It's a bad thing the Switch isn't being sold at a loss?

[TheWPCTraveler]

Intrinsic said:

TheWPCTraveler said:

I missed the point of the thread entirely, so I apologize. I thought of it the same way I thought NCL goes about, which is the opposite of what this thread is about.

That said, if Nintendo is serious with the whole "we have enough room to maneuver a price drop" business, then all things considered, the Switch tablet alone should cost below $140 to manufacture.
Assumptions: Dock+Joy-Cons = $40 (+$10, due to how retailers and distributors work), price cut is off JP price ($260 pre-tax) and is ~$40. Retailer cut is assumed to be at 20%.

Thats ok.

On actual console hardware, the retailer cut is nowhere near 20%. In the case of the Switch that would mean $60!!!!!! Think of it, the PS4 had a BOM of $384. But at retail was sold for $400. Sony were probably making a "profit" of around $6 on every console sold and the retailer was taking $10. If anything at all. The retailer gets their money from you buying games and accessories though. For every $60 game theretailer gets around $12-$15, on every controller ($15-$18 hardware sold for $60) the retailer gets around $20. In the gaming business.... thats where the real money is. 

On th cost of the tablet alone,I think you are spot on, +/- $10 or so. For the dock+joy-cons+ grip, I would put all that all at around $50. 

Now even if we add another like say $20 for unknow costs.. that brings the unit to around $210. Give the retailers $10 if you are feeling genourous, so thats $220. Tack on another $30 and call that nintendo's hardware profit (which mind you will be more per consol profit than any of the big three has ever charged...well exceptnintendo) and that brings it up to around $250.

This means at $299, nintendo is basically charging a $50 premium to buy their console.

No onehas to take my word for it, the console will come out in a few weeks, it will be torn apart and laid bare for all to see. I think a lot of people will be shocked how inexpensive it all will be on the inside.

We'll all see in four weeks. I italicized what I learned today. I always thought that the cut was bigger in order to allow for a larger room for error (i.e. price drops without pissing off retailers).

The $140 estimate is all taking into account the 20% margin earlier, and if that is taken off the table, that immediately shoots up to $180. If the price of manufacturing is anywhere close to that, given the rumored specs, I'll be shocked at just how incompetent Nintendo really is at sourcing components (not learning from the Wii U says a lot).