Switch Price Cut?

[zorg1000]

AlfredoTurkey said:

zorg1000 said:

No, inflation is definitely something that needs to be taken into account. There is a reason why consoles dont release at $200 anymore and thats because you cant get the same out of $200 in the 2010s as you could in the 80s/90s.

Yes, consoles typically have their peak sales a few years after release when the price comes down and the software library is established and word of mouth is high, this even applies to those devices that launched at the "sweet spot".

 

Is there a reason you ignored the 2nd part of my post? How would Switch have sold far more than it did by being $100 cheaper when they essentially sold as many as they could make in the first year? At best it would have sold just a little bit more which wouldnt have been worth it and would have severly cut into their profits.

If it had released with that price point, they'd have increased production in the anticipation of it's success which would have negated the supply issues. And the extra software would have been a boon for profits as well. More consoles=more software=more profit. 

It would be interesting to see what the profit margin is on a Switch. It they're making them for less than $199.99, then they'd still make money at retail, albeit far less. But still, software is where they make all their money, not hardware. 

I'm guessing it's at $299.99 because... well... it can be. 

Its not that simple, Nintendo cant just push an "increase production" button and make an extra 10 million consoles.

Nintendo doesnt personally make the components that go in their consoles and last year there was a worldwide shortage of the flash memory Switch uses so the only way they could get a significantly higher amount of units out would be to pay a significantly higher amount for these components in order to be a higher priority for their suppliers. Since Apple uses the same components for the iPhone which sells like 100+ million on a yearly basis, its highly unlikely they would ever be a higher priority.

 

Best case scenario, Nintendo ships like 16-17m units of hardware and 60m of software instead of the 15m & 52m in reality which would not be nearly enough to offset the $100 less they are making from each unit sold so it would absolutely eat into their profits.