DFC Intelligence has made a bold prediction in their latest Video Game Trends report. They believe Nintendo will be the market leader in the next generation of consoles, and either Sony or Microsoft will suffer.
As reported by NintendoLife, DFC believes that Nintendo will sell 15 to 17 million units of the Switch 2 upon its launch, and be able to raise that to about 80 million by 2028. DFC’s argument is simple; the Switch is a huge success, creating a large consumer base. The consumer demand is high, with the eight year wait being particularly long between new consoles.
The key to Nintendo’s success will be how well they can catch up to demand with supply. We imagine other industry analysts have shared similar advice to Nintendo in private and public as well. And it would definitely be a great explainer for why Nintendo seems to be all too willing to keep holding off the announcement and launch of their next console.
DFC refers to the Switch 2 and Grand Theft Auto 6 as two of the biggest products the industry has ever seen, and both of them are coming next month. They paint an interesting picture of the vide game industry with its internal contradictions; while it experienced market decline in the last two years, this only happened because the pandemic created ‘artificially inflated revenue’ from 2020 to 2022, raising expectations for the next years too high.
DFC says the industry decline came at 4 %, which is thankfully not as high as we feared. They also argue that video games are characterized by short declines and longer boom periods, so the next five years are going to be the biggest it has ever seen. In fact, DFC predicts there will be a 4 billion gaming population on consoles and PC by 2027.
If that’s the case, why is there no room for all three console makers to succeed? DFC doesn’t give a direct answer for this, but they say that they are making scenario planning for many hypotheticals. In their report, DFC also argues that hardware makes more money than software, and that “distribution is
the most crucial driver of success in the game space.”
They note that Xbox Series X|S did not sell as well as expected, and likewise, multigame subscriptions like Game Pass and EA Play did not grow as huge as expected as well. But those multigame subscriptions still make up 15 % of total industry revenue, and Microsoft is in a strong position to become the world’s largest software publisher.
In contrast, DFC says that Sony’s strong install base and popular IP only gives them a ‘slight edge.’ We imagine that’s a claim PlayStation fans won’t be happy with, but DFC is also looking at things Xbox fans aren’t happy about. In particular, Microsoft’s willingness to bring their games to PlayStation might make them the bigger company over PlayStation. DFC does expect both companies to release new hardware by 2028. And at that point, Nintendo could have that 80 million unit hardware lead.
We’re sure you’re already forming your own opinion on DFC’s assessment, but we should remember that DFC doesn’t make these claims to drive engagement on Twitch and YouTube. This is actual advice to game companies, suggesting that their business will be safe if they work with Nintendo, but they may not be as safe if they make exclusives for Xbox, and also PlayStation, in the future.
