Nintendo Officially Debunked Bloomberg's Claims About Higher Profit Margins for the Switch OLED; No Plans For Other Models for Now
- Thread starter Abriael_GN
- Start date
- News
S
SpongebobSquaredance
Unconfirmed Member
I want Reggie back. Coolest guy PR guy on the planet.
Haint
Member
That would be a fair point if this was a one off thing limited to the Switch OLED, but their public hardware profit/loss claims haven't passed the smell test since Gamecube.
Last edited:
Tarin02543
Member
But they did?
nonsense. but i heard Bloomberg is hiring. (Or I should say send that to Bloomberg. They'll publish it. )
Last edited:
cireza
Member
And you believe whatever Nintendo say to the public, this is exactly the same.
lol. afaik Nintendo doesn't have a track record of lying to the public when commenting on rumors. Corporations are also subject to SEC oversight in what they can and can't say to investors. And/or to foreign government oversight as well.
I know Bloomberg has a history of reporting misinformation specifically around rumors surrounding upcoming products launches. And Bloomberg can run reports of what analysts say all day long with no consequence...except readers might start to take those types of reports with a grain of salt.
Last edited:
cireza
Member
I don't care about Bloomberg. I was already thinking, considering the price, that they were probably making a huge margin on the system. That's simply my opinion, anyone can and should think whatever they like.
lol. OF course it's your opinion. Never any doubt about that.
Solarstrike
Member
Nintendumb
Zannegan
Member
Eh. Anyone can and should think whatever they like within reason.
Of course how they choose to count development costs can be... amortized (??? sorry if that's the wrong term, reaching way back to Accounting classes here) in different ways. All the things you mention--R&D, marketing, production--are rolled into the cost of each unit in different ways, which is what a lot of people in here have been trying to explain: the cost of the hardware is more than just the BoM + shipping.
The numbers very well could be, and I believe often are, frontloaded. And of course if they continue selling the system over time it could (and they hope it will) reach higher profit margins per unit. Then again, so will the base Switch. The reason companies frontload those numbers isn't to obfuscate costs or make consumers think they're getting a better deal than they are. In fact, given that all of that has to be done before a system ever launches, it's more accurate to report costs on the first few million units. But the main reason a company like Nintendo might frontload the numbers is that success isn't guaranteed. If, for example, you put out hardware that ends up being another Wii U and you've planned to (again, sorry if this is the wrong term) amortize over the next five years and 100 million units, you're in big trouble, and your investors will and should cry foul when you retroactively apply those costs and a bunch of money "disappears."
But anyone who understands the bare basics of business accounting (and I have only a fuzzy grasp at that) already knows these things, which is why we've been rolling our eyes at the drama queens wringing their hands over the "Nintendo charging $50 for a $10 upgrade!" outrage. It isn't our fault that people even more ignorant than I am want to jump in the conversation, and it's not Nintendo's responsibility to correct every consumer's misapprehensions. What they are responsible for is making sure that their investors, who might well read the innaccurate (or at minimum misleading) Bloomberg piece and start buying or trading expecting a better return.
Which they did. *shrug*
Last edited:
Le Big Mac
Member
Nintendo is a listed company so they have a lot of onerous reporting restrictions so they can't willingly lie to investors.
However they can (and often do, not exclusive to Nintendo) willingly omit information if they feel it doesn't serve investors best interests. Can take the form of reporting exemptions or in Ninty's case, not disclose the estimate in calculating profit margins on the product on scaled production. This can be DPT, BEPS schemes in tax avoidance to not disclosing the exact cost of sale for product or the average cost at any given time.
Whilst Bloomberg doesn't have anything backing their story, Nintendo's tweet doesn't mean anything.
However they can (and often do, not exclusive to Nintendo) willingly omit information if they feel it doesn't serve investors best interests. Can take the form of reporting exemptions or in Ninty's case, not disclose the estimate in calculating profit margins on the product on scaled production. This can be DPT, BEPS schemes in tax avoidance to not disclosing the exact cost of sale for product or the average cost at any given time.
Whilst Bloomberg doesn't have anything backing their story, Nintendo's tweet doesn't mean anything.
Umbasaborne
Banned
"Waaaa BuT WeRe pRoViDinG a SeRvIcE!!"
Nintendo would never would have acknowledged they are making more profit with the Swtich oled if true. Who knows it they investors know they are making more profit and that PR lied about it. If I were an investor and Nintendo did that I wouldn't care. The Switch oled cost $50 more that's why the price increase yeah right... for basically an oled,32gb more and redesign plastics.
Last edited:
My guess is that they are paying roughly the same at this current time only becuase the chip component cost is higher nowadays due to the shortage. Therefore the new switch with its smaller node hasn't had that much of a saving compared to whatever volume contracts they may of had before. They certainly aim to be making more profit from it down the line though otherwise what's the point of it?