How is Nintendo making more revenue with one console?

[The_Liquid_Laser]

Nintendo's peak era for both profits and revenue were the Wii/DS years.  Switch is not quite to this level but it's getting close.  But when you think about it in Wii/DS terms, then I think it's easy to understand.

Hardware: Wii launched at $250, while Switch launched at $300.  DS launched at only $150.  In terms of hardware revenue, Switch is fairly comparable to the Wii.  Wii is ahead in # of units, but Switch base model launched at a higher price.  Wii also got a price cut and Switch got the Lite model, but overall revenue should be close if you compare them for a similar amount of time.  Adding in the DS is what would put hardware revenue ahead for generation 7, but DS units cost a lot less than either Wii or Switch.

Software: This is where the Switch really shines.  Typically games cost $60 each.  On the Wii it was $50 and on the DS it was $30.  Switch also has a higher tie ratio than either the Wii or DS alone.  Software is also where the big profits are made.  So for software both revenue and profits for the Switch would be higher than if you compared it to either Wii or DS alone.  But it's not as high as both systems put together.

Subscriptions: Switch gets more revenue simply by selling subscriptions.  Wii and DS didn't have anything like this.

One last thing to factor in is that the Wii hardware sales peaked during it's third fiscal year.  Switch is currently in it's fifth fiscal year which is when it will likely peak.  That means that the most profitable years for the Switch are yet to be reported.  Switch is currently selling at an incredible rate and third party support keeps growing as well.  It may end up being about as profitable as the generation 7 years or even more profitable.