The Japanese teardown firm Fomalhaut has confirmed that the Nintendo Switch manufacturing cost is around $257, while the console is being sold at around $299.
That’s a roughly 42 dollar profit for Nintendo for each Switch sold, and considering how many Switches have been sold it comes up to a pretty tidy amount.
When the Nintendo Switch was first revealed back in October of 2016, Nintendo announced along with it that, unlike the Wii U, the Nintendo Switch would not be sold at a loss.
This meant that the Switch would not be sold for less than it cost for the parts and man-hours to build it. So far, it seems to be holding true.
The Wii U’s poor sales performance caused a very large deficit for Nintendo for the past few years, and while the Wii U had a number of good games, the Switch is already outperforming it.
This is all leaving the Wii U to serve more as a poorly-performing bridge between the original Wii and the Switch than a console of the last generation.
According to Fomalhaut, the Switch is also expected to sell around 30 million units by the end of 2018, a performance that matches up with Nintendo’s assertion that they would be doubling production of the Switch to meet demand. The Switch’s release date last month was marred by numerous reports of stores running out of the consoles due to being under-supplied.
The relatively low Nintendo Switch manufacturing cost is working in its favor, however, as the console has sold even faster than the PS4 in Japan, selling 500,000 units in its first month. However, there have been problems.
The Nintendo Switch manufacturing cost being so low is also working against it, as the console has experienced a number of problems such as bending, dead pixels, and more. Hopefully Nintendo will be able to fix these problems in the near future.
