The Nintendo Switch 2 is expected to be announced on Thursday, according to industry rumors. And on the eve of this announcement, the video game industry is watching closely because the stakes are enormous.
We don’t have inside information on this rumor, but the implications are interesting.
In terms of console sales, Epyllion CEO and industry seer Matthew Ball noted in a 220-page slide presentation that Nintendo provided the bulk of the growth in game console sales of the previous two generations, as the eight-year-old Switch has sold more than 146 million units and 1.3 billion games to date.
These sales started to decline and that is why Nintendo is launching the new console. The entire industry is in a slump, with 34,000 jobs lost in the last two and a half years in the video game industry. Venture capital investment is down, mobile gaming growth has stalled, the pandemic boom has petered out, and the industry has shrunk at a time when other industries are still growing. For this year, it will perhaps be the Switch 2 and Grand Theft Auto VI to save game sales.
In short, the video game industry needs Nintendo’s Switch 2 to be a success beyond Nintendo.
Ball said the Switch primarily benefits Nintendo. Switch users buy 25-33% fewer games than PlayStation/Xbox owners, and more than half of sales are Nintendo games compared to 10% on PS/Xbox.
Switch sales come not from net new players, but from the cannibalization of home console and handheld console sales. PlayStation and Xbox Series X/S sales are down after 49 months of sales. The Switch 2 will have to sell a lot to make up for these problems.
For the Switch 2 to win, however, it will have to contend with the SteamDeck, which, as a sort of PC, has allowed the PC to gain market share over consoles in recent years. And Steam’s largest player base is now in Asia and China in particular, Ball said.
By the way, Digital Trends reported that the processor of the new Nintendo machine will be Nvidia’s T234 mobile processor called T239. Based on an octa-core ARM A78C processor cluster and a custom graphics unit based on Nvidia’s Ampere RTX 30 series architecture. I’m very interested in whether this will make cross-platform game development harder or easier. The Switch 2’s hardware will likely have similar capabilities to the PlayStation 5, Xbox Series X/S, and SteamDeck. This means that companies won’t need to create entirely separate versions of a game to run a title on the Switch 2.
But we’ll see if that’s how reality turns out, given that PlayStation/Xbox hardware is AMD-based and Nintendo is once again using Nvidia.
“The PS and Xbox are x86 processors and run a Windows-like operating system and use DirectX 11 and a slight variation of that in the PS,” Jon Peddie, graphics analyst at Jon Peddie Research, said in a message to GamesBeat. “Nintendo uses its own Linux-like operating system and the API is proprietary. As far as I know, there isn’t much chance, or desire, to have cross-platform capability. Nintendo leverages the work Nvidia has done in the automotive space in terms of software and display technology.
