So as expected 6M was a conservative estimation for the Quarter.
Even if we maintain a conservative outlook of 13M units for the holidays, that would be very close to 29M units for the calendar year
Q1 - 3.29M, Q2 - 5.67M, Q3 - 6.85M, Q4 ->13M = >28.81M / 81.3M
Next year Q1 and Q2 will probably be up YoY, due to COVID this year they couldn't supply enough to meet demand even for the New Horizon launch. There are also additional markets where they will continue to see the growth that Nintendo entered this year, for example recently it was noted that Switch is catching up very quickly to the PS4 in China, they are already the dominant dedicated platform in Taiwan and South Korea, re-entered Brazil a few months ago etc. The new consoles will not impact them while PS5 will have subpar performance and support in Japan. The vast majority of Japanese 3rd Parties will be reluctant to support the new consoles as it means taking pretty substantial gambles - Square Enix for example really underperformed this quarter because of Marvel's Avengers, unless Sony or Microsoft are footing the bill - I don't see them rushing to support next-gen. Bandai had a bunch of PS4 exclusives this year and all underperformed, while Sega hasn't really built an audience on the platform in any meaningful way and despite this Mario & Sonic at the Olympics is probably their biggest game in over a decade.
Overall this holiday Quarter and next year will be full of mid-sized and huge third party games, which will be especially impactful in Japan, this year the Top Selling 3rd Party games on the Switch in Japan will be Momotaro(Konami), Age of Calamity(Koei Tecmo), eBaseball(Konami), Minecraft(Microsoft).
Starting November we are finally starting to see the type of support we should expect for the platform that has close to 90% of the Dedicated Video game market in Japan. A lot of mid-sized efforts, starting with SMT III, which launched this week with >50K sales on the Switch. Also a fair few exclusives for the Platform,
2020 & 2021 Switch line-up
- Shin Megami Tensei III(Atlus) - multiplat
- Pikmin 3 Deluxe (Nintendo) - exclusive
- Sakuna: Of Rice and Ruin(Marvelous) - multiplat
- Age of Calamity(Koei) - exclusive
- Momotaro(Konami) - exclusive
- Fitness Boxing 2(Imagineer) - exclusive
- Atelier 2(Koei) - multiplat
- Derby Stallion(Game Addict) - exclusive
- Kingdom Hearts: Melody of Memory(Square) - multiplat
- Taiko no Tatsujin: Rhythmic Adventure Pack(Bandai) - exclusive
- Puyo Puyo 2(Sega) - multiplat
- Immortals Fenyx Rising(Ubisoft) - multiplat
- BOND(Koei) - exclusive
- Disgaea 6(Nippon) - multiplat
- Super Mario 3D World + Bowser's Fury(Nintendo) - exclusive
- Bravely Default 2(Square) - exclusive
- Story of Seasons Olive Town(Marvelous) - exclusive
- Monster Hunter Rise(Capcom) - exclusive
- Balan World(Square) - multiplat
- Rune Factory 5(Marvelous) - exclusive
- SMT V(Atlus) - exclusive
- No More Heroes 3(Marvelous) - exclusive
- Monster Hunter Stories 2(Capcom) - exclusive
Marvelous - 4
Koei Tecmo - 3
Square - 3
Atlus - 2
Capcom - 2
Nintendo entering an unprecedented dominant position in Japan, where there is no successful Playstation console or portable, so some third parties might not even bother porting their AA to the Sony ecosystems. PS5 will see a further decline from the PS4 and a lot of PSP/PS Vita focused studios have already transitioned to the Switch.
The situation on the Japanese market is entering a pretty substantial shift especially for Capcom, Koei, Marvelous, Konami. Next year there will be a multi-million-selling game in Monster Hunter Rise, which will catapult Capcom to the Top spot as far as 3rd Parties on the Switch. Momotaro, and Age of Calamity will be the biggest games for their Publishers in Japan for over a decade. Marvelous has made a full shift towards the Switch and Olive Town and Rune Factory 5 are likely to be the biggest games in those franchises. Atlus will get a big push by Nintendo for SMT V. Bravely Default 2 will see growth compared to its predecessor and should have no problems surpassing 2M sales WW.
This will impact the rest of the Asian markets which are already trending pretty heavily towards Nintendo, and we still don't know what will launch as far as 1st Party and 2nd Party titles from Nintendo and Pokemon Company. Pokemon Snap for example could be a pretty big hit, Bayonetta 3 should be pretty close to being ready to launch. Breath of the Wild 2 would probably have the highest launch in the franchise's history.
So to me, it seems that Switch will be close to flat in Japan next year, will have its peak year in Asia, will probably see expansion in some developing markets, while in the West the holiday season might give us an idea of what to expect in 2021.
Personally, I think 2021 will be the peak calendar year for the Switch, this year there was huge demand that could not be met, New Horizon & Ring Fit Adventure will continue to attract new audiences over the holiday and into 2021, while Monster Hunter Rise, steady releases of 3rd Party games, and most of all hardware supply will ensure that in Q1 and Q2 are up YoY. Q3 will be either flat or down but I don't see how there isn't a huge holiday game on the Switch next year. Whether it's Breath of the Wild 2 or something else remains to be seen. But this year Nintendo are in an unprecedented situation pushing a Koei Tecmo game for the holidays, so Koei is in a very fortunate position and Breath of the Wild 2 will likely help Age of Calamity remain relevant into 2021.
Q1 - >6M, Q2 - >6M, Q3 - >6M , Q4 ->15M = >33M / >114.3M
