Credit Suisse now forecasts Nintendo to sell 130 million Switch consoles through to 2022

http://www.barrons.com/articles/nintendo-lifted-to-outperform-by-credit-suisse-1505718700

Credit Suisse has upgraded Nintendo (7974.JP) to outperform from neutral as the broker now expects the Japanese video games maker to sell more of its Switch consoles over a longer sales cycle.

The broker also hiked its target price from JPY40,000 a share to JPY55,000, implying almost 44% upside. Credit Suisse now forecasts Nintendo to sell 130 million Switch consoles through to 2022, up from 70 million, as it says the device sells like a handheld console rather than a traditional console. Here's Credit Suisse analyst Keiichi Yoneshima in his own words:

As Nintendo’s Switch is a unique game platform for use as either a console or handheld, there was initially some uncertainty over whether its sales cycle would more closely resemble that of a console or handheld. Although the Switch is currently categorized as more of a console, we expect it to sell like a handheld. Many users are in fact using the Switch as a portable according to a Famitsu survey of users. We previously projected a sales peak at about three years after launch (i.e., in FY3/19) on the assumption of a console-like sales cycle. Now that the Switch looks more likely to sell like a handheld, we update our sales forecast to reflect a longer sales cycle. We now expect the Switch to achieve peak sales about five years after launch (i.e., around FY3/20–21) like a typical handheld game device. We also raise our peak-year sales forecast from 25mn to 31mn units.

Meanwhile, Jefferies analyst Atul Goyal says that the release of two blockbuster games on Switch is further evidence of the console's growing popularity.

Chinese tech giant Tencent announced last week it will launch its most popular game 'Honor of Kings' on the Nintendo Switch. Prior to that, Grand Theft Auto creator, Rockstar, announced plans to launch its detective adventure game, L.A. Noire. Here's Goyal in his own words:

It was a surprise when Take Two studio Rockstar (creator of GTA and Red Dead Redemption) announced L.A. Noire game for Switch (in addition to launch on PS4 and XBO). This is a sign that Nintendo platform is expected to be big and attractive enough for third party developers to dedicate resources towards game development for Switch.

Goyal rates Nintendo a buy with a target price of JPY59,100.

Nintendo shares, which last traded at JPY38,250 apiece, have gained 56% this year.

@airraidjet: Very bold predictions! It will all depend on that software flow continuing on after 3 years.

Are they high?

I hope so. Run with the ball Nintendo! Run as fast as you can!

Okay, let's calm down a bit. It's more likely going to between 60 and 80 million imo, depending on support, momentum, and price cuts.

I'd like to have whatever it is they are smoking.

Yea waay too ahead of themselves atm...wait for 2nd year & 3rd year to see if the games are still continuing to flow as much as they are in the first year first. :P

looool no way nintendo has to use to their fake shortages tactics to make it seem like their in demand soon gamers will release this console has no content on it. breath of the wild and mario is going to keep it aflot for another year. come on they still dont even have VC yet

*yawn*

Bwahahahahaha, thanks for the laugh. Not saying the switch won't do well, but it's not going to do Wii numbers as it just doesn't have that kind of casual appeal.

I'd be very surprised if it cracked 100 million. But hey, who knows.

Yeah that sounds stupid.

Not going to happen

Well we all know that the Switch is going to outsell XB1 total sales in the next few years, but 130 mil?? not going to happen.

That sounds highly unlikely.

Maybe by 2025 or 2026, if the Switch has a Gameboy-like run with upgrades and price cuts along the way.

2022 would require clearing significantly more than 20 million units a year. I don't think they can even make that many per year yet.

I really don't think this is likely.

I mean, the Switch certainly has the potential to be one of the best-selling systems of all time...but this sounds logistically impossible.

Not that unrealistic. Don't forget the 3DS is still going strong.

Unlikely, I expect it to be 3DS popular rather than Wii/DS popular. Unlike the 3DS though I expect it to slow down later rather than the 3DS which had an awful start then turned it around with a price cut.

I believe it.

I've been saying it since launch, the switch will be a hit. Nintendo combined their most successful business (handheld) with their moderate console business. Friggin genius. Everytime I use my switch it feels like magic is coming out of that thing. Games that look that good on the go is pure Nintendo razzle dazzle.

Haters gonna hate. Doubters gonna doubt.

Here comes the switch to knock those muthaz out.

the logic is sound by the conclusion may be off. But it could end up being true.

The Switch has very high demand with gamers and non-gamers alike. The huge casual appeal of the system will drive software to it, and that will keep the gamer demand high.

It also has appeal to young people and older people. A lot of kids take tablets to high school to play games with, and the Switch is the perfect device for that because of the joycon setup. It's also ideal for older gamers who live in a house and have to share screens with a family, or anyone who travels a lot. I don't think the demand for this will come down for a long time.

Once a device snowballs, hitting the 130 million sold mark is not as big a challenge as it seems. That's how success works. Great sales lead to more games, which leads to more sales and more games, and after that gets going it becomes an "IT" device and word of mouth will start giving you free marketing, all while you get more money to do more marketing yourself. It would be easier to push the Switch from 70 million to 130 million than it would be to push the WiiU from 14 million to 20 million.

@Bread_or_Decide: Most of Europe is now overstocked, even though shipments are still low. Shortages are now mild in the US, though demand is still above the peak of the 3DS. This isn't outselling Wii worldwide. In Japan it'll outsell Wii within 2.5 years (conservative estimate), but anywhere else? Nah.

All Europe wants is a playstation and GTAV. It's Sony land over there.

Japan and USA will lead the way in Switch sales. I think Switch will have a second wind, prompted by the first console Pokemon game, and perhaps a price drop or new switch designs. The thing has taken off and yet I feel it has even yet to really take off.

That seems like a conservative estimate to me. I think the Nintendo Switch will sell considerably more than that.