The manufacturing cost of the Switch 2 is US $338 (Data from Vietnam)

And?

For decades the big business of video game companies is not the platform, this is because once you buy it you are going to get inside they "ecosystem" (fancy business word) and it is there where the real money comes in: games, subscription, accessories, etc. You dont buy the console to put it next to your TV and call it day, you wants games, and with the e-shop it is even more money for nintendo.

At least, this doesnt change anything that in my region they are charging $600 for the console. And the games prices? just a joke
 
Sounds like the real margins are pretty tight.
Matches what Furukawa said during the last investor q&a when he explained why the net profits in the forecast do not follow proportionally the sales increase. He also explicitly said the margins are lower than Switch 1.
 
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Panajev2001a said:
Again, not the point though. How can the BOM for Switch 2 be so close to iPhone 16 line?
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Iphones doesn't include controllers, charger a dock station, hdmi cable… And probably Apple orders way more units than the Switch to have better prices… And not as expensive to produce as you would think.
 
LordOcidax said:
Iphones doesn't include controllers, charger a dock station, hdmi cable… And probably Apple orders way more units than the Switch to have better prices… And not as expensive to produce as you would think.
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Most analysis by firms estimate that iPhone 16 BOM https://appleinsider.com/articles/2...cost-a-little-more-to-make-than-the-iphone-15

HDMI cable for pennies? The dock?Controllers? Really? (Haptics btw is built-in the phone so you can take that right off the cost)… Come on…

You are conveniently disregarding a much much higher resolution screen, lots of expensive cameras and sensors, etc…

Come on, if this is the true BoM Nintendo got ripped off quite a bit.
 
Panajev2001a said:
Most analysis by firms estimate that iPhone 16 BOM https://appleinsider.com/articles/2...cost-a-little-more-to-make-than-the-iphone-15

HDMI cable for pennies? The dock?Controllers? Really? (Haptics btw is built-in the phone so you can take that right off the cost)… Come on…

You are conveniently disregarding a much much higher resolution screen, lots of expensive cameras and sensors, etc…

Come on, if this is the true BoM Nintendo got ripped off quite a bit.
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Iphone is massive, probably sells between 40-50 millions every year… Totally different business models. Take the Steamdeck vs Switch as an example. Nintendo can manage to get way better prices for parts vs Valve. + Nvidia tech is not cheap.
 
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LordOcidax said:
Iphone is massive, probably sells between 40-50 millions every year… Totally different business models. Take the Steamdeck vs Switch as an example. Nintendo can manage to get way better prices for parts vs Valve. + Nvidia tech is not cheap.
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iPhones sell 150 million units per quarter during launch/Holiday quarters and 60-70 million units per quarter for the rest of the year. The economies of scale are just completely different.
 
LakeOf9 said:
The first one felt like a big improvement over the Wii U Gamepad, which was he actual fisher price toy lol

But yes, good to see Nintendo didn't cheap out on cost this time
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No Hall effect or better joysticks tells us otherwise. They absolutely cheaped out and then overcharged.

Jokes on them because I am only buying the system and every first party single player game and a few party ones and subbing to their service.
 
KungFucius said:
No Hall effect or better joysticks tells us otherwise. They absolutely cheaped out and then overcharged.

Jokes on them because I am only buying the system and every first party single player game and a few party ones and subbing to their service.
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I was talking about the hardware in terms of the specs, but yeah, fair shout on the controllers. The entire first party industry is scamming us with controllers tbh lol, thank god for OEMs
 
Panajev2001a said:
How does this relate to the estimated BoM you are dancing around?
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Because again: the economies of scale are very different. The pricing you will get on any component is a lot cheaper when you are ordering as many per quarter as Nintendo will order over the Switch 2's entire life (and that's the best case scenario for Switch 2 sales).

In other words, Apple is paying very cheap prices for very sophisticated tech, and the only way to get those prices is to commit to buying more of that tech than would go in four generations of hardware.

Or, in other words, it's why a Mac and a PS5 Pro will have similar BoMs, in spite of the Mac having far more modern and sophisticated hardware.
 
LakeOf9 said:
Because again: the economies of scale are very different. The pricing you will get on any component is a lot cheaper when you are ordering as many per quarter as Nintendo will order over the Switch 2's entire life (and that's the best case scenario for Switch 2 sales).

In other words, Apple is paying very cheap prices for very sophisticated tech, and the only way to get those prices is to commit to buying more of that tech than would go in four generations of hardware.

Or, in other words, it's why a Mac and a PS5 Pro will have similar BoMs, in spite of the Mac having far more modern and sophisticated hardware.
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I do understand scale, but the level of sophistication they spend money on is another level and it takes that into account. Look at even manufacturing process and when the chip was mostly finalised: T239 taped out 4 years ago (2021) and it is using a modified 10nm process while Apple buy very premium capacity at TSMC for the most bleeding edge (iPhone 16 is on a second generation 3nm process).

The manufacturing costs on that node should be a LOT cheaper than what Apple has to pay as the costs in semiconductors likely go up exponentially.
 
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Panajev2001a said:
I do understand scale, but the level of sophistication they spend money on is another level and it takes that into account.
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The level of sophistication is itself something that can be afforded, at least in part, because of the scale though. And Nintendo is going for neither that level of sophistication, nor for that tech, at least so far. The Switch 2 is also using more custom parts (at a much lower scale) than the iPhone is, given its nature as a games machine, versus iPhone being a general purpose phone.

Panajev2001a said:
Look at even manufacturing process: T239 taped out 4 years ago and it is using a modified 10nm process while Apple buy very premium capacity at TSMC for the most bleeding edge (iPhone 16 is on a second generation 3nm process).
Click to expand...

Right, but conversely, there are far fewer 10nm chains now, given the bulk of the consumer electronics industry has long since moved on from the 10nm process, and therefore you are paying more to secure fabs for yourself.

It's not a straightforward conversation, there are absolutely enough variables involved that with the economies of scale involved, I can see the BOMs for the devices being very close.
 
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DeepEnigma said:
That nVidia tax.
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I think it's in big parts also down to many other aspects. the 120hz VRR HDR screen, the detachable joycons with mouse sensors, gyros etc.

if this was a stationary box you connect to a TV it would be a bit more obvious that the APU is the biggest reason for the production costs. but with all the additional parts needed to make the Switch concept work, I think Nvidia isn't entirely at fault here
 
Magic Carpet said:
Add $7.88 for an OLED model in a few years.
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The big advantage Switch had over PlayStation is that it had a set configuration with one native display that studios could target with games to deliver a standardized experience.
In contrast to Switch's native display the PS5 can only be used on an endless range of TVs and monitors from 4:3 to wider than 16:9, from SD to 8k in CRT, LED, OLED and Plasma.
Even with the PS5 narrowed down to just recent 4k 16:9 TVs there's little consistency between displays and the PS5 can't deliver a standardized visual experience.
Nintendo doubling the number of Switch displays (from 1 to 2) brings Switch closer to PS5 in terms of display inconsistency.
Sony needs to make a standardized display configuration that works plug-and-play with PlayStation consoles so users can obtain a standardized experience on par with the Switch's native display.
 
LordOcidax said:
The standard cut from retailers is around 20%, when they have offers or want to clean the inventory is another story… But im pretty sure the retailers are not going to gain just $1 dollar with the Switch 2.
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I haven't worked retail in many years but the PS2 era, I do know it was around a buck. They don't make anything on consoles.
 
LordOcidax said:
I think that some people are going to shitpost everything related to the Switch 2… You know the Console Warriors.
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They're threatened because Switch 2 is an Oppenheimer-sized disruption. They are trying to spread FUD everywhere.
 
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I guess I am older and Remember when Companies came out with hardware so ahead of the curve, they took a loss on each unit. Sony with the PS3 for example.
 
CobraAB said:
Could have gotten an OLED in there at that price.
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You are so short sighted. Nintendo knows they can double dip and come out with the "pro" version 2 years later with an oled screen and slightly more built in storage. They can charge $600 and know that the hardcore Nintendo fans will eat it up. Hell Nintendo fans will even justify the price and some will even get mad that Nintendo did not charge enough. Cult like think.
 
Gamer79 said:
I guess I am older and Remember when Companies came out with hardware so ahead of the curve, they took a loss on each unit. Sony with the PS3 for example.
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Yup.

And subsidizing was probably why there was a stretch of time new consoles would be about $200. Maybe $300. I'm talking about the mainstream consoles not 3DO or Neo Geo. Heck even DC and Gamecube I think were $200 at launch. Same as some consoles in the 80s.

Then everything just amped up and has been creeping up since.
 
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Sebastian1295 said:
They're making up for the cost to produce this thing by charging 80 dollars for a standard mario kart game and 70 dollars for a 3D donkey kong game that has a god awful artstyle. Add in the overpriced accessories they're selling and nintendo online subscriptions, and they're robbing folks blind and making bank.
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Video game consoles make up for their cost by selling games, accessories and services. More at 11
 
People actually thought Nintendo was making iPhone margins on their hardware?

My guess is the Switch 2 will be breaking even at launch when all expenses are considered

Explains why Mario Kart and Donkey Kong are so expensive too, they are trying to make up on software what they aren't making on hardware
 
Jinxed said:
Ps5 stopped selling at a loss in 2021 iirc.
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It's floated around cost since than and any promotion put it back in red. It's often mentioned in Sony financial reports.

Panajev2001a said:
Most analysis by firms estimate that iPhone 16 BOM https://appleinsider.com/articles/2...cost-a-little-more-to-make-than-the-iphone-15

Come on, if this is the true BoM Nintendo got ripped off quite a bit.
Click to expand...
Small costs sure adds up. There is no way Nin pays 150$ for that chip, based on Iphone BOM
Switch2 compared to Iphone doesnt have modem (-20$), sensors (-20$), camera cost probably pennies (-120$), probably some saving on screen and frame (let's say -30$), but have more memory (+8$) and console specific parts - buttons, joysticks, cartridge reader, dock station etc (let's say it's +30$). That will put total saving compared to Iphone to 162$ and chip cost at given BOM at 60$

Panajev2001a said:
The manufacturing costs on that node should be a LOT cheaper than what Apple has to pay as the costs in semiconductors likely go up exponentially.
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Apple has it's own design, and Nin will pay Nvidia R&D and profit margin for design.
 
Some people on here don't understand that's just the cost of the BOM. I doubt Nintendo has a teleporter to get it from Dongguan to your local Walmart completely avoiding shipping and duties.
 
Panajev2001a said:
I do understand scale, but the level of sophistication they spend money on is another level and it takes that into account. Look at even manufacturing process and when the chip was mostly finalised: T239 taped out 4 years ago (2021) and it is using a modified 10nm process while Apple buy very premium capacity at TSMC for the most bleeding edge (iPhone 16 is on a second generation 3nm process).

The manufacturing costs on that node should be a LOT cheaper than what Apple has to pay as the costs in semiconductors likely go up exponentially.
Click to expand...
If 8 nm costs half of 7 nm, say, then that should be ~$5000 per wafer compared to the $18000 per wafer Apple is estimated to be paying. Using a die calculator, I make the Switch 2 silicon cost ~$21, but that doesn't include any of Nvidia's margin. So the actual cost of the APU to Nintendo might not be a million miles away. And as pointed out above, after taking out the phone specific components, you're in the ballpark of the Switch 2's BOM, and then you need to add in the proprietary components and take into account higher prices due to significantly lower volume.
 
Madserb2023 said:
Some people on here don't understand that's just the cost of the BOM. I doubt Nintendo has a teleporter to get it from Dongguan to your local Walmart completely avoiding shipping and duties.
Click to expand...

It's completely baffling to see.

Gamer79 said:
I guess I am older and Remember when Companies came out with hardware so ahead of the curve, they took a loss on each unit. Sony with the PS3 for example.
Click to expand...

Well, that's not really possible anymore. At least not at the price points they're charging.
At least the PS5 shipped with a faster storage solution than most PCs at the time.

Taking a loss on each unit doesn't make sense anymore, now that component prices don't drop as fast.

This is just entitlement speaking through you.
 
How come it´s so expensive? Gaf-experts told me that the tech is fairly outdated by modern standards and should be dead cheap.
 
Great Auk said:
Does anyone sell anything without any profit?

Without profit they wouldn't make a Nintendo Switch 2 to begin with, or anything else for that matter.
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Actually, consoles has a history to be sold at a loss for the company in the first year or something, with the mindset that getting three or four games reach the profit - doesn't need to be at launch
 
So starting with the $338 customs duty figure and factoring in the estimated $11 to $23 for packing and transportation, the landed cost seems between $349 and $361. After retailers take their cut from the selling price, and considering Nintendo's manufacturing, marketing, and distribution costs, the estimated profit per unit for Nintendo could be in the range of roughly $40 to $70?
 
hemo memo said:
So starting with the $338 customs duty figure and factoring in the estimated $11 to $23 for packing and transportation, the landed cost seems between $349 and $361. After retailers take their cut from the selling price, and considering Nintendo's manufacturing, marketing, and distribution costs, the estimated profit per unit for Nintendo could be in the range of roughly $40 to $70?
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Development costs are very high, people have to be paid for support and updates for the whole gen, you have to consider the costs for fixing and replacing faulty products in the guarantee period + shipping costs for it. Also marketing and i bet many more things i didn't think of. I don't think they make any profit on hardware in the first couple of years.
 
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