Nintendo Switch has enjoyed strong sales through two years on the market, including record-breaking attach rates for Switch software. Unfortunately, that still wasn't quite enough to appease investors after Switch sold below Nintendo's expectations, causing them to revise their forecast downward from 20 million to 17 million.
Was this simply a case of Nintendo overestimating their sales potential and being too bold? Apparently, Shuntaro Furukawa doesn't think so. Speaking with shareholders, Nintendo's president expressed that the company has not yet succeeded in fully conveying the value of Nintendo Switch and its games to customers.
"As we look back so far (for this fiscal year), we now evaluate that our efforts to fully convey the appeal of Nintendo Switch hardware and software to the number of new consumer we originally hoped to reach were insufficient." — Shuntaro Furukawa
Furukawa also noted that Nintendo's sales were lower than anticipated from April through October, a period that saw few major releases from Nintendo. In other words, Nintendo thinks there weren't enough games and they didn't do a good enough job promoting them. Going forward, Nintendo aims to "further enrich our software lineup and convey its appeal to consumers, so that they decide this (calendar) year they would buy a Nintendo Switch."
Later on in the Q&A session, Senior Executive Officer Satoru Shibata (formerly Nintendo of Europe's President) chimed in and gave some specific examples of ways in which Nintendo believes they've fallen short at communicating value and reaching consumers. He pointed to the holiday lineup of Super Mario Party, Pokémon: Let's Go and Super Smash Bros. Ultimate as areas where, despite incredibly strong sales, Nintendo believes they haven't yet finished their marketing mission.
"We feel very fortunate that the initial sales pace for Super Mario Party, Pokémon: Let's Go, Pikachu!/Pokémon: Let's Go, Eevee!, and Super Smash Bros. Ultimate has been so strong. However, that doesn't exactly mean we're satisfied. Before their release, we challenged ourselves to see how we could expand our consumer base with each of these titles.
"For Super Mario Party, the question was "How could we reach pepple other than children and parents?" With Pokémon: Let's Go, Pikachu!/Pokémon: Let's Go, Eevee!, we asked "How could we reach people who have played Pokémon GO, for example, but never played Nintendo Switch? With Super Smash Bros. Ultimate, we asked "How could we reach not only fans of the Super Smash Bros. series, but also those who had never played it before?" If you look at the demographics of the consumers who purchased each of these titles, I'm not convinced we've completely overcome these challenges yet.
"So our aims are to keep working on them this year, to expand sales of these titles to new consumer demographics, and to keep selling these games for a long time, which is one of our strengths." — Satoru Shibata
Those three titles in questioned shipped out over 27 million combined copies during the holiday season, accounting for almost half of all Nintendo Switch software sales during that period. Even so, it appears Nintendo believes they are far from tapped out. Key Switch titles have enjoyed evergreen sales long after launch, and Nintendo is aiming for this with 2018's holiday lineup. Nintendo has also been releasing commercials focused on Switch's multiple play styles recently to convey the value of the hardware better.