Subscribe To How Much Money Nintendo May Be Making Off Each Switch Console Updates
The Nintendo Switch is a pretty sophisticated little piece of machinery and, assuming you can find one on the shelf or online, it'll set you back about $300. But that's got folks wondering, how much does it cost Nintendo to make and, by extension, how much money are they making off of each console sold?
The short answer is "not all that much, actually." The folks over at Fomaulhaut Techno Solutions (via Polygon) have decided to rip the Switch apart and put a price tag on all of its components. In the end, each Switch costs about $257 to produce, meaning that Nintendo makes a profit of about $40 off of each console sold.
That shouldn't come as a big shocker since modern game consoles typically take the razor approach to making money. In other words, they sell the hardware for close to what it cost them to produce it (the razor handle) while making the actual money off of the sale of games (the blades). The fact that Nintendo is making 40 bucks off of each Switch means they're pocketing at least some profit off of those big launch figures, whereas it's not unheard of for consoles to be sold at a loss just to get them into homes.
For the study, Fomaulhaut tore apart everything that comes in the box for a Nintendo Switch, including the console, its charging doc and the Joy-Con controllers. Once they had everything broken down into its various components, they priced out all of the tech and added it up to come up with the $257 sum. The main hardware costs about what you would expect, but those Joy-Cons are actually rather pricey little pieces of tech. Of course, you already knew that if you've gone out to by an extra set at retail.
Of course, now that Nintendo has the razor handle in our hands, the trick is to keep producing blades that consumers want to buy. The console launched with The Legend of Zelda: Breath of the Wild, which was a smart move on Nintendo's part; having a must-have game available right at launch. They've got a remake of Mario Kart 8 coming out soon and, later this year, both Splatoon 2 and Super Mario Odyssey. Those are some solid options, but a bit light for the entire first year following launch. The real question of the Switch's continued success will be answered by whether or not third party developers start making more "blades" for the razor. We're already seeing heavier support from indie titles on the eShop, so hopefully that's a positive sign of things to come.
So, what are your thoughts on the Switch breakdown? Were you surprised to hear how much it costs to make, or were you expecting it to be higher/lower? Let us know in the comments below.