Nintendo Denies New Switch Model Will Yield Higher Profit Margin
Nintendo Denies New Switch Model Will Yield Higher Profit Margin
(Bloomberg) -- Nintendo Co. denied that profit margins on its new Switch model will increase when compared with the current version, which costs $50 less.
The Kyoto-based video gaming giant said claims that its profit margin from the new device will increase compared with the original Switch are “incorrect,” according to a statement on its Twitter account. The company also added that it has no plans to launch any other model, apart from the one featuring a 7-inch OLED screen scheduled to be released in October.
Some analysts had previously estimated that upgrades to the new Switch will cost about $10 more per unit to produce, Bloomberg News reported last week. That would mean Nintendo could earn higher profits after pricing the new model at $350, a significant upgrade from the current $300 device.
Nintendo, which reported record earnings during the pandemic-fueled gaming boom, is counting on the new Switch to sustain its momentum, after rivals Sony Group Corp. and Microsoft Corp. rolled out new consoles last year. But investors have so far taken a negative view of the new hardware and its pricing, with company shares down more than 5% since the announcement earlier this month. The stock slid about 2% in Tokyo trading on Monday.
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