With its shiny OLED screen and extended storage, the Nintendo Switch OLED model might not be the hypothetical “Switch Pro” that we were looking for, but it still feels distinctly premium. The Switch OLED price is competitive and its added perks are appropriately appetizing. The original model, over four years old and counting, continues to deliver brisk sales at a steady pace month after month. But Nintendo is poised to make a mint on this new machine when it launches on October 8th, and not just because it looks cool.
According to My Calculations…
Bloomberg’s Takashi Mochizuki has a breakdown of the bits and bobbles contributing to the overhead in producing each of these OLED units. The pretty new screen, courtesy of Samsung Display Co., adds an additional $3 to $5 to the production costs. The boost in internal storage from 32GB to 64GB, on the other hand, adds around $3.50. The new stand and inclusion of a LAN port only drain the House of Mario’s exhaustive wallet by a few more bucks thereafter.
In other words, the Nintendo Switch OLED model only costs Nintendo about $10 more to manufacture. This is a “mass production profit margin” home run. Retailing for $50 more than the regular Switch, this is an additional $40 in pure profits per sale.
…the Nintendo Switch OLED Model Is Already a Winner
Even just making a tidy profit on the regular model is an achievement all its own. Console manufacturers are accustomed to selling at a loss and aiming to drive profits by selling a ton of software to new hardware owners in the years to come. It’s typically fairly noteworthy when this isn’t the case; it was worth noting seven years ago when Sony’s PS4 earned its keep straight out the gate, and it’s been noteworthy for all four years of the Switch’s life that Nintendo isn’t only smashing records left and right. With a good price and even better returns, the Switch OLED won’t simply add some extra dough to Nintendo’s coffers. To the contrary, the Switch OLED model is Nintendo smashing without pause.
They’re also spending less to produce their hardware than they’ll earn from your purchase even before you nab all those bestselling “evergreen” games like Mario Kart 8 Deluxe and The Legend of Zelda: Breath of the Wild.
With the Nintendo Switch OLED model poised to make even more profit per sale this autumn than its older cousins, Nintendo’s financial forecast remains strong. Sooner or later, even the Switch family of consoles will see sales slow down considerably. There’s ultimately a market maximum for every product, even when that cap is substantially higher than anticipated. Shareholders seldom wish to hear that, asking instead how the companies they’ve placed their trust in will get around such issues.
Clearly, Nintendo has a plan.