Support NeoGAF

[N30RYU]

 

[SpongebobSquaredance]

I want Reggie back. Coolest guy PR guy on the planet.

 

[Reallink]

They aren't manipulating Switch margins just so they can issue a correction of an inaccurate report.

It's definitely true though that the Switch OLED isn't just Nintendo swapping in an OLED screen into a Switch which is one reason why NIntendo issued the correction.

That would be a fair point if this was a one off thing limited to the Switch OLED, but their public hardware profit/loss claims haven't passed the smell test since Gamecube.

 

[TheBomb]

 

[Tarin02543]

IMO Nintendo missed a big opportunity here. They should of used the newer Tegra X1+ chip with the 4k upscaling along with the oled screen, and updated Ram and called it the Switch+ for $399. IMO the new oled model isn't worth it.

But they did?

 

[tr1p1ex]

That would be a fair point if this was a one off thing limited to the Switch OLED, but their public hardware profit/loss claims haven't passed the smell test since Gamecube.

nonsense. but i heard Bloomberg is hiring. (Or I should say send that to Bloomberg. They'll publish it. )

 

[cireza]

because the info wasn't accurate. And they deemed it important enough to issue a correction. And because people like you believe this stuff.

And you believe whatever Nintendo say to the public, this is exactly the same.

 

[tr1p1ex]

And you believe whatever Nintendo say to the public, this is exactly the same.

lol. afaik Nintendo doesn't have a track record of lying to the public when commenting on rumors. Corporations are also subject to SEC oversight in what they can and can't say to investors. And/or to foreign government oversight as well.

I know Bloomberg has a history of reporting misinformation specifically around rumors surrounding upcoming products launches. And Bloomberg can run reports of what analysts say all day long with no consequence...except readers might start to take those types of reports with a grain of salt.

 

[cireza]

lol. afaik Nintendo doesn't have a track record of lying to the public when commenting on rumors. Corporations are also subject to SEC oversight in what they can and can't say to investors.

I know Bloomberg has a history of reporting misinformation specifically around rumors of upcoming products launches and rumored profit margins and cost of parts. And Bloomberg can run reports of what analysts say all day long with no consequence...except readers might start to take those types of reports with a grain of salt.

I don't care about Bloomberg. I was already thinking, considering the price, that they were probably making a huge margin on the system. That's simply my opinion, anyone can and should think whatever they like.

 

[tr1p1ex]

I don't care about Bloomberg. I was already thinking, considering the price, that they were probably making a huge margin on the system. That's simply my opinion, anyone can and should think whatever they like.

lol. OF course it's your opinion. Never any doubt about that.

 

[b6a6es]

Another proof that Takashi Mochizuki is a certified clown

 

[Solarstrike]

Nintendumb

 

[Zannegan]

I don't care about Bloomberg. I was already thinking, considering the price, that they were probably making a huge margin on the system. That's simply my opinion, anyone can and should think whatever they like.

Eh. Anyone can and should think whatever they like within reason.

"Margins" can be manipulated with any kind of expense. For a simplistic example, 20% of every Switch OLED sold can be ear marked to pay an associated marketing expense, and legally reported as a -20% lower margin. Similary, the cost of the new assembly line or the R&D designing the console can be paid for with a per unit margin deduction. The problem is these are massively front loaded expenses, and pinning this burden on the first 5 million units doesn't really represent the cost of a product likely to be produced in the 100 millions, and sold for 5-10 years. These are the most rudimentary examples for how you could claim a loss on a $350 device with a $150 BoM, certainly experts in the field would know loopholes that go several layers deeper.

Of course how they choose to count development costs can be... amortized (??? sorry if that's the wrong term, reaching way back to Accounting classes here) in different ways. All the things you mention--R&D, marketing, production--are rolled into the cost of each unit in different ways, which is what a lot of people in here have been trying to explain: the cost of the hardware is more than just the BoM + shipping.

The numbers very well could be, and I believe often are, frontloaded. And of course if they continue selling the system over time it could (and they hope it will) reach higher profit margins per unit. Then again, so will the base Switch. The reason companies frontload those numbers isn't to obfuscate costs or make consumers think they're getting a better deal than they are. In fact, given that all of that has to be done before a system ever launches, it's more accurate to report costs on the first few million units. But the main reason a company like Nintendo might frontload the numbers is that success isn't guaranteed. If, for example, you put out hardware that ends up being another Wii U and you've planned to (again, sorry if this is the wrong term) amortize over the next five years and 100 million units, you're in big trouble, and your investors will and should cry foul when you retroactively apply those costs and a bunch of money "disappears."

But anyone who understands the bare basics of business accounting (and I have only a fuzzy grasp at that) already knows these things, which is why we've been rolling our eyes at the drama queens wringing their hands over the "Nintendo charging $50 for a $10 upgrade!" outrage. It isn't our fault that people even more ignorant than I am want to jump in the conversation, and it's not Nintendo's responsibility to correct every consumer's misapprehensions. What they are responsible for is making sure that their investors, who might well read the innaccurate (or at minimum misleading) Bloomberg piece and start buying or trading expecting a better return.

Which they did. *shrug*

 

[Le Big Mac]

Nintendo is a listed company so they have a lot of onerous reporting restrictions so they can't willingly lie to investors.

However they can (and often do, not exclusive to Nintendo) willingly omit information if they feel it doesn't serve investors best interests. Can take the form of reporting exemptions or in Ninty's case, not disclose the estimate in calculating profit margins on the product on scaled production. This can be DPT, BEPS schemes in tax avoidance to not disclosing the exact cost of sale for product or the average cost at any given time.

Whilst Bloomberg doesn't have anything backing their story, Nintendo's tweet doesn't mean anything.

 

[Umbasaborne]

Those insiders having a hard time now.


Of all insiders, Nintendo insiders are by far the worst. And Jason will probably hide in his rock again.

“Waaaa BuT WeRe pRoViDinG a SeRvIcE!!”

 

[DavJay]

Material, labor and research cost a bit more. Nintendo probably making $39 off each console not $40

 

[MrLove]

Publicly traded MS is always lying too.

 

[Razvedka]

Seems an awful lot to me like all the analysts & insiders the past year really shit the bed with Nintendo. Credibility got obliterated.

 

[scydrex]

Nintendo would never would have acknowledged they are making more profit with the Swtich oled if true. Who knows it they investors know they are making more profit and that PR lied about it. If I were an investor and Nintendo did that I wouldn't care. The Switch oled cost $50 more that's why the price increase yeah right... for basically an oled,32gb more and redesign plastics.

 

[Three]

My guess is that they are paying roughly the same at this current time only becuase the chip component cost is higher nowadays due to the shortage. Therefore the new switch with its smaller node hasn't had that much of a saving compared to whatever volume contracts they may of had before. They certainly aim to be making more profit from it down the line though otherwise what's the point of it?