Series S is an aggressively priced system that was said to have a lower profit margin (none at launch) that they would make up through it being purely digital & gamepass. I don't think you can compare the costs of the chips as one is vastly more modern then the other and optimised to operate at a fraction of the power consumption. Weaker doesn't mean cheaper.

Ah, got you. I don't see why they couldn't offer a S2 Home at that price point though (see my previous post about it surely being able to come in at significantly less than a Series S).

I think the hardware & game incentives are quite different. It makes all the sense in the world to keep hardware costs as low as possible as it then opens the flood-gates to their real money-maker, software.

We've seen them do this repeatedly in the past. Switch Lite, 2DS, lots of cheap handhelds.

We also see this all time in other product categories. Razor handles are sold cheap to then cash in on the head replacements. Same with printers & ink cartridges.

Do you think Sony ultimately offering PS2 for $99 was a good or a bad move?

$450 is hardly unaffordable by 2025 standards; the original Switch is nearly $400 in today's money, and the Switch OLED costing $350 in 2021 is like $420 today accounting for inflation. There will also be the inevitable cheaper Switch 2 Lite in a couple of years, plus potentially a cheaper all-digital Switch 2 as well if Nintendo see the need.

A lot of forum goers thought Switch 1 was overpriced when it launched at the same price as PS4, yet it went on to outsell Sony's machine easily.

Is it vastly more modern? Isn't S2 based on a cut-down 3050 mobile which came out in 2021 & reportedly is build on a long-in-the tooth Samsung 8nm process (which is actually 10nm)? Series S GPU is built on 7nm I believe...

And again, Nintendo will be able to drive costs down due to higher volume relative to Series S.

At 70-80 bucks a game & their own online service offering I'm pretty sure that Nintendo will make more profit in software per console than MS does with Series S via digital/GP.

It's relative to the companies long term goals & values. 2 different things can bring about the same amount of short term profit. Selling 10m at $20 profit margin or selling 20m at a $10 profit margin. 

In this case I've spoke about value perception a lot as it's something Nintendo are driving for. It's why they're stupidly charging money for the Switch 2 tech demo game lol

Edited

The main to take from that point is not to assume Series S has large profit margins, thats what Nintendo has managed for the last 8 years and I don't think they want to throw it away to unless they feel they need to (3DS' fiasco)

I'm not saying $450 is too expensive. I'm simply saying that by lowering the price on a product you're all but guaranteed to increase sales. (users on this forum acknowledge this all the time by pointing to Switch's sales being particularly impressive due to there being no price cuts since launch)

The Switch Lite proves my point. It's 2/3s of the OG Switch with reduced functionality and it's sold well over 20m, even though the OG wasn't 'unaffordable'.

An even better example is the Switch Lite. Nintendo managed to come in at a price point of 2/3s of the OG Switch, whilst RETAINING a screen & battery.

How low could they have offered a Home version for? Especially if they offered it controller free.

Then we go back to my prior point about Switch lite tackling a particular demographic & multi home ownership more effectively then a Switch TV. But as said, there's a market for it, I just don't think it is exciting enough for Nintendo to go that route and conflates their actual brand positioning they want for the Switch. 

Have you ever looked at the Steam GPU chart which shows what percentage of gamers are using which GPU's?

Cheaper GPUs absolutely dominate.

It shows that consumers are more motivated by price than performance/features.

A S2 Home could actually be in an odd position in that it'd lose the handheld functionality but potentially offer the highest performance.

At half the price of the main unit I'd wager it would be a major disruptor in the console space.

Considering executives kill each other trying to squeeze out an extra 0.5% growth each year it'd be worth it & then some to Nintendo (imo).

We've seen that the Switch 2 can stream to Switch 1, so you could even have a Switch Home offering that same functionality.

Buy the Switch 2 Home for half the price & your Switch 1 is also now a Switch 2 (on wifi) - boom!

So you don't even have to give up the handheld functionality. How is that not compelling?

The real money comes from software. Getting the max volume of hardware into people homes & hands is the name of the game. 

EDIT - typos