New models of Nintendo switches now in production - E3 2019

We know from previous reports that two new Nintendo Switch models could be on the way, possibly this year. Officially, Nintendo has not addressed the possibility, although he did say he would not announce the new systems during E3. That turned out to be true, but a new report from The Wall Street Journal published this week, during E3 2019, reveals some new details about these new Switch models.

Specifically, the report indicates that Nintendo has decided to move to the manufacture of the new consoles to Southeast Asia instead of China. This is the result of concerns about the potential tariffs of the United States for electronic products manufactured in China. As previously reported, the tax rate of 25 percent proposed by President Trump would impact videogame consoles, as well as smartphones and computers. In theory, this could lead to price increases in the gaming consoles, both Nintendo and Microsoft and Sony, as companies pass the cost to consumers.

The alternative would be to absorb the cost themselves, which obviously is not a welcome concept for companies. Game consoles are not historically where the money is made in the gaming business. Often, systems are sold at a loss or at very low margins, and profits come from software and services. Those margins do improve over time, but a 25% tariff would not be welcome.

If the 25 percent rate goes into effect for Switch consoles shipped to the United States, that would affect the amount of money that Nintendo and other companies earn in console sales. However, Nintendo has been the outlier in this area, since the company maintained since the first day of Switch sales in 2017 that it earns money in each console sold.

If the 25 percent tariff comes into effect, that could reduce the Switch's profit profile, which is probably why Nintendo has chosen to move console production outside of China.

According to the WSJ report, Nintendo has already moved the production of the existing Switch model, as well as the two new rumors, to Southeast Asia. With respect to the new systems, it is said that one has a shape factor similar to the existing model but that it has better components, and the other is expected to have a different appearance and lower specifications that make it less expensive. Since the systems are now in production, they could be launched soon, WSJ said.

Nintendo declined to comment on the report when WSJ addressed it.

It is not clear when Nintendo can announce the new switch models if they really are real. Without new hardware to discuss during its Direct Conference this week, Nintendo made a series of software announcements, including The Witcher 3 for Nintendo Switch and a sequel to The Legend of Zelda: Breath of the Wild.

Nintendo has a long history of offering revised models of its gaming hardware, particularly on the side of the handheld. The rumor of new systems would not be a new generation of Switch hardware, but simply improved or refined versions of what already exists in the market.

Post a Comment