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The Nintendo Switch is ubiquitous and somehow still overlooked. The handheld console is so wildly popular and the company that created it – and the IP that drives sales – is so entrenched in the culture, that entertainment consumers often forget about the Bowser-level degree of domination afoot1.
And, lately, Nintendo has been stomping its monster-y (but somehow adorable) feet.
This week, Nintendo took a stock hit after the release of the Switch 2 was pushed to 2025. But that hit came only after Nintendo increased its annual sales forecast for the Switch to 15.5 million units, up a neat 500,000 (the company's fiscal year ends in March). And the OG Switch has been out for… seven years. Even more impressively, the Switch was the best-selling console globally from 2017 until the PS5 hit in 2022. On the back of those kinds of leveled-up sales and a big box office win2, Nintendo stock is up 14% this year.
The company doesn't actually need to produce a new console to produce unbelievable sales. Why? It's Nintendo and that is enough.
The thing about Nintendo is that it is a video game company that doesn't precisely compete with other video game companies. Ostensibly, Big Mario is in a three-way brawl with Sony, which makes the PlayStation, and Microsoft, which makes the Xbox, but the three companies have two audiences. The audience for Smash Bros. is an owned audience of people who like to play games but aren't looking for an immersive experience. It's different than that second audience of gamers. Lots of kids. Lots of stoners. Lots of stoners with kids. This creates tailwinds for Nintendo because…
- Nintendo doesn't really have to worry about specs. The Switch is an impressive product because it's beautifully designed for play, not because it's packed with RAM or has a one-of-a-kind display. Nintendo doesn't have to chase those kinds of numbers.
- Nintendo doesn't have to worry about franchise exclusivity, which is what drives the competition between Sony and Microsoft, both of which are selling a means to play Call of Duty
The audience for Call of Duty is different and divided. CoD is available on multiple platforms, which is why Sony and Microsoft are in a perpetual battle over franchise exclusivity (and why the Federal Trade Commission sued Microsoft after the tech giant merged with Activision Blizzard).
TL;DR: Nintendo is like Oddjob in Goldeneye: Hard to hit.
None of this is to say that Nintendo is trampling the competition – it boasts more profits than Xbox and PlayStation, but less revenue – just to say that Nintendo is wildly popular with people who aren't obsessed with this stuff. That's why Nintendo has had success turning its IP into Disney-esque experiences and why the recently announced "Super Nintendo World" at Universal Studios makes sense. Mario and Zelda have Q scores in a way that the characters on Grand Theft Auto do not.
In fact, Nintendo may not really be in competition with Sony or Microsoft at all. The non-gamer gamer market has moved more in the direction of smartphones. There were 55.6 billion mobile game downloads in 2022, the last year for which it has data available, according to Zippia. But where the number of annual mobile game downloads increased by 129% between 2015 and 2022, that number increased by only .5% in 2021. That means both that growth is slowing and mobile gaming is dominant – it now accounts for 77.7% of total gaming industry revenue.
What is unclear is whether that expands the audience for Nintendo to include everyone ready to make the jump from Plants vs. Zombies to something more substantial or whether this could limit growth because it presents an alternative. Probably a bit of both. What's very clear is that Sony and Microsoft are ceding the space. The Switch won the handheld console war. Sony hasn't released a handheld model since 2011.
1 To put it in (cringier) gamer terms: it's pwning.
2 All due respect to Pokémon Detective Pikachu, a few Tomb Raider attempts, and the recent Uncharted adaptation, but only the Sonic movies come anywhere close to Illumario's league. Mario was last year's second-highest grossing movie worldwide (no one could compete with the Barbie behemoth) and is the 17th highest grossing movie of all time, not adjusting for inflation. Just below it? Star Wars: The Last Jedi, Black Panther, and the last Harry Potter movie.
