The Nintendo Switch 2 is expected to be announced on Thursday, according to rumors across the industry. And on the eve of that announcement, the game industry is watching closely because there is so much at stake.
We don’t have insider info on this rumor, but the implications are interesting.
In terms of console sales, Matthew Ball, CEO of Epyllion and industry seer, noted in a 220-page slide deck that Nintendo provided most of the growth in the previous two generations of game console sales, as the eight-year-old Switch has sold more than 146 million units and 1.3 billion games to date.
Those sales have started to taper off and that’s why Nintendo is launching the new system. The whole industry has been in a funk, with 34,000 jobs cut in the last 2.5 years in the game industry. Venture investment is down, mobile gaming growth has stalled, the pandemic boom has fizzled, and the industry has shrunk at a time when some other industries are still growing. For this year, it may be up to the Switch 2 and Grand Theft Auto VI to rescue game sales.
In short, the game industry needs Nintendo’s Switch 2 to be a success for more than Nintendo.
Ball said that the Switch benefits Nintendo mostly. Switch users buy 25% to 33% fewer games than PlayStation/Xbox owners, and over half of sales are Nintendo’s games versus 10% on PS/Xbox.
The Switch’s sales are not from net new players, but from the cannibalization of living room and handheld console sales. Both the 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 those problems.
For the Switch 2 to win, however, it will have to contend with the SteamDeck, which, as a kind of PC, has helped the PC gain market share in recent years on the consoles. And Steam’s largest player base in now in Asia and in China in particular, Ball said.
As an aside, Digital Trends reported that the processor in the new Nintendo machine will be Nvidia’s T234 mobile processor called the T239. Based on an octo-core ARM A78C CPU cluster and custom graphics unit based on Nvidia’s RTX 30-series Ampere architecture. I’m very interested to know if this will make cross-platform game development harder or easier. The hardware for the Switch 2 will likely be similar in capability to the PlayStation 5, Xbox Series X/S and the SteamDeck. That means companies will not have to create totally separate versions of a game to run a title on the Switch 2.
But we’ll see if that is how the reality turns out, given that the PlayStation/Xbox hardware is based on AMD and Nintendo is using Nvidia again.
“The PS and Xbox are x86 processors and run a Window’s like OS and use DirectX 11 and a slight variant of it in the PS,” said Jon Peddie, graphics analyst at Jon Peddie Research, in a message to GamesBeat. “Nintendo runs its own Linux-like OS, and the API is proprietary. There’s not much chance, or desire as far as I can tell, in having cross-platform capability. Nintendo is leveraging the work Nvidia has done in the automotive area in terms of display software and tech.”
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