Is there a sense of security about Nintendo's financial results

The switch is not compatible with software, and if it is a model that pursues replacement demand, replacement demand rises strongly, and 50 million units are initially sold, and if the number of software is installed is 2, the gross margin of the hardware is 10,000 yen, and the wholesale price of the software is 5000 yen, the profit of the hardware is 500 billion yen, and the profit of the software is also 500 billion yen, making a total profit of 1 trillion yen.

In contrast to this, if Switch is software compatible and the model pursues expanding the scale of the platform, demand from new customers is initially 20 million units, the switch platform size is 170 million units, if the number of software installed is 2, the gross margin of the hardware is 10,000 yen, and the wholesale price of the software is 5000 yen, the profit of the hardware is 20 billion yen, and the profit of the software is 1.70 trillion yen, for a total of 1.90 trillion yen It will benefit you.

Well, this is a very rough calculation, but it looks like this as a calculation model, and you can see that the model that pursues expanding the scale of the platform is more likely to make money.

Furthermore, in the following year, the switch platform size was 190 million units, profit was 1.90 trillion yen, and in the next two years, the switch platform size was 220 million units, and profit grew steadily to 2.20 trillion yen.

There are still benefits to the platform business model.

One of them is the possibility of accumulating software.

Since software is highly compatible, the life span of the software is very long, and theoretically, the life span of the software is limitless.

Then, the software storage type starts. If 3 masterpieces of software are developed per year, it will become a software library of 60 books in 20 years. These softwares will continue to sell for a very long time.

Furthermore, the lifetime of the customer's right to use the software will also be unlimited. You can activate your right to use the software you played when you were a kid at a nursing home, download play data from when you were a kid, and play again.

The accumulation of customers is also progressing.

Furthermore, on the software development side, experience accumulation progresses, software development assets are also accumulated, and software development efficiency is also enhanced.

This is the advantage of platform business in the software world.

It is for this reason that GAFAM pushed forward with a platform-based business and was very successful.

Nintendo is also starting to walk that path. That's why the value increases.