Beat me to the punch.  Switch OLED is nice, I have one, but it isn't exactly 'new' hardware.  Same product just with a better screen.  

A few staunchly believed we were getting a significant hardware upgrade with Tears of a Kingdom...  I just don't get how anybody could think that anymore.  There is no evidence other than people want a stronger Switch.  

"It's already the third year for XS and PS5, Nintendo still comes in first place every month"

No, that's not true. In the US for example the PS5 outsold the Switch 5/12 months last year. Also don't forget that you need game developers to be onboard. PS5 + Xbox + PC are all the same platform really, they get the same 3rd party games. Switch is by itself.

Nintendo's hardware sales dropped by 13 percent in 2021. 20 percent in 2022. They need hardware soon.

I don't think new consoles are like in the past, you don't need any exclusive games. The arguments here are weird. Mario Kart Wii U is the best selling game on Switch. Zelda BOTW was a Wii U game.

In the same way new hardware can just play the same games but with better performance while we wait for new exclusives. And those new exclusives will come IMMEDIATELY. All the third party games that don't work on the Switch can be released quickly for the Switch 2. There are a lot of PS4 games waiting in the wings.

Switch is dropping because it's past its peak. That doesn't mean it needs to be replaced soon. Sure it dropped 13% and then 20%, and still sold 19.5m last year which was right around PS4's peak year!!! And not much lower than what PS5 and Xbox did combined this year.

If Nintendo keeps bringing the games, does the Nintendo Selects for older games so that a bunch of first party games drop to $30, and does a price cut this summer or next year which could be possibly if supply problem is resolving and parts are getting cheaper again, and maybe even adds a new model like a cheap $200 Switch Home they can definitely keep hardware sales solid while selling mountains of games to their well over 100m userbase Nintendo plans to increase production this year, which I hope would suggest they are planning to do some of these things to spur on sales this year as one would think the only reason to increase production at this point is if they are gonna start making aggressive moves to sell the Switch.

And yes of course consoles need exclusive games, that's what separates them from the other systems. And MK8 was a game on a failed system that hardly anyone owned, while BotW same deal but also launched as the Switch launch game so the Wii U version only sold a little, and they are both Nintendo exclusives, so not exactly good examples of non-exclusive games.

Your last paragraph is confusing because you already said exclusives aren't needed and then you talk about the need for exclusives haha. Sure we should expect next-gen Switch to get XB1 and PS4 multplat ports, as well as likely downgraded ports from XBSeries and PS5. But those can come when the next-gen Nintendo system comes, we don't need them now, there's already a ton to play on Switch without those.

The reality is Nintendo only needs new hardware soon if they choose to need new hardware soon. If they keep the big games coming and give the market price cuts on games and hardware they can easily keep the Switch going into 2025 maybe even to holiday 2025, I certainly wouldn't mind that. However, if they don't make any moves like that and are winding down with the last round of games on Switch then they'll need a next-gen system next year.

We know Zelda ToTK, Pikmin 4, the Wii Kirby remake, and Advance Wars are coming. And I'm still waiting/hoping to see on Switch: 2D Mario, DK, Star Fox, Kid Icarus, 2D Zelda, something in the Excite bike/truck series, Metriod Prime remake, Metroid Prime 4, potentially Prime 2 and 3 in HD, Zelda WW/TP pack, maybe even a Mario Galaxy 2 remaster considering it was very strangely left out of 3D All-Stars. That's a lot of potential first party games that have yet to hit the Switch. There's also possibility of stuff I'd probably not be interested in but others would like another Mario Party, another non-mainline Pokemon game, Mario Baseball, maybe Luigi's Mansion 4. If they have most of this stuff planned for Switch they could easily keep it going until holiday 2025. Or maybe they don't have much more that we don't know about planned for Switch and next-gen will be starting next Spring or something.

I think 2025 would really be tempting fate, I mean maybe they can pull it off but do you really want to take that risk after what happened with the Wii and DS to Wii U and 3DS.

You can lose momentum faster than you would imagine possible. The Wii went from having a "good year" in 2010 to being pretty much drowning as a brand by 2012, these things can get away from a company in a hurry.

Price cuts are also not a big tool for console manufacturers any longer, it's not the 80s/90s anymore. Think the research internally has been done by all of Sony/Nintendo/MS and they've concluded that price cuts only give a temporary boost and long term you lose money by sacrificing the higher price point. It's not good business. People who don't want to pay much for hardware are also not that likely to be stingy when it comes to buy games too.

I don't think there is much of a market for a home only version of a Switch either.

Looking at the final numbers for the year, the Switch still sold about the same as it did in 2019 before the pandemic and Animal Crossing caused such an unexpected and frankly absurd jump in sales in 2020. In fact, it sold a little more than it did in 2019. It's possible that rather than being on the decline, the market for the Switch has simply been correcting itself with the end of the unusual factors which gave the system a somewhat 'artificial' boost. If that's the case then the system has more life left in it than the declines of the last 2 years would suggest. If the drop in sales from 2022 to 2033 is on the lines of 1-2 million units then that would confirm that's all that's happening. If it drops 4-5 million again like it did this past year then the system is indeed in a real decline and Nintendo needs to have a successor system ready sooner rather than later.

I mean obviously price cuts and a new model will increase sales. It's not like those things wouldn't have an effect. Nintendo is planning to increase production this year and it'd be insane to even think there is a reason to do that unless they are gonna get aggressive on pushing the system.

A Switch Home isn't gonna sell an extra like 20m units sure, but it'd probably sell at least an extra 5m or so. And that's EXTRA sales, not total. Think about the people who are collectors and buy every model. Then think about the budget-conscious people who haven't bought a Switch and don't want the handheld only Lite but would buy a TV-only model at the Lite's price. Think about the people who maybe bought a Lite just because it is cheaper but would rather play on the TV and would get a Home to replace their Lite. Or people who have an old original Switch but almost exclusively play on the TV and would pick up a new TV-only model. Or the people who just have held off on the Switch because they don't play handheld and are only sort of interesting in the system and aren't gonna pay $300 for it, but a cheap TV-only system they'll buy to get the few games they want. Or families that have gotten a couple Lite's for their kids but would also pick up a cheap Home for the whole family to play together. That's a good amount of extra sales. It's not gonna keep Switch going for years longer, but it might pump Switch's 2023 and 2024 sales by a couple million each year.

And price cuts will let budget conscious people buy the Switch more as well. As well as convincing some people with the hybrid model to upgrade to the OLED if its cheaper. Price cuts ALWAYS make a difference. It's not that price cuts don't work, it's just that Nintendo/Sony/MS don't bother competing on price much anymore, instead they focus on competing using their brand and their exclusives because their brands are much stronger and and embedded in gamers now than they were in the 80s and 90s when mass market gaming was still a very new thing.

And you're getting the loss of momentum on previous systems wrong. The motion control craze of the first 3 years of the Wii was over before the WiiU even came out, plus the WiiU had its incredibly awkward single large gamepad with asynchronous multiplayer in which the other players used Wii remotes instead. It had nothing to do with losing hardware sales momentum from the Wii.

And 3DS opted for a fad tech that bloated the price of the system while not allowing the system to be that much more powerful than the DS. And smart phones and mobile games were on the scene now making a low powered handheld system of much less interest in general. Again, nothing to do with losing hardware sales momentum.

The lessons to be learned from WiiU and 3DS are to not blow your next-gen system on awkward and unnecessary gimmicks, especially when the market has already started to shift away. The market is not shifting away from Switch's hybrid gaming, so Nintendo just needs to build a much more powerful next-gen Switch that perfects the Switch design concept, and is backwards compatible with the Switch and they need to launch with a fantastic new Mario Kart and 3D Mario and keep the big games coming.

It seems likely based on the increased production news that Nintendo is focused on keeping the Switch going and making tons of money on Switch games for as long as they can. It could be that they are just totally unrealistic and think they can get more sales out of the Switch's last full year and will launch a successor in Spring or Holiday 2024. But it seems to make more sense that they aren't totally off their rocker and think there is a need to ship more Switches because they have big plans to keep the Switch going very strong. Which would imply stuff like hardware price cuts, software price cuts, plenty more big first party games, and maybe even a new model, along with the idea that they probably don't plan to start next-gen until 2025 unless things go very differently than they are planning.

There's a simple way to illustrate why companies don't really like to cut their hardware price any more.

Lets say cutting the Switch price by $50 would increase one year sales from 16 million to a much larger 20 million. And these are just hypothetical numbers, likely a price cut would not cause even this level of boost, but for the sake of this example lets say it does.

You may say "Wow! What a huge sales boost! Nintendo should totally do it!".

When you break this down though, lets also assume the profit margin on the Switch OLED is $90/unit for Nintendo at $350.

16 million systems (at $350 MSRP) x $90 profit per unit = $1,440,000,000 profit for Nintendo

20 million systems (at $299 MSRP) x $40 profit per unit (you're losing $50/unit here) = $800,000,000

The 16 million at $350 earns Nintendo almost *double* the amount of net profit. Basically put it this way ... to sell an extra 4 million units of hardware, you're losing yourself hundreds of millions of dollars effectively. Even if the Switch sold an unreal 30 million units as a price boost, 16 million sold at $350 still earns Nintendo more money than 30 million sold at $299 would. Think about how crazy that is. 

You can understand now why companies don't tend to want to cut their hardware price if they don't absolutely have to. It can happen, but I don't think any of the three console manufacturers use it as a central tool for moving hardware any more. 

I agree with most of your points, and how Switch Home would just be another option that could slightly help sales.

I don't agree entirely with your point on the 3DS. 

Biggest cost in the Nintendo 3DS is in its displays (venturebeat.com)

Even with the display being the biggest cost of the 3DS, the system total to manufacture was still only around $103 at launch. Nintendo chose to charge $249.99 at launch when they could've easily charged $169.99-$199.99 and still made a profit. The sluggish sales of the 3DS (largely because of software that failed to impress) led to a large price cut in Q3 2011 anyway to $169.99. 

The base 3DS is a lot more powerful than the DS or DSi. DS did have a lot of use of polygons and 3D environments, but they were hardly any better than the N64. The 3DS on the other hand is better than a PSP and around a PS2 with a worse resolution and more RAM. If Nintendo opted to make the 3DS as powerful as the New 3DS ended up being, it probably would've put the cost above $103 even without the costly 3D display. 

So either way, the 3DS was going to be as expensive, if not more expensive to make than it was, unless they had no 3D and stayed around the base specs they decided on anyway. That is, unless somehow the components for the specs are really cheap, but I'm not an expert on that. 

But circling back again to the Switch 2, I stand by a 2024 launch. Ramped production in 2023 just all but confirms the successor won't release in 2023. Sony was still manufacturing plenty of PS1s in 1999 with a launch of the PS2 next year. In fact, the PS1's best year was 2000. That's completely unique, as far as I know. Imagine the PS4 reaching its peak in 2020, which it clearly did not. 

It's not just about hardware profit. Any profits made by selling hardware is very small and in many cases in the past most console manufacturers were willing to lose money on hardware. Software sales is what matters the most to these console brands so companies are more than willing to lose more money on hardware with a price cut in order to get their hardware to more consumers who'd be willing to purchase plenty of software for it, which overall would still turn more of a profit than selling less units/software by not cutting the price for more profit on hardware.

Price cuts are becoming less common nowadays however cause there's less competition amongst the big 3. Back in the 6th Generation when Nintendo,Sony & Microsoft directly competed against each other price cuts were super common since any price advantage any one of those companies had could've significantly shifted the tide when it came to marketshare and sales since they were all very similar competing for the same market. Sony's goal was to attempt to force Microsoft and Nintendo out the console business by making sure pretty much the entire market went only to Playstation for games which is why Sony kept dropping the price of the PS2 despite the already high sales it had. Microsoft and Nintendo were just trying to stay relevant and dropped the price of their consoles as soon as PS2 would receive a price cut. Nowadays that's alot less common since all 3 companies are not really as competitive anymore and are satisfied with their own market they created. Sony realized that they weren't gonna force Microsoft & Nintendo out the console business so they have less of an incentive to use price cuts and Sony is pretty much the only 3rd party system now that still cares about hardware sales and they're dominant in that department so they aren't as competitive as they were before. Microsoft doesn't care about hardware sales as much anymore to use price cuts, and Nintendo created their own market with their blue ocean strategy where people go to them for a unique experience that makes them stand out and doesn't directly compete with PS/Xbox anymore so price cuts aren't used as much by Nintendo.

Also, all the companies realized what's a good price point for consumers and profitable price point for them based on their experiences with their prior consoles where Sony & Microsoft realized that its unnecessary to make a system super powerful and expensive to produce and sell their consoles at a major loss when most consumers don't care about specs and aren't willing to spend a ton of money just for high specs. So as a result in the two more recent generations Microsoft/Sony scaled back on offering high end hardware in order to price their consoles at a cheaper cost at launch and make the hardware more profitable, and since the launch prices of those consoles are much cheaper & profitable nowadays their isn't a ton of room for multiple price cuts to occur that would significantly increase sales.

15-20 years ago maybe ... Nintendo and even Sony at least have likely gotten used to making large profit margins on Playstation and Switch consoles. 

It's not that there's less competition, it's that's generally price cuts don't work that well. Nintendo massively slashed the price of the GameCube for example which did cause Sony to have to respond, but ultimately the GCN price cut surge only lasted a short while and really all of the companies got stuck making less on hardware for no real dynamic change in the hardware race. GameCube wasn't really able to compete any better with the PS2, even the XBox they couldn't beat with a $99 price. 

Price cut is most effective when you are earlier in your product cycle and need to accelerate your userbase quickly to get enough users out there for software releases, like the panic price cut Nintendo had to make on the 3DS or if you've started at an extremely price point for weird reasons (like Playstation 3 being $600 basically 15 years ago because of the Blu-Ray disc drive). 

If price cuts could push the XBox above the Playstation, Microsoft would do in a hot second, the problem is it wouldn't work and in the long run would just make them less money overall. 

It's not worth losing hundreds of millions of dollars just to sell 2 million extra hardware units for 1-2 years. It's not a great business proposition. Could Nintendo do it? Maybe, but I suspect they are quite enjoying a $350 pricing tier, the profit margin of selling like even 12 million OLED Switches would destroy what they were making on even 20-22 million regular $299 Switch systems. 

Remember when Sony probably sold an extra 8-10 million PS2s by selling them for $99.99-$129.99 for years on end? What does it tell you when they have no interest in doing that with the PS4? I'm sure they could if they wanted to. Well at least they could have a $199.99 PS4 model probably, maybe $169.99. I'd buy probably one just for the basement TV.