Saturday, July 31st, 2021

Analysts warned that the success of Switch OLED “may set a precedent for the charging of the entire industry”

The upcoming Nintendo Switch OLED is a revised version of the Nintendo Hybrid System, with an upgraded screen and other minor adjustments. For companies in the industry, this will be a particularly interesting hardware release.

As has been well documented, the retail price of the Switch OLED will be $50 higher than the original model, although it fails to provide any real performance improvements over the machine. A recent report indicates that the production cost of the new OLED model is only about $10 per machine for Nintendo, which means that if the console succeeds, the company’s total revenue per sale will increase by $40.

Historically, when game consoles like Switch have been on the market for 4 to 5 years, we have been accustomed to seeing price cuts or significant hardware improvements to maintain sales growth. Of course, OLED will break this trend, but raise the price; it is speculated that Nintendo believes that the impressive momentum of the Switch will remain high for a period of time, and may even rise rather than fall.

Either way, other industries will pay attention.According to a report in Japan Times (Membership required), Ace Research Institute analyst Hideki Yasuda said that if Nintendo’s move succeeds, it “may set a precedent for the entire industry to charge more fees.” According to a PlayStation official who asked not to be named, the same report also stated that PlayStation is “closely monitoring” the market’s response to Nintendo’s strategy.

It’s hard to say how the Switch OLED is performing at this stage — so far, the reactions from fans and analysts have been mixed. Since the console’s release, Nintendo’s stock price has fallen by “about 5%” — but if sales continue to grow, why will Didn’t Nintendo choose to make more profits? Perhaps more worrying is why other gaming giants will not choose to follow suit in the future?