On December 10, Nintendo began selling its Switch video game consoles and China for the first time. Although the region has resisted widespread adoption of other systems, the hybrid home/mobile platform seemed like an exception. Indeed, Chinese e-commerce platform JD.com reported 105,000 locals made reservations to buy the electronic device.
Now, tech equity research group Pelham Smithers forecasts Nintendo will sell up to 4 million Switches in China by March 2020.
Nintendo Expected Chinese Switch Sales
According to the market analyst firm, Nintendo will sell between two million and four million Switches in China by the end of the fiscal year 2019. Moreover, the organization predicts the Japanese corporation will move 12 million units of software to go with its systems. Accordingly, Pelham Smithers believes Nintendo will record $212 million in Sino sales for FY19.
The firm also forecasts strong sales for the system and its games in 2021. The group asserts Chinese consumers will purchase between three million and six million Switches in the year after next. Besides, the organization holds Nintendo will move between 15 and 30 million software units during that period.
If so, the electronics entertainment corporation will add $512.4 million in Sino income to its bottom line next year.
China’s History with Gaming Consoles
Nintendo’s ability to make a big splash in the Chinese gaming market is notable for several reasons. For one thing, foreign-made home gaming systems haven’t had traction in the region for nearly two decades.
While Nintendo’s video game consoles have flourished in regions like North America and Europe, the company hasn’t been as successful in China. Notably, the Communist nation maintained a ban on foreign-made home gaming platforms from 2000 to 2014.
During that period, the Japanese electronics giant attempted to fill the presumed void with its handheld systems. However, the firm’s Game Boy Advance, Nintendo 3DS, and a China-exclusive portable platform called the iQue failed to take off. Similarly, after Beijing lifted the console ban, Microsoft and Sony attempted to break into the Sino market with limited success.
As a result, the Chinese gaming market is presently dominated by free-to-play PC and mobile titles.
Overseas gaming hardware companies have struggled to find success in China because of the region’s consumer policies. The Sino censors thoroughly content reviews new games before they can go on sale locally. As such, console makers have had to launch their systems in the region without a lot of accompanying software. Indeed, Nintendo released the Chinese version of the Switch with “New Super Mario Brothers U Deluxe” as its only title.
With the region’s history, Nintendo’s latest Chinese platform launch likely would’ve flopped without a strategic partnership with a local firm.
A Crucial Partnership
Given its previous inability to penetrate the Chinese market, Nintendo adopted a new strategy with its latest attempt. The corporation teamed with Sino technology conglomerate Tencent to bring the Switch to the region’s consumers. The Japanese company’s alliance with the Chinese corporation played a crucial role in the console’s successful launch.
In addition to owning parts of foreign titles like “PlayerUnknown’s Battlegrounds” and “Fortnite,” Tencent also developed popular domestic games like “Honor of Kings.” As such, the firm has extensive experience dealing with Chinese content regulations. Moreover, the corporation maintains cloud services that are essential to the Switch’s functionality.
Tencent also owns and operates the popular Chinese social media/payment platform WeChat. Accordingly, the firm interpolated its service with the Switch so Sino consumers can buy Nintendo games in a familiar way. Also, the corporation is currently localizing existing Switch games and porting its titles to the system for future release.
As such, Nintendo’s remarkable success in finally breaking into the Chinese gaming sector could’ve happened without its Tencent partnership.