Soundwave said:
Next system is probably gonna start at $399.99 and they probably will sell out at that price anyway. Price slashing hardware to get a small bump is just dated console philosophy at this point it seems, neither Sony or Nintendo subscribe to it anymore. I did the math on this but the amount of extra hardware a company would have to sell to even justify a $50 price drop is massive. |
$400 seems a bit high. I mean it could be, but I'd put better chance at it being $350. I doubt Nintendo is gonna bump its launch price up by $100 from one gen to the next, especially if it is indeed a very similar system like most expect (a Switch 2) which wouldn't require loads of R&D to create.
And not really on the price cut stuff. They just have to sell one more game to make up the difference on a price cut. Someone who wasn't gonna buy the system at $300 but buys it at $250 just has to buy one $60 first party game and Nintendo makes up the difference. That's of course only for bringing in extra buyers, but presumably those extra buyers would buy several first party games, and that alone offsets the loss of $50 from some of the people who would've bought at the original price anyway, and then you offset more of that loss from the new buyers (at $300 vs $250 you offset 5 'were gonna buy the system anyway' buyers with each single extra buyer), so most of the revenue lost is made up right there. Add in whatever fees Nintendo charges from third party publishers for games bought by the extra buyers, and its easy to see how the math works out.
Also if system is $50 less maybe those people get one more game than they would have, not to mention possible new people paying for NSO, or just in general new fans who then maybe are more likely to buy the next system a few years down the road. The Math definitely works out for price cut. And like I said if Switch is still $300/$350 when Switch 2 comes out at $350 (or even if they go with a real high price and launch at $400) that just gets confusing and complicated and silly for consumers. Only way I see that working out in any way that makes sense is if they just stop producing original and OLED models when Switch 2 releases and only sell the cheap Lite, but then again you're just cutting off potential sales of Switch to late buyers. Any way you look at it, price cuts makes a lot of sense for the Switch this late in the game due to several factors.
I think what the industry moved away from was simply competing on price cuts. There's only 3 players and they are all established, so as long as those 3 decide to not do price cuts very often all three can keep prices higher longer. It's not like there are new entrants into the industry trying to undercut each other the way Sega/Sony/Microsoft came into the industry in the 90s and early 2000s. I don't think price cut wars not happening has anything to do with the Math not working out, the Math clearly works out as shown above (I mean the simple fact that most money is made off software/services/peripherals, not HW sales, proves the point alone), but has to do with all the players are established and no one new is coming into the industry so there is no reason to compete on price cuts. But that doesn't mean doing a price cut for other reasons (like to keep sales going late in a life cycle) aren't worth it.
Last edited by Slownenberg - on 09 May 2023
