Nintendo announced its new Switch OLED model last week in a surprise reveal. While many of us were hoping for a more powerful 4K Nintendo Switch, the company instead made the exact same model with a slightly larger display that uses an OLED panel. Soon after the console reveal, Bloomberg dived into the slight hardware changes in the Switch OLED to try and figure out how much the console costs to make.
You see, Nintendo has also increased the price of the new Switch OLED from $300 to $350. A $50 price jump has many gamers wondering why the price has increased for a console that is pretty much the same thing.
This is where Bloomberg came in. According to their report, the new Nintendo Switch OLED Model packs a display made by Samsung Display Co. This new OLED panel costs $3-$5 extra to make and implement according to Yoshio Tamura, co-founder of industry and research firm DSCC. In addition, the firm claims that the added 32GB of flash storage on the Nintendo Switch OLED only costs an extra $3.50.
There are other added tweaks here and there in the new Nintendo Switch OLED Model including the LAN port on the newly design dock and the wide kickstand. However, these changes only cost a few dollars. In total, the changes in the new OLED console could cost Nintendo $10-$12 to implement. However, the price tag of the console is now higher than ever before with a further $50 added on top of the original console.
Morningstar’s head of equity research Kazunori Ito says that the $50 bump in the new hardware doesn’t justify the changes on the console. He says:
The new hardware is barely half-baked and would do no help at all in sustaining the platform’s momentum. The Switch had its peak last year and is only going to slow down from here.”
Another industry observer, Serkan Toto disagrees with this statement saying that the $50 jump is enough to ask for when you look at the improved display on the console.
“I don’t see any reason why this model would flop. Nintendo raised the new model’s price as it doesn’t need to cut prices for current models thanks to strong demand.”
Since the Bloomberg report went up about the cheaper components in the Nintendo Switch OLED Model, the company itself responded to the claims. In a tweet, Nintendo says that the reports of an increased profit margin on the Switch OLED are incorrect. They did not add any other information to the tweet but by the sound of things, they claim that the price increase between the two models is justified. In addition, they also state that the company has no plans to release any other Switch model at this time.
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)
— 任天堂株式会社（企業広報・IR） (@NintendoCoLtd) July 19, 2021
Surely the $50 price jump is a lot to ask for a console that has seen only slight changes. However, Nintendo seems to defend their price hike.