Analyst Estimates Nintendo Switch Will Sell 4 Million Units In China By March 2020

Analyst Estimates Nintendo Switch Will Sell 4 Million Units In China By March 2020

An analyst has put out a very bullish prediction for how Tencent’s Nintendo Switch will sell in China.

London equity firm Pelham Smithers has told clients that they expect 2 million to 4 million Nintendo Switch consoles to be sold in China by March 2020. This is a very optimistic prediction, as the Nintendo Switch has currently sold about 50,000 consoles in China, according to Niko Partners.

If Smithers’ prediction comes true, Nintendo could see its stock increase by up to 50%. Here are more key points from Smithers:

  • Switch hardware sales in China may range between 2 million and 4 million units in fiscal 2019 and between 3 million and 6 million the following year. Software sales will range between 6 million and 12 million in the current period and 15 million and 30 million in the period ending March 2021.
  • China could contribute between 11.6 billion yen and 23.1 billion yen to Nintendo’s operating profit this year and 27.8 billion to 55.6 billion yen in the next.
  • Smithers forecasts a ratio of three game purchases for each hardware unit sold in both years.
  • He also assumes Tencent takes a 30% share of software sales income, while all of the hardware revenue goes to Nintendo, and that the two companies split the marketing costs.
  • Nintendo’s sales in China may be capped by the company’s unwillingness to significantly increase production volume of the console and risk building up unsold inventory.

What do you think of their estimates?

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