Nintendo has announced the upcoming release of its next-generation console, Switch 2, reigniting competition with Sony's PlayStation 5 (PS5). As Sony maintains its lead in the global console market, Nintendo aims to regain market share, while Microsoft's (MS) Xbox is losing ground, reshaping the three-way competition.
◇ Switch 2, 4K performance and exclusive titles to counter Sony
According to the gaming industry on the 21st, Nintendo is fully engaged in preparations to reclaim its leadership in the console market with the launch of Switch 2. On April 2, it will reveal detailed specifications and release schedules for Switch 2 during the new product announcement event "Nintendo Direct."
Following this, an event allowing hands-on experiences with Switch 2 will be held sequentially starting from New York in the U.S. and Paris in France on April 4, and will be held in Goyang, Korea from May 31 to June 1 at KINTEX.
Market research firm DFC Intelligence projects that Switch 2 will sell between 15 million and 17 million units in its launch year alone, with cumulative sales exceeding 80 million units by 2028. Switch 2 has significantly enhanced performance through 4K resolution and Deep Learning Super Sampling (DLSS) technology, while maintaining the strengths of its predecessor, portability and consolidation functionality.
Leveraging renowned Nintendo exclusive intellectual properties (IPs) such as "The Legend of Zelda" and "Super Mario," Nintendo plans to target its loyal customer base with a family-friendly yet powerful performance that also appeals to core gamers. With expectations that Switch 2 will be priced between 500,000 and 600,000 won, it is assessed to have competitive pricing compared to Sony's "PS5 Pro," which is priced at around 1.1 million won.
DFC Intelligence noted, "Nintendo has advanced the launch timing of its new product compared to competitors and is likely to benefit from the first-mover advantage amid limited competition with Sony and MS," adding that "Sony's PS6 and MS's next-generation Xbox may not significantly increase their market share."
◇ Sony maintains an edge with AAA exclusive titles, while MS struggles
According to market research firm Counterpoint Research, Nintendo enjoyed a golden period in 2020 with a 65% market share in the global console market with its previous model, Switch. However, by 2023, its market share declined to 37%, dropping to second place behind Sony. This decline is attributed to the aging hardware of Switch and Sony's PS5, which has gained market dominance based on exclusive titles and technological strength.
During this period, Sony solidified its market leadership by successfully recovering its supply chain for the PS5 and increasing its market share to 49% through exclusive titles. Titles such as "Marvel's Spider-Man 2," "Baldur's Gate 3," and "Alan Wake 2," which are AAA titles (blockbuster games featuring large budgets and high quality), drove PS5 sales. Subscription services like "PS Plus" also accounted for over 70% of Sony's gaming revenue, providing a stable revenue base.
The Xbox from MS recorded a 19% market share in 2021 and 2022, but in 2023, its share fell by 5 percentage points to 14%, lagging significantly behind Sony (49%) and Nintendo (37%). The lack of exclusive content and weakening hardware differentiation are analyzed as the main reasons. MS is reportedly preparing to launch its next-generation Xbox by the end of next year.
DFC Intelligence analyzed that the Xbox is unlikely to stand out in the hardware competition any longer. In the future, the console market is expected to establish a dominant landscape with only Nintendo and Sony as the two leading platforms, while Xbox faces high likelihood of long-term obsolescence.
A gaming industry insider remarked, "MS's Xbox has significantly diminished its standing in the hardware competition due to a lack of exclusive content," adding that "as a result, it is shifting its strategy towards cloud gaming and subscription services, but it is very likely to fall behind Sony and Nintendo in the hardware-based competitive landscape."