Lets say you make a chip, and assume you can sell it for x amount of $.

You make a couple of million of them (x$ times millions), hopeing to score some Tablet contract...... it falls through.

Now you have millions of these chips laying around in a warehouse.

No one wanted to buy them, so nvidia started makeing Shield TV, shield handheld, ect trying to not lose so much on the chips.

But its not selling well.... so you still have millions left.

Nintendo offers to buy them from nvidia, but knows nvidia cant really sell from a position of strength.

Its sell it to nintendo for dirt cheap, or risk never getting anything for them.

Nvidia choose to sell them dirt cheap.

Semiaccurate wrote a article about it, where they heard it from a inside guy, Nintendo got a really good deal on them.

"Nintendo get their first batch on the cheap and then Nvidia ramp up the price when they can deliver a 16nm chip."

Yeah I wouldnt be surprised if its something like that.

Nvidia takes a huge loss on the first batches of chips,  and hopes the switch goes on to sell like the "Wii" did, and think "we ll make profits down the line".

Actually rumors says Nvidia got screwed over by nintendo :p

But they had all those chips laying around, they couldnt sell, and they already spent R&D on it... and selling them cheap to nintendo is still better than nothing.

Semiaccurate reported that Nintendo had a deal for console chips from nvidia, over a year ago, and that it was heavily in nintendos favor.

People are kinda worried about 3rd party adoption rates, and always hope for the best when it comes to consoles and secret sauce (extra power).

It being a stock X1 thats clocked lower than the Shield TV, is abit less than what most probably hoped for.

On the upside, Tegra X1 is on 20nm.... once nvidia starts makeing new chip for Nintendo at 16nm Finfets, those "new switch" versions will have much better battery life.  Early adopters probably got screwed over, a year from now, it ll most likely be 100$ cheaper too.

Case clocks?

So all Nintendo needs to do is use the TX2 for Switch Mini and Switch Pro. Zero effort, much more power, double battery time. Since the current System costs not more than 150$ to produce, they can even keep the price.

In the next three years right? or you expect a switch pro to come out next year?

Just out of curiosity... what console did you own before you got the Switch?

Nintendo didnt use any R&D on the chip....
and they got them dirt cheap from nvidia (that had a huge stockpile laying around they couldnt sell).

It bugs me Nintendo decided to go for 299$ price point.
However if their still selling them faster than they can make them, its all good for them.

Guys dont be suckers though, if you wait like 6months time Im pretty sure you ll see them do a 50-100$ price cut.

I would't assume that.  Nintendo doesn't seem to be the best at negotiating prices for parts.  I mean, the Wii U was be built at a lose when it was selling for $299-$349, and that used very outdated tech.  And Nvidia has been notorious for being tough to work with.  It's part of the reason why MS left them and the OG Xbox, as they didn't want to lower the prices on the Xbox chips. 

I'm still definitely guessing Nintendo could be selling this at $249 and either break even or take a slight loss, but I don't think they are making tons of money off the HW.  Hopefully, though, if sales do slide, they will take a