Research from a Japanese firm may suggest that the estimated production costs for the Nintendo Switch may not provide good profit for Nintendo. This is courtesy of Japanese firm Fomalhaut Techno Solutions, which has made an estimate on just how much Switch parts cost. It appears the tech needed to make a model would cost Nintendo approximately US$257. This leaves quite a little margin, as the device’s retail price is US$299.
It appears the biggest part of the Switch, which includes its touch screen, dock, and processor, may already take up US$167 of costs. The rest of the price would come from the tech for the Joy-Cons. While each pair has a retail price of US$50, they may actually need US$45 to make. Interested enthusiasts may view the official article here, however it needs a login. You may also read a summary from Polygon. Of course, it should be remembered that these are just “estimates” and Nintendo has yet to make an announcement about this.
Nintendo Switch: Production, Hardware
The Nintendo Switch made a lot of heads turn during its announcement late last year. Players were hooked to yet another new Nintendo innovation. This time, gamers are treated with a device that can alternate as a console and a handheld. The Switch dock can help players get access to games either with the device’s small screen or with a television screen. Its small lineup of launch games will apparently be compensated by a steady stream of new games for the next few months.
Unfortunately, players have reported various issues on both the hardware and the software side of the device when it was released. Players cannot choose (so far) where to store their games, which can compromise the device’s small 32GB capacity. Some players are also experiencing issues connecting their Joy-Con controllers with the device. Recent news also have players complain of overheating issues, bending, scratching and cracking of the device. However, Nintendo has yet to make an announcement on this estimated production cost and its device’s supposed hardware issues.
However, this is not the first time tech enthusiasts have tried dissecting gaming hardware. For instance, research firm IHS tried to analyze just how much money Sony and Microsoft need to produce a PlayStation 4 and Xbox One model, respectively. AllThingsD reported on the analysis, and the results were similar to the Nintendo study. These statistics come from 2013 prices of both consoles.
Regardless, it appears a PlayStation 4 model would need US$381 worth of components. This is US$18 away from its retail price of $399 back then. Meanwhile, an Xbox One model cost US$471 to build. This is much more than its $347 price. Parts of PS4 and Xbox One controllers themselves in 2013 cost cheaper than the Joy-Cons. It only cost an estimated US$18 to build a DualShock 4, and US$15 to build a Xbox One controller back in 2013.
Meanwhile, the little margin for profit may have been worth the take. As of December 2016, Sony has sold more than 50-million PS4 units since its 2013 launch. Its rival the Xbox One sold as much as 24-million units as of last October 2016, again since its launch. This means the production cost estimates for a Nintendo Switch may not necessarily determine the profitability of the device. Regardless, Nintendo may want to up the ante when it comes to upgrading its device as per recent hardware complaints from users.