How Will be Switch 2 Performance Wise?

[Biggerboat1]

Soundwave said:

Biggerboat1 said:

I'm assuming that because you didn't provide a post that said what you said it did that it doesn't actually exist and that it was indeed a strawman.

'Virtually no one in any industry sells any important component at cost, let alone at a loss.'

Dude, what are you talking about? Products are frequently sold as loss-leaders. Google does it with it's Pixel phones, Amazon does it with many of its tablets & smart speakers, and tonnes of consoles launch as loss leaders, including all in this very generation, including the Steam Deck. Or how about any service that offers a discounted or free trial, of which there are about a bazillion?

And this is just off the top of my head, within the tech sector - across all sectors we'd likely be looking at many thousands of products or services.

This strategy is normally used for a few reasons, 1) a company wants to break into a market where it has limited presence and so takes a hit for a generation or two in the hopes of gaining a foothold. 2) they sell a whole bunch of profitable tertiary services off the back of said product which will more than offset that initial loss. 3) they hope that by giving you a free or discounted period of time with a service that you'll ultimately pay the subscription longer term.

The reason that you're less likely to see a ROG Ally X going at cost or at a loss is that Asus does't stand to make money from services following the purchase, whereas Sony, Nintendo, Valve & Microsoft do. And the handheld PC market is currently so nascent that it likely wouldn't make sense for them to lose a bunch of money to gain a foothold in a tiny sector.

Furthermore, according to some analysts, the Switch 2 costs approx $400 to manufacture. If my research & maths are correct then it's selling in Japan, net tax, at $306.

So the very strategy that you're asserting is extinct is being used today by Nintendo itself...

And this strategy has nothing to do with gamers being 'spoiled'. Corporations are not altruistic, if they're implementing a loss leader strategy its because they think they'll make more money down the line than they otherwise would if they sold at a profit from the jump.

I stand by what I said. Just because Google (a company that clears 10 billion+ in profit a year due to search + Youtube) subsidizes one product line (Pixel phones) and so does Amazon (another multi-billion dollar money machine from e-Commerce) doesn't mean even 1% of products are sold under that business model. 

Even for electronics, 99+% of hardware is sold at a profit. 

And that's fine and more than fair. 

Even the so-called "razor blade" model ... like people realize Gilette and other razor blade companies still make a profit on actual razor handle sales too, they don't just rely on profit from the blade refills. 

Nintendo isn't a trillion dollar market cap company with 20 other divisions. Sony isn't even close to that kind of market cap either, but Nintendo especially has basically this one business and these days it's pretty one hardware line. If they want to make a decent size margin on the Switch 2 hardware, that's entirely reasonable. Sony will likely be making a profit on future hardware too (hello $600-$700 PS6 base model). 

You're moving the goalposts, you said 'Virtually no one in any industry sells any important component at cost, let alone at a loss.'

This is patently false. Do you know that bread and milk are regularly sold at cost or at a loss, the idea being that shoppers will be drawn in by the low prices of staple items then buy other profitable items whilst they're there. That's also why those items are generally at the back of the supermarket, so that you pass a bunch of other products. Or are bread and milk too niche examples?

Your point is also utterly bizarre as the very specific product category we're examining, game consoles, every one of the major players (Sony, MS, Nintendo & Valve if we want to include them) have all employed a loss-leader strategy in this very generation...

So just to be clear you're standing by your argument that the era of loss leader consoles is over, based on what exactly?

'Sony will likely be making a profit on future hardware too' - what are you basing this on???