It’s no secret that the new Nintendo Switch OLED is getting a big price hike compared to the original Nintendo Switch.
Going on sale for $50 more than the original Nintendo Switch, this new version sets a precedent for console makers.
“In an industry where consoles typically get mid-life price cuts, the Switch is moving into a higher tier — largely on the strength of a larger and better OLED display and some added storage,” they explain.
“The upgrades are estimated to cost around $10 more per unit, meaning Nintendo is improving profit margins and relying on its rich library of games to keep sales brisk.”
Of course, it’s not unusual for new console versions to outprice their predecessors. Just look at the PS4 Pro and Xbox One X.
But perhaps significantly, the Nintendo Switch OLED doesn’t offer a significant performance upgrade. Sure, it has an OLED screen and expanded storage, but that’s about it.
With these improvements said to cost around $10 per unit, it seems to be more about increasing Nintendo’s profit margins than anything else.
“The new Switch’s 7-inch OLED display from Samsung Display Co. costs an additional $3 to $5 per unit, according to Yoshio Tamura, co-founder of industry research firm DSCC. Increasing the internal storage to 64GB is a further $3.50, according to Omdia’s Akira Minamikawa. The other added components, such as the new console stand and LAN port, are thought to add a few dollars more.”
Traditionally, console manufacturers start selling their consoles at a loss to encourage adoption, with profit margins improved later on via streamlined production and the addition of software sales, but Nintendo has been selling the Switch at a profit since its launch.
Should Nintendo’s new model prove successful, it could mean that we see the likes of Microsoft and Sony adopt this approach too – and it could change everything we know about how the console market works.