Niko Partners: Legal console sales in China to overtake grey market with Switch, next-gen launches

The Nintendo Switch is coming to China, and that may mean a strong uptick in legal console sales in the country.

This prediction comes from Niko Partners, which reports that total console hardware and software sales in the country for 2018 amounted to $767.1 million. The analyst predicts this will rise by 11% in 2019 to $851.1 million.

A further increase is anticipated over the next few years into 2023, when the market is expected to reach $1.5 billion, with one-fourth of that total being hardware sales and the rest software. Niko believes this will occur both due to the coming launch of next-generation Sony and Xbox hardware by that time, as well as the coming release of the Nintendo Switch, which was recently approved for distribution in China through Tencent.

Sony and Microsoft have begun to make inroads in China, Niko says, ever since the 2014 overturn of a ban on consoles in the country.

Currently, the after-effects of that ban are still in play. Grey market console revenue outstripped legal sales in 2018 by $280,000. Though legal consoles continue to rise, Niko does not believe they will overtake legal consoles this year. However, a boom in legal sales following the coming console generation and Switch release is likely to shift the balance.