the settlement in the case, reached in August, were revealed in court documents filed last week in California [...]

  • Dreamscape_Dragon vr

    Dreamscape Gets ‘DreamWorks Dragons Flight Academy’ VR Experience (EXCLUSIVE)

    Location-based virtual reality (VR) startup Dreamscape has teamed up with DreamWorks Animation to launch a new “How to Train Your Dragons” experience at its flagship Westfield Century City VR center in Los Angeles later this month. The 11-minute “DreamWorks Dragons Flight Academy” experience allows up to 8 participants to hone their dragon-flying skills together, and [...]

  • YouTube logo

    YouTube Eases Restrictions on 'Simulated' Violence in Gaming Content

    YouTube announced a change to its content guidelines that will be more permissive in allowing depictions of violence in video-game content — as long as it’s not the sole focus of a video. Starting on Dec. 2, YouTube said, scripted or simulated violent content found in video games will be treated the same as scripted [...]

  • Disney’s Frozen 2 and Laika’s Missing

    'Frozen 2,' 'Missing Link' Lead 47th Annie Award Nominations

    Disney’s “Frozen 2” and Laika’s “Missing Link” led the 47th Annie Award nominations Dec. 2 with eight each and will battle it out for best animated feature along with DreamWorks Animation’s “How to Train Your Dragon: The Hidden World,” Netflix’s “Klaus” and Pixar’s “Toy Story 4” when the ceremony is held on Jan. 25 at [...]

  • Black Friday Deals: Oculus Rift, PlayStation

    The Best Black Friday Deals for VR Headsets, Apps & Games

    Getting your own virtual reality (VR) setup at home used to be costly, requiring not only an expensive headset but also a full-blown gaming PC. Not anymore: The latest generation of all-in-one devices has made VR a lot more affordable, and deep discounts for the holiday season serve as another incentive to finally make the [...]

  • Beat Saber Acquired by Facebook, Company

    Facebook Buys the Maker of the Popular VR Game 'Beat Saber'

    Facebook has acquired Beat Games, the maker of the popular virtual reality (VR) music game “Beat Saber”, the social media giant announced Tuesday. Beat Games will operate as an independent studio under Oculus Studios, and continue to support “Beat Saber” on all existing platforms, according to a blog post penned by Facebook AR/VR director of [...]

  • Kris Bowers, Alan Silvestri, and Catherine

    Alan Silvestri, Cynthia Erivo, Bebe Rexha Among Hollywood Music in Media Award Winners

    The 10th annual Hollywood Music in Media Awards rewarded a diverse crop of composers, songwriters and music supervisors who contributed to film, TV and videogames over the last year, from scorers Alan Silvestri, Hildur Guðnadóttir, Marco Beltrami and Michael Abels to tunesmiths Cynthia Erivo, Bebe Rexha and the Avett Brothers to Quentin Tarantino’s longtime music sidekick, [...]

More From Our Brands

Access exclusive content