Here the Switch 2 is sharper than the Series S version. Unless it's using incredible amount of sharpening, it has to be using some form of reconstruction.
Nintendo Switch 2
- Thread starter Shifty Geezer
- Start date
Here the Switch 2 is sharper than the Series S version. Unless it's using incredible amount of sharpening, it has to be using some form of reconstruction.
Some of those shots do look sharper but I think Capcom just didn't put any effort into the Series S version.
There's no reason Series S should be the same resolution as PS4 and less sharp than Switch 2.
Nintendo says tariffs weren't factored into Switch 2 price, but it's "something we're going to have to address"
Nintendo has pushed back at suggestions Switch 2's price - which has already left some fans reeling - was influenced by…
www.eurogamer.net
Nintendo says tariffs weren't factored into Switch 2 price, but it's "something we're going to have to address"
I'm sorry Nintendo, but in this economy, they are going to abandon their tradition of selling their consoles at a profit. If they launch this at 600$ their business model will be in danger.Nintendo says tariffs weren't factored into Switch 2 price, but it's "something we're going to have to address"
Nintendo has pushed back at suggestions Switch 2's price - which has already left some fans reeling - was influenced by…
Nintendo says tariffs weren't factored into Switch 2 price, but it's "something we're going to have to address"
Their business model is already in danger. And it isn't just them, Playstation and Xbox as well. And all physical media.
Selling consoles at a loss was already out of fashion. The rise of forever games and free to play on consoles sank that boat a generation ago. And now, the cost of producing games is rising, the cost of manufacturing those games is rising, and once the largest market in the world closes or drastically changes it's postal service, the cost of shipping those physical games to retailers is going to increase.
It seems to me a very difficult situation.
If it is 43 percent, how much could they reasonably be expected to absorb for a product that would sell in the millions or tens of millions of units?
I doubt there is that much margin at launch- and I would be surprised if there is scope to inflate the price in other regions to cross-subsidize the US market, which is the wealthiest of the major markets.
I could see that being a source of considerable upset to other markets if attempted.
If it is 43 percent, how much could they reasonably be expected to absorb for a product that would sell in the millions or tens of millions of units?
I doubt there is that much margin at launch- and I would be surprised if there is scope to inflate the price in other regions to cross-subsidize the US market, which is the wealthiest of the major markets.
I could see that being a source of considerable upset to other markets if attempted.
If they were going to accept large losses - would they better off using the equivalent amount required to subsidize US consumption to cut the price in all the other regions and get faster uptake in the first year in Europe, Japan, RoW etc.
At least all of that flows to a price cut actually encountered by the consumer, rather than offsetting very large new tax.
At least all of that flows to a price cut actually encountered by the consumer, rather than offsetting very large new tax.
It isn't just Nintendo. They may make some money on consoles, but as a retailer, I sure as hell don't. I'm not even sure we'll be able to carry Switch 2s at launch because of the way allocation works with our vendors (they favor their higher volume clients I assume), and I know we got put on the list for preorders but haven't been given wholesale pricing yet. But, from memory, I think we make about $12 on a Switch OLED, depending on how much it costs to ship, maybe even a bit less. And I very much doubt the companies wholesaling Nintendo consoles are making huge percentages on them. All of the wholesalers I have accounts with sell most consoles at exactly the same prices.
For a tax imposed price shock that is so high (with its cause so clear) - I'm not sure what benefit there is in trying to absorb any of it - losing all margin or taking a loss that would still be very, very limited in terms of softening the impact.
It seems like a disaster, and no fault of Nintendo or any of the manufacturers here, or the channel - completely outside their control.
It seems like a disaster, and no fault of Nintendo or any of the manufacturers here, or the channel - completely outside their control.
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Sony makes far more money off forever games than they did prior to PS4. Selling in game content is the most lucrative model possible.
Subtlesnake
Regular
I wonder if it would be such a terrible idea to delay the launch in the US to sort out different manufacturing arrangements. There is also the possibility of the tariffs being stopped by legal challenges.
They could still sell in US with the tariffs for those who have to have a Switch 2. Then hope it sorts out later. There's no loss to Nintendo to sell at $1000 a unit so long as it's the distributors paying the price, passing that onto the customers. Scalpers were hoping to do that anyway - it's just move the scalping to the Federal Government, I guess!
I'm not sure how accurate chatgpt is but I requested SIE's operating margin for the last 3 years.
1. Fiscal Year 2020 (ended March 31, 2021)
- Sales (Revenue): ¥2,656.3 billion
- Operating Income: ¥342.2 billion
- Operating Margin: ~12.9%
2. Fiscal Year 2021 (ended March 31, 2022)
- Sales (Revenue): ¥2,739.8 billion
- Operating Income: ¥346.1 billion
- Operating Margin: ~12.6%
3. Fiscal Year 2022 (ended March 31, 2023)
- Sales (Revenue): ¥3,644.5 billion
- Operating Income: ¥250.0 billion
- Operating Margin: ~6.9%
Looking at how their margins are dropping heavily here over time. I don't think they can afford further loss to compensate for the tariffs. They are already the market leader and Xbox is no longer competing in the market place. I can't see them wanting to take on additional loses for no reason, there must be a massive amount of revenue coming from these F2P per console sold to be worth it.
If we assume that tariffs stay, then conservatively/optimistically the increase may be $100 dollar more per unit. To make up $100 in F2P MTX, at a 30% margin, a player would need to buy approximately ~$<400 dollars worth of MTX for Sony to capture $100. Now you're only back to non-tariffs price point, which I assume is near break even now.
One thing to note if the tariffs stay in place, the whole market contracts, and people will hold-on to their money. They would be selling less consoles to begin with, losing any discounts they have on volume, and then further lose additionally on compensating for tariffs. All of this with no guarantee of return. F2P titles do not require subscription services. And F2P titles can all be played on PS4 and mobile, PC, laptops, etc.
People are more likely to just use their current devices than buying a new one. I can't see the market looking at a gaming only system thinking this is a better deal than alternative options that have more functionality outside of gaming.
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Not saying they can eat the tariffs. Only that see colon's statement about forever games as a negative is misplaced. Fortnite has done wonders for Sony's revenue!
Indeed, but their operating margin is lower than it has ever been.
Is it? They are selling the Japanese only Switch 2 for the equivalent of 330€. Haven't made the calculations but it can't be explained just with the weak yen. I can't be sure of course, but if I were to speculate, I think that Europe and US prices have some pretty healthy margins built in. Tariffs have ruined all plans now.
Sony's total operating margin has dropped from 13 to 7 percent. That's nearly 1/2 loss. 2023 and 2024 still need to be calculated, but it wouldn't surprise me if it fell further. There is a reason why their titles are suddenly coming to PC as well.
Nintendo has generally been around 31% IIRC. They don't make enough from sub services and make very little from MTX as they don't have F2P on their platform until Switch 2 arrives. I'm not sure how this will change things for Nintendo. They can't afford to lower prices on hardware until the sub services start increasing.
They could try 'going for it'. But in this type of environment, the best answer may be to just wait.
Unfortunately since our last round of comments here, the tariff on China has increased to 104%. I'm not sure if this is a factor for them in delaying pre-orders in North America. But hopefully they continue forward in Canada. I was ready to go in person, now I'm not sure if it's still on. I will call Gamestop tonight.
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They increased the operating margins by 37% in the last quarter. It's been going up, but here comes the tariffs
Nintendo could be the company that's hit the hardest since they still relay on hardware profits. Switch 2 will boost their digital store and mtx, but the biggest challenge will remain to try and build a good install base.
I have just seen that Canada preorders just got delayed, so that's unfortunate.
