[ad_1]
Previous reports have taught us that two new Nintendo Switch models could be on the way, possibly as early as this year. Officially, Nintendo has not considered this possibility, although it has declared not to announce the new systems at E3. This has turned out to be true, but a new Wall Street Journal report released this week, during E3 2019, reveals new details regarding these supposed new models of Switch.
Specifically, the report states that Nintendo has decided to move the manufacturing of new consoles in Southeast Asia rather than in China. This is due to concerns about potential tariffs imposed by the United States on electronic products manufactured in China. As previously stated, President Trump's proposed 25% tax rate would affect video game consoles, as well as smartphones and computers. In theory, this could lead to price increases on game consoles – from Nintendo, as well as Microsoft and Sony – as companies pass the costs on to their consumers.
The alternative would be to absorb the costs themselves, which is obviously not a welcome concept for companies. Game consoles are not historically the ones where money is earned. Systems are often sold at a loss or with very small margins, with profits coming from software and services. These margins improve over time, but a rate of 25% would still be unwelcome.
If the 25% rate comes into effect for Switch consoles shipped to the United States, it would affect the amount of console sales made by Nintendo and other companies. Nintendo has been the benchmark in this area, however, as the company has maintained switch sales from day one in 2017 earns money on every console sold.
If the 25% tariff comes into effect, it could reduce the switch's profit profile, which probably explains why Nintendo chose to move the console's production outside of China.
According to the WSJ report, Nintendo has already transferred the production of the existing Switch model, as well as the two new models alleged, to Southeast Asia. For new systems, one would have a form factor similar to that of the existing model, but would have better components, the other should have a different appearance and lower specifications making it less expensive. Since the systems are currently in production, they could be commercialized soon, said the WSJ.
Nintendo declined to comment on the report when WSJ approached it.
We do not know when Nintendo will announce the new Switch models, if they are really real. Having no new material to discuss at its Direct conference this week, Nintendo has made a series of software announcements, including The Witcher 3 for Nintendo Switch and a sequel to The Legend of Zelda: the breath of nature.
Nintendo has long been offering revised models of its gaming hardware, especially on the handheld side. The supposed new systems would not be a new generation of Switch hardware, but simply improved or refined versions of what already exists on the market.
More news from E3:
[ad_2]
Source link