TOKYO – Nintendo Switch gaming console sales more than doubled Sony’s PlayStation 5 during the year-end holidays, highlighting the company’s ability to turn pandemics into an opportunity to attract new gamers .
The Kyoto-based company sold more than 11 million Switch units, including their Switch Lite handset, between October and December – up 68% over the previous quarter. Sales also increased 7% compared to a year ago as the game market saw explosive growth due to the pandemic and was further stimulated by demand during the 2020 holiday season.
Sales have remained strong even after the holiday season, according to Nintendo President Shuntaro Furukawa. “Demand has been stronger than expected even after the New Year,” Furikawa said at the company’s online employment conference last week.The friendly nature of the Switch family and the widespread appeal of customers -users, including children and women, continue to attract new gamers and support high sales.
Sony launched the next-generation PS5 game console in November, around the same time as Microsoft’s release of the Xbox Series X and the S. Series at the lower end. At the end of December, Sony had sold 4.5 million PS5 units while tracking game sales. VGChartz site and other stores put Xbox at around 2.5 million units.
Masahiro Ono, an analyst at Morgan Stanley MUFG Securities in Tokyo, said Sony has failed to put money on demand for the PS5. “Given that it was holiday time and that people were staying at home due to the pandemic, Sony could have benefited greatly from the nesting demand,” he said. While Nintendo was able to capture new gamers, “It was a no-brainer to be able to roll out more PS5 devices,” Ono said.
A major reason that hindered Sony’s release of the PS5 is the lack of semiconductor, as demand for chips used in other products such as smartphones and communication stations has skyrocketed.
For example, the PS5 is a state-of-the-art console, powered by a hefty graphics processing unit to produce the high-quality graphics that attract gamers. Advanced U.S. Micro Devices, which supply chips with Sony as the GPU and central processing unit, have acknowledged that a global shortage is likely to affect the game industry.
AMD, which also makes custom chips for the latest Xbox, has warned that unprecedented demand will affect production capabilities and that supply could remain tight for both the PS5 and Xbox in the first place. half of the year.
Sony’s Chief Financial Officer, Hiroki Totoki, has accepted the chip crushing, saying, “We will make every effort to obtain sufficient supplies. [and] do our best to meet demand. “
This isn’t the first time Nintendo and Sony have surpassed the end-of-year shopping season. In November 2006, Nintendo switched off its Wii console while Sony launched a PS3.
By the end of the fiscal year which ended in March 2007, Wii had sold 5.84 million units compared to 3.61 million units for PS3. The following fiscal year, Wii sold twice the PS3 units. Many consider the PS3’s launch price of $ 599 – the highest of any major console at the time – to discourage gamers.
“Wii was a social wonder,” recalls Kenji Fukuyama, an analyst at UBS Securities in Tokyo. Like the world-famous “Animal Crossing: New Horizons” and Switch, “Wii has attracted men and women of all ages with popular software like Wii Sports,” he said.
Sony seemed to have learned from its mistake, releasing PS4 in 2013 at a lower cost than PS3. The PS4 went on to sell more than 114 million units worldwide while Nintendo hit a snag, that is with the 2012 release of Wii U, which led to disappointing sales.
Nintendo plans to sell 26.5 million Switch consoles for the year through March, but many analysts believe this could be too conservative. UBS’s Fukuyama estimates that Switch sales will reach 27.5 million units, backed by software that will soon be released as “Super Mario 3D World + Bowser’s Fury.”
However, Switch is entering its fifth year on the market. “Switch sales have been at the height of this fiscal year and will start to decline next year,” Fukuyama said. He noted, however, “An increase in download sales and also entry into new markets such as the Middle East, South America and Southeast Asia could reduce employment decline. “
Morgan’s Ono also agrees that it will be difficult for Nintendo to maintain the same level of Switch sales next fiscal year. But for Sony, “It will be a year of popularizing the PS5,” he said.
Sony has been able to gather a large community of online gamers through their membership-based game services such as PlayStation Plus, which now has over 47 million users and over 110 million viewers- monthly active usage on the PlayStation Network.
“Rather than PS5 selling PS4 sales, maintaining this large group of online gamers is Sony’s biggest mission,” Ono said.