The Nintendo Switch OLED costs about $ 10 more to produce
Nintendo Switch OLED doesn't seem to represent a huge additional cost to Nintendo, in terms of production, at least according to a recent Bloomberg report that talks about 10 dollars more per unit as assembly costs.Takashi Mochizuki, reporter for newspaper that often deals with videogame issues from Japan, claims that the set of new components of the Nintendo Switch OLED would cost Nintendo only 10 dollars more for each unit, compared to a price increase of 50 dollars compared to that of the standard model.
Nintendo Switch OLED differs above all for the new wider OLED display It would therefore be a significant increase in profit margins by Nintendo and also a move rather in contrast with what usually happens, considering that mid-life consoles usually suffer from price cuts, rather than increases, unless it's a major overhaul sion of the hardware as we have seen for the mid-gen of Sony and Microsoft, which were however sold in line with the initial launch price of the previous models, at least in the case of Xbox One X.
L Nintendo's idea is to exploit in this way the recent rampant success for OLED screens and is therefore a sort of test, with the results all to be evaluated. In fact, according to Bloomberg sources, Samsung's new OLED display costs an additional $ 3 to $ 5 over the standard production cost for the Nintendo Switch, with another $ 3.5 more that comes from increasing satiety. 64 GB internal storage. The addition of a LAN port and the redesigned Dock can add a few more dollars, which brings the total to about $ 10 more per unit produced.
In the special dedicated to Nintendo Switch OLED you will find information, output, price and differences with the basic Switch and Lite, while the mystery of the persistence of the Joy-Con drift problem remains, considering that Nintendo reported that "the functionality and the configuration of the Joy-Con do not change ".
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The Nintendo Switch OLED Estimated To Cost Only $10 More Per Unit To Make
Nintendo Switch OLED
NintendoIf you want to know why Nintendo is releasing the Switch OLED with only minimal upgrades to the screen and hard drive, look no further than the economics of what it costs Nintendo to make.
According to Bloomberg, the $350 unit, $50 more than the current Switch, only has $10 worth of upgrades, it’s estimated.
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The report says that the new 7 inch Samsung OLED screen costs anywhere from just $3-5 per unit. And that additional hard drive space, doubling from 32 to 64 GB costs $3.50. Other upgrades like the LAN port fill in the rest.
So in short, Nintendo has designed this where they should be making an extra $40 in profit over a normal Switch by adding $10 to the manufacturing cost and $50 to the price itself. It’s easy to see how the “missing” component of the new Switch hardware, a chip that could allow better game performance and docked 4K capabilities, would have eaten into that margin. That may not be why it’s missing, but it’s still interesting to know just how much padding Nintendo is doing on the price here.
It’s a big deal because it’s often the case in the video game space that consoles may not be profitable at all. It depends on the unit, but at times Nintendo, Sony and Microsoft have all sold systems at a loss in order to create an install base, and then make up the difference with loads of game sales or through subscription services where they really make their revenue.
Nintendo Switch OLED
NintendoThe Switch, however, has allegedly always been a moneymaker for Nintendo. Previous estimates of teardowns of Switch components put the total cost at around $257, so at a $300 sales price, Nintendo is making around $40 on every unit sold. And if these estimates for the Switch OLED are right, they’ve just doubled that to $80 on every Switch OLED unit. Not bad.
Meanwhile, Microsoft and Sony have both confirmed that they are losing money on sales of new-gen PlayStations and Xboxes. Both consoles are sold at a loss, with revenue being made up in the other areas mentioned above. These losses can go down in time or even turn into profits, once components get cheaper and manufacturing gets easier, but that can often take years, if it ever does happen.
But Nintendo? Nintendo simply has the magic. Due to the innate appeal of the Switch and its roster of games, it can now be making $80 in profit on every unit sold despite using tech that is now effectively two generations behind the PS5 and Xbox Series X. But the Switch continues to sell extremely well, and the OLED model will likely be extremely hard to find, if not impossible, come the holidays.
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