DFC Intelligence has a new financial forecast with huge claims about the Switch 2, but also some dire predictions for the industry.
They started their report with this:
The Nintendo Switch 2 is arguably the most important product launch in video game history. Not only does DFC expect it to be the fastest-selling console system ever, but it has the potential to lift a video game industry that has been grappling with product delays, rising costs and economic uncertainty.
Yesterday, DFC CEO David Coles told Bloomberg that Grand Theft Auto 6’s delay was a huge blow for the PlayStation 5. In this report, DFC extends that to Xbox Series X|S, explaining the game was expected to increase sales for both consoles. And this is where their dire predictions come in.
DFC forecasts North American software sales will decline by 2 %, while Europe software sales will stay flat. The only saving grace is the Switch 2, and the reason for that won’t be its US launch, but Japan. Because Nintendo regained popularity in Japan, and they focused on that market more than the US, Japan could see a 25 % rise in overall software sales. This will add up to 3 % in growth for the industry this year.
If DFC’s prediction is correct, unfortunately, it highly likely means that layoffs will continue for the video game industry in the US and Europe. Japan has an appetite for foreign games, but they are still highly focused on domestic companies and franchises.
DFC refers to the Switch as “the key driver of industry growth for 2025”. They believe Switch 2 demand could go as high as 20 million units, but Nintendo is unlikely to meet that demand. They do believe Nintendo will surpass their goal of 15 million, and sell as much as 16 million by the end of the financial year on March 2026. DFC also believes Nintendo can sell as much as 100 million units by 2029, concluding:
Meanwhile, the Switch 2, along with the growth of mobile PC game devices, is redefining the landscape of the video game industry. Nintendo can no longer be considered as playing in its own separate space. With the Switch 2, Nintendo is positioning itself as a central player in the broader console and PC gaming ecosystem. The next few years could see Nintendo for the first time becoming the primary partner for third-party game publishers. This dynamic evolution will shape the future of gaming.
In spite of the glowing words for the Switch 2, this is not that optimistic a forecast for the industry. Nintendo’s potential success, even in DFC’s most optimistic forecast, won’t be enough to reverse the expected contraction in the video game industry.
In the bigger picture, DFC believes Shuntaro Furukawa has veered away from Satoru Iwata’s vision and closer to Hiroshi Yamauchi’s, to once again take Sony and Microsoft head on. The debate around the Switch 2’s power belies the real situation; even less performant versions of 3rd party games on the Switch 2 could still sell better there than on PlayStation and Xbox. Sony and Microsoft have handheld consoles in development, but DFC believes Nintendo will still become the market leader in a few years.
And will Nintendo’s success, alongside Sony’s and Microsoft’s actions to compete, be enough to get the industry back on track to growth? That’s really what we should all be cheering for, so that not only will developers keep their jobs, but new games and even new studios can come up in the coming years. Perhaps this is partly wishful thinking, not just for the pencil pushers at DFC, but for gamers and people in the industry. But it’s a wish that we all need to see come true.
