The big (and few) improvements to the Nintendo Switch OLED model include a 7″ OLED screen, a wide adjustable stand, better audio, and a LAN port in the dock. As such, the Switch OLED will cost $349.99, compared to the $299.99 for the standard Switch and $199.99 for the portable-only Switch Lite. However, according to Bloomberg sources that have put forth dollar estimates, each Switch OLED only costs “around $10 more” to manufacture than the base model, meaning each unit sold would produce an extra $40 in profit for Nintendo.
“The new Switch’s 7-inch OLED display from Samsung Display Co. costs an additional $3 to $5 per unit, according to Yoshio Tamura, co-founder of industry research firm DSCC,” explained Bloomberg reporter Takashi Mochizuki. “Increasing the internal storage to 64GB is a further $3.50, according to Omdia’s Akira Minamikawa. The other added components, such as the new console stand and LAN port, are thought to add a few dollars more.”
By introducing a more expensive mid-generation upgrade while actively keeping the costs of existing models the same, Nintendo is said to be exploring a new pricing strategy that could have ramifications throughout the industry if successful. Typically, manufacturers will lower the cost of their consoles over time to incentivize continued sales, especially if a refreshed model or improved model enters the market. If Nintendo proves momentum can be maintained without slashing prices, it could become a trend, and Bloomberg reports that rival PlayStation is actively monitoring the situation.
In any case, if the estimates are accurate that Nintendo Switch OLED costs only about $10 more to make, that doesn’t mean it isn’t worth $349.99. The value of a product is up to the consumer, not to the profit margins attached.