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Kyuu on 25 August 2023
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RolStoppable said:
Kyuu said:

(...)

I'd go for two models: one (stripped down) at $350, and another (feature complete) at $450. But I think Nintendo will launch one version at $400, and I won't be against it because it's the safest and most balanced price/specs/features point. I think they can go higher, but it's a bit risky.

One common problem with two SKUs at launch has been the correct production volume. All too often the inferior SKU was sitting on shelves and not long after in warehouses too. The only two-SKU-strategy that has ever worked is the one where the feature-incomplete one is produced in very low numbers from the start, so just there for the manufacturer to say "new console starting at $X99" and never meant to be one that sells a lot.

One SKU at launch is a lot easier to manage and I don't think there are any features that are really worth it to seriously consider two SKUs. LCD vs. OLED is just a nicer screen, insignificant for a lot of gamers because they'll use the console first and foremost with the TV anyway, or they simply don't care enough. Storage capacity is similar, because separate SD cards will probably be needed either way.

Specs can be expected to be limited by the consideration for battery life and size of the console, that's why I expect $399 as launch price after this past year and a half of rampant inflation. Specs will lag notably behind the PS5 and XSX anyway, so there's no point in pushing the limits. The perceived difference between $399 and $449 is also a lot bigger than between $349 and $399 despite being the same difference. But $349 is out of the question for me due to the high inflation we've had recently.

$449 could work when we consider how much Switch still costs. In price it's not much of a leap from current gen to next gen. But at $449 Nintendo should have a first year first party lineup that at least matches Switch's in the number of system sellers and complementary software, because despite Switch's success they shouldn't anticipate that third parties are on board instantly. That's why $399 is the more sensible approach as it still allows for a more premium SKU to be introduced later on.

Nintendo does have a few more revenue streams today than they had when Switch launched, but dedicated gaming hardware still accounts for the vast majority of their business, so they should better play it safe than sorry.

All of this is true. But I expect the Switch 2 to have a very compelling first year (3D Mario and Mario Kart 9 are in the cards), so a strong early software lineup is probably not an issue.

And while launching two SKU's does come with problems, it enables Nintendo to get slightly more ambitious with the core specs, knowing that they have a cheaper model as a safety net. This is what I suspect Sony did with PS5, they made the Digital Edition and then realized they didn't really need to push it because the demand for the standard model was high enough. Nintendo can also get more aggressive with the price difference between the two models, because they can cut further costs by providing a lower grade display and no dock.

Overall, one reasonably powerful launch model at $400 makes more sense than the two SKU route. Especially if they intend to keep producing Switch 1's.