Analyst Atul Goyal from Jeffries has been optimistic about the Switch for a long time. And his optimism isn’t slowing down — he believes that the Switch could drive higher revenues than the Wii, the most successful Nintendo home console ever.
In a letter to investors, he states that the Switch’s appeal to core gamers could drive higher earnings than the Wii. He said:
Switch has turned out to be a stealth hit and is positioned to drive Wii-type [the company’s last successful console] software sales and profits cycle. Switch’s appeal to core-gamers (vs. Wii to casual gamers) is likely to drive higher attach-rate and higher earnings than Wii-era.
And with the success of the Switch, Goyal believes that Nintendo profits will rise in the coming years: 189 billion yen in fiscal 2018 and 423 billion yen in fiscal 2019. That’s compared to “just” 29 billion yen that Nintendo themselves estimate for the current fiscal year.
Because of this, he recommended his clients to buy Nintendo stock now, even though the stock is at its highest in years.
Nintendo president Tatsumi Kimishima has said that the company could sell 110 million Switch consoles. However, a few weeks later he questioned whether they could sell 10 million this year.
This is just one of the conflicting reports about just how many units Nintendo expects to sell this year. Officially, the number is 10 million, but unofficially, it could be as high as 18 million according to manufacturers.
Goyal ended his note with this bit: “We believe this is the most powerful and attractive line-up of any Nintendo game console ever”.