Nintendo's new console may 'Switch' its fortunes: 8 million shipped units predicted in first 13 months

Japanese gamers buy the new video game Nintendo Switch games console by Nintendo Co. during the first day of sales worldwide in Tokyo, Japan on March 03, 2017.
Richard Atrero de Guzman | Anadolu Agency | Getty Images

Nintendo may have hit the jackpot with its new hybrid console, Switch, and the accompanying "Legend of Zelda: Breath of the Wild" game, with analysts and investors taking note.

The stock is up nearly 8 percent since last Friday's global launch.

Though official sales numbers will not be released until later in the year, early indications suggest both the console and the game are a hit with fans.

A reporter for the New York Times tweeted this week that, according to Nintendo of America President Reggie Fils-Aime, Friday-Saturday sales for the Switch "exceeded first 2-day sales in Americas for any system in Nintendo history."

Nick Wingfield tweet 2

Local Japanese magazine Famitsu reported as of Mar. 5, the Switch sold an estimated 313,700 units domestically, Nomura analyst Junko Yamamura said in a Monday note.

It remains to be seen how the Switch's first week fared compared to Nintendo's best-selling Wii console, which reports said had sold 600,000 units in the first eight days.

But IDC's research director for gaming and VR/AR, Lewis Ward, told CNBC he expects the Switch will ship approximately 8 million units worldwide through the end of first quarter-2018.

"Switch is on track to ship 2 million by the end of March, so that's a solid start. I expect the Switch to sell much better in its first year than Wii U, but fewer than Wii did in the same period," said Ward.

Meanwhile, on review aggregating website Metacritic, Breath of the Wild was the fourth-best ranked game of all time (as of Friday) with a score of 98.

"Breath of the Wild is being heralded as one of the best games of the year already," Ward said. "I suspect that this Zelda launch title is a key reason why first week sales have been strong."

The Switch is Nintendo's first major home console since the Wii U failed to live up to expectations. It is a hybrid gaming system that is part console, part handheld device and part tablet, allowing for three different styles of play.

Preliminary figures have impressed analysts because the console was launched in March, instead of the usual holiday-season. There were also concerns over limited supply and a relatively steeper price, according to Jefferies equity analyst Atul Goyal.

Nintendo missed a meeting on the Switch: Analyst
Nintendo missed a meeting on the Switch: Analyst

Goyal attributed the initial sales numbers to pent-up demand from die-hard Nintendo fans, the new Zelda game and the pipeline of games to come, including "Splatoon 2," "Mario Kart Deluxe" and "Super Mario Odyssey."

"This is a nicely dispersed pipeline," he said in a note this week.

The console's flexibility was a big appeal for Singapore-based gamer and Nintendo fan, Deli Lo, who said he had owned every console and handheld from the Japanese company — except the Virtual Boy — along with every iteration of Sony's PlayStation, and legacy consoles like the Atari Jaguar and Sega Mega Drive.

"For someone who has work and family commitments, time is a constraint and we do not have the luxury to sit in front of the TV playing games all night long," he said. "The portable aspect of (the Switch) is very useful."

The local multiplayer option offered by the so-called Joy-Con controllers is an important feature that many modern consoles lack, according to Lo. As for downsides, he pointed to battery life — a common issue for portable devices — and comparatively lower resolution.

Reports have also said that some users were facing a variety of hardware issues, including syncing problems with the controllers, which Nintendo has officially addressed on its support webpage. Meanwhile, a Reddit user reported a blank blue dead screen on a device.

Serkan Toto, CEO of consultancy firm Kantan Games, told CNBC he thinks the syncing issues with the Joy-Con controllers is "overblown, just like Apple's 'bendgate' a while back."

"The screen of death is a known problem for all types of consoles, especially the first versions. It's not a mass phenomenon," Toto added.