They can't compare PS5/XBS, so they're trying to use a portable console (facepalm), which accounts for 24% of consumer spend in the console industry.
I wonder what will they try when PS5 outsells NSW + XBS combined in FY22.
FY00
GB 18.86 M
PS2 9.20 M
FY01
PS2 18.07 M
GB 4.70 M
Millions of consoles unsold at the end of Q1
Consequences
Despite being 21.7% down, Switch outsold PS5/XSX combined in a slow quarter where the biggest software seller was Monster Hunter Rise(3M+) launched last Quarter & New Pokemon Snap. Compared to last year I expect next Quarter to also be down by a similar amount but for the OLED, Pokemon Remakes, Metroid, Mario Party, Wario and a slate of third party titles to ensure overall growth, especially on the software side. Hardware might end up flat but I anticipate once again dedicated forums underestimating OLED and the slate of games Nintendo have secured for the holidays and beyond.
In terms of Software despite stacking up against New Horizon's 10 million last year Software was only down 10%.
Next Quarter Software will be up YoY - Skyward Sword, Wario, MH Stories 2 a bunch of third party games vs SM3D Allstars & Paper Mario.
While the Fall is where we are looking to really accelerate things YoY, after all we are stacking it up against last year when the only notable releases were Pikmin 3 Deluxe & Age of Calamity. This year we have Pokemon Remakes, Mario Party, SMTV, Metroid - software is what moves hardware end of the day and the competing consoles have Halo and I'm not sure what's Sony's big fall game this year.
Nintendo has secured around 30 million units to be produced this fiscal year.
https://screenrant.com/nintendo-make-30-million-switch-consoles-2021/
What percentage of these 30 million units are OLED? This will give you the answer as to why hardware is down as most of Nintendo's strategy for selling those 30 million units have to do with the OLED launch later in the year. That's the reason they have both 1st and 3rd Party exclusives cramped in the fall compared to last year - where for most of the year New Horizon & Ring Fit were the major hardware sellers.
Next year has Breath of the Wild Sequel, Splatoon 3 and Pokemon Legends, it's pretty certain that Switch unlike the other two console makers has the needed manufacturing capacity in place to supply 25 million units; chip shortages will continue - so it's difficult to envision PS5 managing anywhere near 25 million considering PS4 never got close to that number. So basically all you've posted is wishful thinking, we've been hearing about the Switch cliff pretty much since it launched but when you look at the actual things that sell hardware - Nintendo has an abudance of it - GAMES... next year is the software peak so the hardware might be down but not enough for PS5 to catch up.
There are things like planning when we look at these giant corporation - Switch was sold out for years because Nintendo needed time to build up the capacity in their supply chain to actually produce and ship 30 million units; as well as the confidence they would sell-out. PS5 is in a similar situation but chip shortages have only gotten worse and they are competing with not only Microsoft to scale their production. Even in a best case scenario you are looking at 24 million for Sony's next FY which would be unprecedented amount for them historically and a big risk if demand suddenly slows down. This is the main thing to consider for Sony and Microsoft it's actually better to not meet demand and be in a similar situation to the Switch for as long as possible slowly scaling up compared to their initial targets. There is a reason why you don't usually peak in the first two years and do it gradually. Forecasting and meeting internal targets is key and for Sony as long as they are ahead of PS4 and Microsoft things are good, things are even better if PS5 remains supply constrained and selling out as soon as it hits store floors for multiple years like the Switch.