The Switch has now outsold the N64, but Nintendo sees growth slowing

Nintendo’s Switch has now outsold its N64 console on lifetime sales, but prospects for the portable gaming system look mixed for the next year following a conservative sales forecast.

Nintendo just announced its end of year financials, and in doing so revealed that it sold 16.95 million Switch consoles in the last year, taking it to 34.7 million sales to date and therein surpassing the N64. That annual sales figure is about on par with Nintendo’s target of 17 million — which was revised from an initial (and very ambitious) 20 million — but what happens over the next 12-month period is less clear.

The Japanese company is predicting that it will shift 18 million Switch units over the next financial year, and there are positive and less positive signals to back that up. It would be hard to imagine that demand for the same device continuing for another year without changes.

Will there be new things?

That seems likely, we just don’t know exactly what and when.

“As a general rule, we’re always working on new hardware and we will announce it when we are able to sell it,” Nintendo CEO Shuntaro Furukawa told Bloomberg, although he refused reports that a new, lower-priced model will be unveiled at the E3 show in June.

Beyond new models, there will also be new markets. Nintendo is poised to enter China after it last week secured a key approval to sell the Switch in the country in partnership with Tencent.

Gaming in China is currently in flux — last year was a dismal one for companies like Tencent, but new regulations are incoming — but Nintendo’s catalog of family-friend and cute titles are likely to fare better than more edgy content in terms of approval. Even though the Switch is over two years old, opening China as a market will create a lot of new demand if it is marketed right.

Meanwhile, on the software side, the Switch is performing well, with more than 23 titles now at one million sales or more, while Super Smash Bros. Ultimate and Pokémon: Let’s Go have generated 13.81 million and 10.63 million sales, respectively.

More broadly, Nintendo’s general financial update disappointed investors.

Annual operating profit of 250 billion yen ($2.2 billion) rose by 41 percent, but revenue grew just 14 percent to 1.2 trillion yen ($10.7 billion). For the fourth quarter, operating profit came in at 29.7 billion JPY ($266 million) which was below the 36 billion JPY average for analysts polled by Bloomberg.

Nintendo’s annual forecast was also seen by many as tepid, perhaps because the company was burned by those aggressive Switch sales targets set last year.

“Nintendo is being extra cautious as it wouldn’t want to miss its target again,” games consultant and former TechCruncher Serkan Toto told The Wall Street Journal in a statement.