While the Nintendo Switch success has been well publicised, the Japanese company today said it expects to sell an additional 20 million Switch consoles in the upcoming financial year — more than double what it’s already sold.
The company added that it hopes to sell 100 million units of Switch software across retail and digital by the end of the next financial year.
Timeline for Entertainment
In addition, the company announced some major shake-ups in its senior management. Ahead of its annual investors meeting, Nintendo announced that its president Tatsumi Kimishima will step down.
Shuntaro Furukawa is the new Nintendo president
In his place, 46-year-old Shuntaro Furukawa will become the president of Nintendo. Furukawa has been with Nintendo since 1994. He is currently a board member of both Nintendo and The Pokémon Company International which the former has a significant stake in.
As of September 2016, Furukawa has been in charge of Nintendo’s Global Marketing Department.
While Furukawa’s age might seem surprising, it’s worth remembering that having a young president is not out of character for Nintendo.
The company’s beloved former president Satoru Iwata was just 42 when he became president of the company in 2002.
Former president Tatsumi Kimishima will become an Executive Adviser. He was widely seen as a placeholder president to ensure a smooth transition for Nintendo as they launched the Nintendo Switch. His predecessor, Iwata died unexpected aged 55 shortly before the console launched.
In addition, Nintendo of Europe’s president, Satoru Shibata is moving into a more global executive role. It has not been confirmed who will replace Shibata as president of Nintendo of Europe.
The new positions will take effect on 28 June 2018.
What does the future hold for Nintendo?
Nintendo’s expectation of selling additional 20 million Switch consoles and 100 million Switch games in the upcoming financial year is an extremely ambitious target.
So how are the company going to manage it?
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Gotta catch all those sales:
As it stands, Nintendo has sold just short of 18 million Switch consoles in the past 13 months.
That’s even with the help of critically acclaimed titles from the Zelda, Mario, and Mario Kart series. Nintendo has also seen success with other popular series including Splatoon, Xenoblade, and Kirby.
While these series will no doubt continue to perform for Nintendo, ultimately, only one series can possibly generate the sales Nintendo hopes for in the upcoming financial year: Pokémon.
— Pokémon (@Pokemon) April 14, 2018
The Pokémon series is always a huge seller for Nintendo. On the 3DS alone, the series has sold well over 50 million copies. If any series can attract fans to the Switch, it is Pokémon.
In its report, Nintendo confirmed a Pokémon role-playing game for Nintendo Switch would launch in “2018 or later”. Judging by the sales targets Nintendo hopes to achieve in the next financial year, it seems incredibly likely the game will be out sometime before next March.
Traditionally, Pokémon games have launched in November to capitalise on the Christmas rush, so it wouldn’t be surprising to see the Switch Pokémon RPG launch around then.
Nintendo jumps into eSports:
The other major release from Nintendo in 2018 will be Super Smash Bros. for Switch.
The game series already has a hugely engaged fan-base and many popular eSports leagues have been built around it.
Perhaps another sales driver could be a concerted push into eSports via Nintendo, specifically using the upcoming Smash Bros. series.
The company recently launched ‘Nintendo Versus’ social media channels to share all news around Nintendo-based eSports competitions. For the time being, Nintendo has focused these events around Splatoon 2 world championships. However, the company has also announced a Super Smash Bros. league which will debut at the Electronics Entertainment Expo in Los Angeles in mid-June 2018.
The Super #SmashBros Invitational 2018 and #Splatoon2 World Championship 2018 tournaments will take place in Los Angeles the week of #E32018! Watch the competition on Nintendo’s Twitch & YouTube channels when the tournaments are live-streamed 6/11 & 6/12. https://t.co/wz1pIT8ndU pic.twitter.com/3itUOH8rgH
— Nintendo Versus (@NintendoVS) March 22, 2018
We should probably expect a late-summer, or early autumn launch for Smash Bros. for Switch. This would tie-in nicely with the launch of Nintendo’s first paid online service which begins in September 2018. The timing would allow Nintendo to lure customers into paying for the online service with a major game launch focused on online play.
Other avenues to drive game sales:
In addition to releasing new entries in Nintendo tentpole franchises such as Pokémon, Mario Kart, Smash Bros., Yoshi, and Fire Emblem, the company will also hope to attract interest in its intellectual property through other avenues.
Specifically, Nintendo hints at upcoming, previously-unannounced smartphone applications:
Our smart-device business is poised to grow with the release of new gaming applications including Mario Kart Tour, alongside the applications consumers continue to enjoy that were released prior to this fiscal year.
There is also the film industry consider. Two Nintendo-based films are currently in development.
The first, a Pokémon title called Detective Pikachu. The film stars Ryan Reynolds as the eponymous lead, and Jurassic World: Fallen Kingdom star Justice Smith, along with Kathryn Newton, Bill Nighy, and Rita Ora.
The release date is 10 May 2019. Presumably the first release of the film’s trailer could tie-in to the launch of the upcoming Pokémon Switch game.
In addition, there’s a Super Mario movie in the works from Illumination Entertainment, the off-shoot of Universal Pictures responsible for the popular Despicable Me series.
Finally, there’s Wreck-It-Ralph 2 from Disney. The first film included a cameo from the Nintendo character, Bowser. The film’s director Rich Moore previously told Digital Spy that he hoped the sequel would also contain Nintendo characters, specifically Mario. If this plan came to fruition it could also help bring attention to Nintendo games.
The Switch success
As it stands, Nintendo’s investor report puts profit before tax at JPY201,090 million, 57% higher than the previous financial year.
This is due, in part, to the barnstorming success of the company’s latest console, the Nintendo Switch. This fiscal year, the Switch sold 15.05 million units in the fiscal year ending March 2018. That puts its lifetime sales at around 17.79 million. Considering the console has only been available for 13 months, that is no mean feat.
Driving console sales are the video-games themselves.
The console is now home to 12 games which have sold over 1 million copies in the past 12 months. These include nine first and second-party games, and three games made by other publishers. Nintendo’s million-selling games include:
- Super Mario Odyssey – 10.41 million
- Mario Kart 8 Deluxe – 9.22 million
- Splatoon 2 – 6.02 million
- The Legend of Zelda: Breath of the Wild – 5.72 million
- ARMS – 1.85 million
- 1-2-Switch – 1.34 million
- Xenoblade Chronicles 2 – 1.31 million
- Kirby Star Allies – 1.26 million
- Pokkén Tournament DX – 1.16 million
It’s worth noting that, as titles which launched in March 2017, the first month of sales of The Legend Of Zelda: Breath Of The Wild and 1-2-Switch are not included in these figures.
3DS’s steady performance
Despite being seven years old in 2018, the Nintendo 3DS, a follow-up console to the critically acclaimed Nintendo DS is still pulling in ‘solid’ sales for Nintendo.
The console sold 6.40 million units this financial year, bolstered by the launch of the family-friendly New Nintendo 2DS XL in April 2018. This console lacks the 3D functionality of the original 3DS line-up. However its price-point is lower and it is aimed at younger children.
In addition, new Pokémon titles, Ultra Sun and Ultra Moon helped spur the 3DS’ results. They were among the three 3DS titles to sell over a million copies this financial year. The full list is as follows:
- Pokémon Ultra Sun/Pokémon Ultra Moon – 7.51 million
- Mario Kart 7 – 1.82 million
- New Super Mario Bros. 2 – 1.33 million
Nintendo pledged to continue to support the 3DS system into 2018, but with just one game (Mario & Luigi: Bowser’s Inside Story + Bowser Jr.’s Journey, a remake of a previous game on the console) scheduled for 2019, it looks like the time of the 3DS may be coming to a close.
Mobile makes money
In a message from the company president to investors, Kimishima describes Nintendo’s strategy in releasing smartphone games:
We roll out of the smart device gaming business, aiming to leverage the new demand created by people who had hitherto not played with Nintendo’s products and by regions that our products had not reached in the past, to strengthen our revenue base as well as create synergy with the dedicated video game platform business.
The statement implies that smartphone games are, in essence, a marketing technique from Nintendo. They are aimed at raising awareness of the companies’ intellectual property to drive demand for dedicated video game platforms.
However, Nintendo’s financial results show that smartphone games are making money in their own right. The report notes:
“Our smart devices and IP related income was JPY39.3 billion (62% increase on a year-on-year basis).”
At the time of writing, Nintendo has four dedicated smartphone games. These are Miitomo, Animal Crossing: Pocket Camp, Super Mario Run, and Fire Emblem Heroes.
The company has also announced a smartphone racing game based on the Mario Kart brand. Mario Kart Tour will launch sometime within the next financial year, but Nintendo are yet to announce a more specific release date.
Additional income streams
Nintendo’s income this year has also been supplemented by sales of Amiibo, its toys-to-life figurines and cards, and the launch of the Super Nintendo Entertainment System Mini Classic.
The latter was a relaunch of the popular 1990s console, the SNES, in a mini-form. The limited edition collectible console had 21 digital titles packed into it, including the previously-unreleased Star Fox 2. The mini console follows the release of the Nintendo Entertainment System Mini Classic which was released in 2016.
Nintendo did not state how much these additional income streams generated. However, Nintendo did reveal that the SNES Mini Classic “proved a hit in every region” and sold 5.28 million units.
Meanwhile, Amiibo figures and cards sold grew on the previous financial year to approximately 10.30 million figures and 5.80 million units of cards.
Safe to say, Nintendo is at a high-point at the moment and its new targets are ambitious.
If the company can continue this momentum there’s no reason it couldn’t meet its targets. If it does so, perhaps its share price will return to the heady days of 2007, the height of the Nintendo Wii and DS success.