When the Nintendo Switch OLED launches later this year, the system will retail for $349, which is $50 more than the current model of the console. A recent report from Bloomberg claimed that, despite this increase in price, the OLED version costs just $10 more for Nintendo to manufacture. Today, Nintendo addressed that reporting with a new Tweet, debunking Bloomberg's figure. According to the company, Nintendo's profit margin compared to the previous Nintendo Switch model will not be increasing. The company apparently felt the need to clarify this fact for its customers, as well as its investors.
The Tweet from Nintendo can be found embedded below.
A news report on July 15, 2021(JST) claimed that the profit margin of the Nintendo Switch (OLED Model) would increase compared to the Nintendo Switch. To ensure correct understanding among our investors and customers, we want to make clear that the claim is incorrect. (1/2)
-- ???????(?????IR) (@NintendoCoLtd) July 19, 2021
Nintendo Switch OLED's price point has been an interesting topic of conversation since the model was revealed. It's rare to see a console remodel sell for more than the original version, but the price point makes a lot more sense given Nintendo's usual pricing strategy. The company tends to sell its systems close to the cost, usually making a small profit per system. Comparatively speaking, companies like PlayStation and Xbox tend to sell their consoles at losses, while making up for it through software sales.
It's rare to see Nintendo address a report such as this one, but the company has stepped in at times to make clarifications for the sake of investors. In 2016, the company's stock saw a huge increase based on the success of Pokemon Go, but that stock dropped off significantly when Nintendo pointed out that it does not make the mobile game. If the Nintendo Switch OLED does perform well for the company when it launches, Bloomberg's reporting on the profit could have similarly led to unrealistic expectations from investors.
Do you plan on purchasing a Nintendo Switch OLED later this year? Are you surprised that Nintendo's profit margin will remain the same? Let us know in the comments or share directly on Twitter at @Marcdachamp to talk all things gaming!
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