Unlike rivals Microsoft and Sony, Nintendo famously aims to never sell its hardware at a loss in the hopes that software adoption will turn a long-term profit. The upcoming Switch OLED offers a modest selection of upgrades which add an extra $50 to the RRP, but according to a new report, the actual cost to Nintendo for the upgrades is significantly less than this.
Bloomberg claims that the cost of the extra components – the OLED screen, increased storage, enhanced kickstand and LAN port on the dock – add up to “around $10 more per unit” to make.
The largest chunk of this expenditure comes from the upgrade to OLED panels which, according to Yoshio Tamura of DSCC, will cost Nintendo around $3 to $5 more per unit than the current LCD screens. Doubling the internal storage to 64GB will cost a further $3.50 a time, according to Omdia, and the remaining extras should cost a few dollars each.
As you might expect, Nintendo declined to comment on Bloomberg’s estimates.
While a new version of the Nintendo Switch has been anticipated for some time, the expectation was that the company would be releasing something to take advantage of the best 4K TVs with a chipset that could output UHD visuals when docked. That, as yet, hasn’t materialised and the refresh offered by Nintendo is considerably more iterative.
In truth, it’s likely that the Switch OLED will still fly off the shelves, given the enduring popularity of the original four-year-old Switch. Though for current owners – especially those who predominantly use the console docked – there’s little to justify the costs of an upgrade.
The more interesting thing here, as Bloomberg notes, is that Nintendo is going against the games console playbook by increasing the price of the product without offering more raw power. Ominously, the report says Sony is taking note with an “official inside the PlayStation division” claiming that Sony is “closely monitoring the market response.”
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Current market conditions – where PS5 stock is still incredibly hard to come by – undoubtedly means Sony could have charged more for its latest console. What will be interesting to see is how the company prices any hardware revisions it makes over the next few years.
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