Nintendo FY3/2024 Q4 Earnings Release, Switch Hardware Q4: 1.96M units (-35.95% YoY), 141.32M units LTD.

[Mr_F_Snowman]

Their game bundles haven't been aggressive at all, last year was the most aggressive and it was basically Mario Kart and Nintendo Switch Sports bundles with the original Switch and Mario Kart and Super Smash Bros bundles with Oled model. Meanwhile, Sony does Spiderman bundles (a new game) with PS5 and we even saw 3 game bundles with PS4. Nintendo hasn't been aggressive with bundles at all. Either the hardware being forecasted to be high has to be due to price cuts, very aggressive bundling, or another revision. Oled Lite or some clampshell Lite remodel could happen to make the Lite model more attractive and would help boost Q2 (release in September) along with a final major title this holiday (DK or Poke remake?) and bundling this holiday for Q3. If no revision, then price cuts ($50.00) across the board in NA and EU on atleast the original Switch and Oled model. If no price cuts or revision then the bundling would have to be very aggressive such as two or three older games or atleast the newer games getting bundled such as Wonder and ToTK.

Yeh I mean are people missing the info from the slides - bundled software this year stood at 2.85 million units - so 2.85 million consoles out of 15.7 were bundled with a game. That doesn't strike me as a big ratio or a sign they have been aggressive with bundles.

In light of their targets for this year 'd expect that this year there will be $50 price cuts and bundling will get doubled or even tripled up. They have a pretty big catalogue of games now that are probably selling very minimally that they can use at basically zero cost to add value to these packages.

 

[Lelouch0612]

I wonder whether 2024 or 2025 would be the better time to release a last Switch revision, which is the usual pattern for Nintendo at the end of a generation.

 

[SuperCharlie78]

I wonder whether 2024 or 2025 would be the better time to release a last Switch revision, which is the usual pattern for Nintendo at the end of a generation.

I think it must be this year, according to the 13,5M forecast.

And bundles. Just put those pink joycon with PPS and the red ones with Wonder and they should be fine.

 

[Luminoth 4545]

Switch had the best fiscal year 7 of any Platform beating the PS2's 14.71 million by almost one million. The PS2 has the best FY8 of 13.73 million and Nintendo forecasts 13.50 million so this fiscal year it will be close to the record.

Nintendo yearly hardware shipments (millions of units)

Note: GB hardware shipments counted up to March 31st 1998, GBC hardware shipments counted from April 1st 1998.

Sony yearly hardware shipments (millions of units)

Note: The PSV numbers are estimates and the PS5 still has Q4 remaining for FY3 and is forecast to ship 21 million.

Nintendo yearly software shipments (millions of units)

Note: GB software shipments counted up to March 31st 1998, GBC software shipments counted from April 1st 1998.

Switch software for fiscal year 7 was only around 15 million less than the combined total of all other Nintendo Platforms.

 

[AruanaRiva]

Yeh I mean are people missing the info from the slides - bundled software this year stood at 2.85 million units - so 2.85 million consoles out of 15.7 were bundled with a game. That doesn't strike me as a big ratio or a sign they have been aggressive with bundles.

In light of their targets for this year 'd expect that this year there will be $50 price cuts and bundling will get doubled or even tripled up. They have a pretty big catalogue of games now that are probably selling very minimally that they can use at basically zero cost to add value to these packages.

I think doing a hardcore gamer bundle like.

Bayo 3
Astral chain
Xenoblade 3

Combo for 350 can help a lot to grow those game before Switch 2 drop.

 

[Joseki]

I wonder whether 2024 or 2025 would be the better time to release a last Switch revision, which is the usual pattern for Nintendo at the end of a generation.

Historically they would be releasing the cheapest SKU now, but I'm honestly not sure what more you can strip from the Switch Lite.
The only real option is screen/battery/speakers and make a "Switch TV stick" and bundle it with a controller for $150, potentially bundled with a game?

I don't personally see much point in any other kind of revision if not for lowering the entry price at the minimum possible.

 

[ggx2ac]

Since some are going to discuss the Q&A here, I've already taken a look and highlighted some things.

Source: https://www.nintendo.co.jp/ir/pdf/2024/240508.pdf

Machine translated part of Answer 3:

Furukawa: With regard to the utilization of cash on hand, we are considering or have already implemented various initiatives in the areas of "accumulation of software assets" and "foundations for maintaining and expanding relationships with customers." However, the development of a successor to the Nintendo Switch is an investment that has been carried out as part of normal business activities. As a result, investment in successor models is not the main focus of the company's use of cash reserves. With regard to the accumulation of software assets, at this stage, investment in video content, which is entertainment other than games, is taking precedence, but there is a possibility that new investments related to games will occur in the future, resulting in successor models.

Machine translated part of Answer 5:

We have not yet discussed the timing of the release of the successor to the Nintendo Switch, so we cannot give you a specific answer, but at this point there is no shortage of semiconductor components as there was until two years ago, so we do not anticipate that the supply of semiconductor components will be a major problem when the successor model is released.

Machine translated part of Answer 6:

Furukawa: We don't have much more to say about the successor to the Nintendo Switch at this stage. For today's announcement, we decided that it would be best to use the phrase "successor to Nintendo Switch", so we decided to use this expression.

That's all I highlighted, there were 9 questions.

 

[fiendcode]

I wonder whether 2024 or 2025 would be the better time to release a last Switch revision, which is the usual pattern for Nintendo at the end of a generation.

Historically it's really about 50/50 for their "successful" consoles. Half were post successor for a final revision (AV Famicom, SFC Jr, GB micro, n2DSXL) and half not (GB Color, Pikachu N64, DSi XL, Wii Mini) though it probably depends on where you draw the line on "successful". I think a final Switch could go either way tbh given how long it's cycle is.

 

[meatbag]

Machine translated part of Answer 3:

Interesting! They make it a point that developing the successor is not the focus of their expenditures; rather, they're putting their money into the movie biz.

Will of course wait for more comprehensive translations, but thanks for the MTL regardless!

 

[Lelouch0612]

Historically they would be releasing the cheapest SKU now, but I'm honestly not sure what more you can strip from the Switch Lite.
The only real option is screen/battery/speakers and make a "Switch TV stick" and bundle it with a controller for $150, potentially bundled with a game?

I don't personally see much point in any other kind of revision if not for lowering the entry price at the minimum possible.

They could make it even smaller potentially ? I agree that a 150$ price point could be enticing.

 

[Godzilla]

Replace Switch lite with Switch lite oled, that could entice a few late gen buyers.

OLED version of the Lite for $199? count me in

 

[Aostia82]

I think that, with the Switch 2 on the horizon, would be neat for them trying to increase the number of console owned in the same household/increase the accessory ownership within the same household
to do that, you should

- decrease the entry price of the portable-only console (maybe even decreasing its production price, in order to not lose margin: it COULD be possible?)
- present special/limited edition of such consoles (the 3DS had tons)
- launch special/limited JoyCons with MORE collectible values

 

[Joseki]

They could make it even smaller potentially ? I agree that a 150$ price point could be enticing.

I thought about even smaller device, but I don't see how making it smaller actually saves costs. The Switch Lite is pretty packed already and there is a strong argument for the even smaller screen making games there were originally thought for the standard Switch screen size really hard to play.

 

[Evilnemesis8]

Interesting! They make it a point that developing the successor is not the focus of their expenditures; rather, they're putting their money into the movie biz.

Will of course wait for more comprehensive translations, but thanks for the MTL regardless!

Yeah, still TBD if the verbiage is truly representative but I can see it being the case, if they feel secure in their Switch 2 plans. This would be be a stronger avenue for growth for them and also be something that diversifies the company revenue more, which is something any corporation will seek to do to prevent being too reliant on one thing for fear of that one thing hitting some hiccups for unknown reasons.

That and movies are an untapped avenue to big up new customers.
We're already seeing that with numerous TV shows.

 

[ILikeFeet]

Nintendo animated series? animated movies? licensed series? there's a gold mine for nintendo to dig into

 

[storres]

Nintendo animated series? animated movies? licensed series? there's a gold mine for nintendo to dig into

A Luigi's Mansion movie is a no-brainer

 

[wolftendo]

Something that might get lost in the speculation is that according to the second question of the Q/A, the projected 13.5 million hardware sales for this FY are only for the current switch. So there is no way to predict if it will come out in this FY or not based on that.

It also means that, as long as they pull it off, the switch has the #1 HW spot guaranteed.

 

[Valerio]

I thought about even smaller device, but I don't see how making it smaller actually saves costs. The Switch Lite is pretty packed already and there is a strong argument for the even smaller screen making games there were originally thought for the standard Switch screen size really hard to play.

Honestly I'd like a switch Lite XL for my daughter... like the last 2DS

 

[Danny]

I wonder if they feel ready to bundle tears of the kingdom with Switch this year, with the poor legs it would still be an attractive bundle to sell more Switch units this year.

 

[Chris1964]

The period gaming companies were investing at older models with late life revisions is over. With development times and budgets rising year after year the strategy anymore is as fast as possible transition of user base at next hardware.

 

[GodlyTrident]

I wonder if they feel ready to bundle tears of the kingdom with Switch this year, with the poor legs it would still be an attractive bundle to sell more Switch units this year.

I am actually wonder how many people are buying Switch with BOTK rather than TOTK Zelda game.

 

[ILikeFeet]

A Luigi's Mansion movie is a no-brainer

I get the feeling that anything Mario related is tied up with Universal. if Nintendo is doing stuff with other studios or Nintendo Pictures, it could open the door for other IPs, like a Pikmin movie, or Star Fox series

 

[Godzilla]

Now that i think about it, the whole "MP4 delayed because of creating new cutscenes" fits right into the creation of Nintendo Pictures which has helped in quite a few Nintendo games in terms of CG since their creation.

Maybe?

 

[Koni]

I get the feeling that anything Mario related is tied up with Universal. if Nintendo is doing stuff with other studios or Nintendo Pictures, it could open the door for other IPs, like a Pikmin movie, or Star Fox series

Universal really went from suing Nintendo over Donkey Kong to working with them and utilizing their IP. XD

 

[ILikeFeet]

Now that i think about it, the whole "MP4 delayed because of creating new cutscenes" fits right into the creation of Nintendo Pictures which has helped in quite a few Nintendo games in terms of CG since their creation.

Maybe?

still don't pass the sniff test to me. could be done by other, closer studios while Nintendo Pictures could focus on more lucrative IPs like Pikmin

 

[balgajo]

At the least they confirmed the forecast is for Switch hardware alone. I mean, it was already there in the slides but you never know.

 

[Chris1964]

Nintendo forecasting less than 20% drop at Switch software this year and knowing the schedule only for first three months of it means at least one big release at the remaining nine.

 

[Astral_lion02]

The period gaming companies were investing at older models with late life revisions is over. With development times and budgets rising year after year the strategy anymore is as fast as possible transition of user base at next hardware.

Yes but Switch 2 is not out yet.

Given the forecast they are still going to push almost only Switch 1 this year.

Not nececeserly with a revision but I would not rule out this possibility.

When Switch 2 will be out in March 2025 or after then Switch 1 will be send to die.

 

[balgajo]

Nintendo forecasting less than 20% drop at Switch software this year and knowing the schedule only for first three months of it means at least one big release at the remaining nine.

Which makes me wonder what game could do this. If it's MP4 they have a lot of confidence on whatever they have right now.
But maybe they will release the next 3D Mario for Switch and will be able to keep its momentum for Switch 2, coming a few months later.

 

[Chris1964]

Which makes me wonder what game could do this. If it's MP4 they have a lot of confidence on whatever they have right now.
But maybe they will release the next 3D Mario for Switch and will be able to keep its momentum for Switch 2, coming a few months later.

Pokemon Legends isn't ruled out yet for Jan-Mar release.

 

[theprodigy]

Pokemon Legends isn't ruled out yet for Jan-Mar release.

tbh I just assumed it was releasing there lol

 

[balgajo]

Pokemon Legends isn't ruled out yet for Jan-Mar release.

For sure. But considering how bold is their Switch hardware goal I think that it might be something that will drive both. So if the thing that drives both Switch hardware and software comes in Q1 2025(FY Q4) maybe Switch 2 won't come in this fiscal year. Idk, May/Jun maybe.

 

[awng782]

Pokemon Legends Z-A releasing by Mar 2025 should ensure Nintendo reaches their software target.

As for hardware, all of the major Nintendo franchises are represented on Switch, the ability for any one big new game to sell more hardware at this point in time is greatly diminished. The only way I can see Nintendo hitting their 13.5M HW target is if they drop the price of the HW (outside of Japan).

 

[Wockio]

I wonder if they feel ready to bundle tears of the kingdom with Switch this year, with the poor legs it would still be an attractive bundle to sell more Switch units this year.

That is definitely not happening

Mario Odyssey, 3D World or Switch Sports feel like the best candidates for a bundle

 

[storres]

All of the major Nintendo franchises are represented on Switch, the ability for any one big new game to sell more hardware at this point in time is greatly diminished. The only way I can see Nintendo hitting their 13.5M HW target is if they drop the price of the HW (outside of Japan).

We were saying that just last year with TotK.

 

[Godzilla]

All of the major Nintendo franchises are represented on Switch, the ability for any one big new game to sell more hardware at this point in time is greatly diminished. The only way I can see Nintendo hitting their 13.5M HW target is if they drop the price of the HW (outside of Japan).

We said the same about the last forecast "They are insane! how could they sell 15m switch, is just too old!!!111!!11!", and they blasted 15.7m in our faces.

Let them cook

 

[SuperCharlie78]

Pokemon Legends Z-A releasing by Mar 2025 should ensure Nintendo reaches their software target.

As for hardware, all of the major Nintendo franchises are represented on Switch, the ability for any one big new game to sell more hardware at this point in time is greatly diminished. The only way I can see Nintendo hitting their 13.5M HW target is if they drop the price of the HW (outside of Japan).

Could a brand new 3D DK game move some HW?

I believe! It'd be a guaranteed 10 million seller imho.

 

[acezam]

Thanks to @pierre485

...

 

[acezam]

 

[balgajo]

Interesting to look at the best selling Wii/DS software and the amazing performance 2D Mario had within this audience. Switch best selling games have a completely different audience where 2D Mario doesn't perform the same way. Meanwhile 3D Mario had a >x2 multiplier over Galaxy.
Mario Kart is the common factor between all audiences, the true king.

 

[My Tulpa]

That is a revenue number not a unit number. Because all third party revenue is accounted as only the royalty Nintendo gets, the ratio will heavily favor Nintendo’s first party. For the past few FY, it’s been about 50/50 in unit sales (excluding digital only games; see slide 50). In fact it seems it’s actually third party > first party.

While true, the revenue ratio is the more important marker anyways for a gaming platform. It tells us what most people use the console for, what they mostly spend money/time with.

Knowing Nintendo is primarily a 1st party gaming machine dictates why its business model is drastically different than the Xbox and PlayStation (even though people try to compare them all the time)

Ps5, for example, is the exact opposite of Switch. ~80% revenue is 3rd party. Only ~20% is 1st. Game unit sales for ps5 is ~17% 1st party and 83% 3rd.

Everything Sony does is to facilitate being a 3rd party gaming platform. Everything Nintendo does is to facilitate being a Nintendo gaming machine.

 

[Aostia82]

Nintendo forecasting less than 20% drop at Switch software this year and knowing the schedule only for first three months of it means at least one big release at the remaining nine.

I'm pretty confident that Pokémon Legends will release in Q1 CY'25 at this point
maybe other notable release could be Tomodatchi, Metroid (even if IMHO can't be more than a 3+ million seller, and IMHO it will be a cross-gen game to showcase graphical visual improvements of the "new Switch model"), FE Remake (not a BIG seller imho) and a Zelda HD collection?

 

[theprodigy]

While true, the revenue ratio is the more important marker anyways for a gaming platform. It tells us what most people use the console for, what they mostly spend money/time with.

Knowing Nintendo is primarily a 1st party gaming machine dictates why its business model is drastically different than the Xbox and PlayStation (even though people try to compare them all the time)

Ps5, for example, is the exact opposite of Switch. ~80% revenue is 3rd party. Only ~20% is 1st. Game unit sales for ps5 is ~17% 1st party and 83% 3rd.

Everything Sony does is to facilitate being a 3rd party gaming platform. Everything Nintendo does is to facilitate being a Nintendo gaming machine.

....the actual revenue number that tells you what people are using the console for is the one that denotes actual user spending, not the one that shows Nintendo's cuts

 

[SuperCharlie78]

I'm pretty confident that Pokémon Legends will release in Q1 CY'25 at this point
maybe other notable release could be Tomodatchi, Metroid (even if IMHO can't be more than a 3+ million seller, and IMHO it will be a cross-gen game to showcase graphical visual improvements of the "new Switch model"), FE Remake (not a BIG seller imho) and a Zelda HD collection?

Hey, Rhythm Tengoku! It's happening, I feel it intensely.

 

[Mr_F_Snowman]

Nintendo forecasting less than 20% drop at Switch software this year and knowing the schedule only for first three months of it means at least one big release at the remaining nine.

As well as lots of bundles. Lots of bundles with lots of games. I wouldn't be surprised to see this years bundled software number (2.85 million) as much as double or triple this year.

A holiday Mario bundle with Mario Kart / Mario Odyssey / Mario Party would probably still fly off the shelves at full price

 

[Robjoh]

While true, the revenue ratio is the more important marker anyways for a gaming platform. It tells us what most people use the console for, what they mostly spend money/time with.

Knowing Nintendo is primarily a 1st party gaming machine dictates why its business model is drastically different than the Xbox and PlayStation (even though people try to compare them all the time)

Ps5, for example, is the exact opposite of Switch. ~80% revenue is 3rd party. Only ~20% is 1st. Game unit sales for ps5 is ~17% 1st party and 83% 3rd.

Everything Sony does is to facilitate being a 3rd party gaming platform. Everything Nintendo does is to facilitate being a Nintendo gaming machine.

I am not sure that sony and Nintendo reports revenue in the same way. At least revenue from digital sales are different, sony shows the complete sale meanwhile Nintendo only shows their cut.

 

[Aostia82]

As well as lots of bundles. Lots of bundles with lots of games. I wouldn't be surprised to see this years bundled software number (2.85 million) as much as double or triple this year.

A holiday Mario bundle with Mario Kart / Mario Odyssey / Mario Party would probably still fly off the shelves at full price

Switch-a-roo bundle: Switch OLED + every Mario game at 329€

 

[awng782]

We were saying that just last year with TotK.

We said the same about the last forecast "They are insane! how could they sell 15m switch, is just too old!!!111!!11!", and they blasted 15.7m in our faces.

Let them cook

TOTK was the 2nd big Zelda game on Switch, compared to something like Pokemon Legends Z-A which is the 6th Pokemon RPG on Switch, it won't have anywhere near the same impact.

 

[Tbone5189]

TOTK was the 2nd big Zelda game on Switch, compared to something like Pokemon Legends Z-A which is the 6th Pokemon RPG on Switch, it won't have anywhere near the same impact.

PokemonLZA gonna sell more Oleds to consumers than SwSh ever could! Dont underestimate it

 

[SquidEnthusiast]

Nintendo animated series? animated movies? licensed series? there's a gold mine for nintendo to dig into

Nintendo animated series you say? Hmmm. I wonder what series could benefit greatly from that sort of adaptation. Surely there is one that's really popular among Japanese youth currently, maybe featuring some kind of competitive activity the characters engage in that would be very easy to write a story around. Hmm. Curious.