The Road to 160m+ for Nintendo Switch

[The_Liquid_Laser]

CosmicSex said:

Guys, remember, Nintendo wants to make money. They are not obsessed with selling more than the PS2. Although even I think its really crazy that they went the whole gen without a real pricecut. What I think is that we will finally get the price cut when the Switch replacement ships.

I keep seeing people say stuff like this.  These statements are both true and completely irrelevant.  This is actually the perfect time for Switch to have a price cut. 

The main way price cuts lead to less money is when you cut the price of hardware too early.  If Switch were to sell another 100M systems even without a price cut, but 120M systems with a $50 price cut, then they would lose $5 Billion on systems that they were going to sell anyway.  The extra hardware and software profit from that extra 20M systems would probably not offset the money lost on 100 million systems with a price cut.

However we are at a point where they might sell about 20M more without a price cut and 40M more with a price cut.  If they are making at least $50 profit on each system, then they would already make their money back on hardware alone.  On top of that they are going to get software sales, subscription revenue and have an extra 20 million customers who will consider buying a Switch 2.

If, going forward, Nintendo doesn't offer either a price cut, a revision, or some attractive bundle then they are leaving money on the table.

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