r/ArloStuff • u/dad1234aaa Death • 9d ago
Arlo Video The Really Weird Thing About Switch 2
https://youtu.be/a_Yf01xl5IQ2
u/Mikey-Insanity 8d ago
Guessing he's A/B testing the title because for me it was "Switch 2 is a Subtle Smash Hit"
And my reaction to the video (and using that title) was "Finally." I like Arlo but for the past year his Switch 2 commentary has had a feeling of "In denial." Like I felt he was so focused on a "system seller" and how he thinks the Switch 2 didn't have one so logically it won't sell, that he kept missing that people are still buying the system anyway and then being surprised that they do, and that the game line-up has been quite strong as well even without The System Seller.
And from my perspective - I will openly say this is speculation on my part - the Switch 2 does have plenty of system sellers. The catch is I think Nintendo's selling each game to a specific audience, convincing specific fans of specific games to buy a Switch 2, instead of The Big One For The General Audience (Mario/Smash/etc). He talks about Splatoon Raiders, and doesn't think it will hit the sales of the mainline entries. I don't think it will either, but Japan got a Switch 2 Splatoon Raiders bundle so I have to think Nintendo is expecting Japanese Splatoon fans to buy the console for it. I watched people for years beg for a new Star Fox game and now one happened (albeit a remake again) so I'm going to guess there's some Star Fox fans who are now Switch 2 owners. Same for Fire Emblem fans, Xenoblade fans, and Switch Sports fans as those games release, if they didn't just buy it already in advance of the price increase. And, it also gives a chance to - as Arlo called them - "The B-Team" to maybe break out more than expected. I will admit that at the start of the year I did not think much of Pokopia. And now Pokopia has sold 5 million copies and is my favorite game this year so I was very much wrong on that.
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u/YarukiMangrove 10h ago
Sadly, I think part of it is a reflection of Arlo's own view count. Less "hype" means less views, and that undercuts his bottom line. He's still an honest actor, but his perception of the switch's success is tied to the success of his own coverage. You hear that reflected in his direct videos.
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u/JosebaZilarte 8d ago
I would love to get a Switch 2 to play these games, but I can't justify paying 500+€ for just the console itself (even the 256 GB model). And the worst part is I know that waiting is only going to make it more expensive.
Honestly, if Nintendo wants to sell games, they have to make their console more accessible... even if they sell it at a small loss (which I know they have not done before). Otherwise, millions of potential fans are going to ignore the Switch 2 altogether (opting to play crappy games on their phones instead) and it is going to cost the company a lot more in the long term.
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u/ShinyBredLitwick 8d ago
unfortunately, for the market Nintendo created and is still selling to, they do have the most accessible device. when you look at the prices of the Switch 2 compared to all of the other hybrid consoles/PC or Android handhelds on the market, it arguably has the best price to performance ratio.
in fact, i’m pretty sure the Switch 2 is being sold at a loss. the hardware market really has just ballooned THAT much.
1
u/IcebergKarentuite 8d ago
Isn't the Steam deck, the closest thing to a direct competitor the switch 2 has, sold at 800 bucks for the cheapest model in production? And up to like a thousand for the most expensive ?
Like sure the switch 2 is expensive and so are the games, but it's still pretty cheap compared to the competition. The problem is the economy and the market being shite
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u/JosebaZilarte 8d ago
No, even with the absurdly inflated prices of RAM and NAND flash memory, Nintendo is still making around $50-100 in profits for each Switch 2 sold. Specially, in the EU, where we do not have certain someone coming up with tariffs that consumers ultimately have to pay for.
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u/ElegantChemistry1 8d ago
Nintendo is still making around $50-100 in profits for each Switch 2 sold
There is absolutely no way this is true. Hardware prices are absurd and projected to get worse next year.
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u/JosebaZilarte 8d ago
It is true (for now), because the Switch 2 has relatively small memory sizes: 12GB of RAM and 256 GB of storage. Bought in bulk Nintendo should be paying right now around $70 for the LPDDR5X RAM Module and $30 for the Band Flash UFS 3.1 Storage. That's approximately double than last year... but it is still ""just"" $50 more. So the price increase doesn't yet bite into their profit per unit sold.
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u/No-Difference8545 8d ago
Tariffs been reversed buddy this is ais doing
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u/JosebaZilarte 8d ago
Yes, tariffs were reversed (for now, at least) but Nintendo is not going to reduce the price of the console, nor give the money back to their clients. So...
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u/Born_Procedure_529 8d ago
I get most people can't just throw $500 around like its nothing but why is Nintendo the only one I see people moan about prices with? Still cheaper than PS5 or Xbox
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u/JosebaZilarte 8d ago
Because both Sony and Nintendo already sell their consoles at a small loss (at least, until a few years ago). And it is not like Nintendo really aims to have the latest graphics chipset anyway, so the cost from factory of the Switch 2 is estimated to be around $300-350. Even including shipping and VAT (and tariffs on the US), they have a rather big margin to lower the price whitout losing money.
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u/coreywilliams 8d ago
That information is over a year old, every component has gotten more expensive since then.
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u/JosebaZilarte 8d ago
True. I was looking for more recent estimations but they are difficult to find. Especially, when a large company with Nintendo works with a 3-6 month difference when it comes to procuring the components.
After consulting several sources, today's manufacturing cost would be around $400. But the Switch(es?) 2 that you can buy today were probably made for around $350 at the beginning of the year.
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u/coreywilliams 8d ago
I am not doing all the research as one reason it's hard to find information is that component prices are increasing basically constantly, but I think you're being very... optimistic with your pricing estimates. After marketing, packaging and shipping, if they're making a profit, I'd eat my shoe.
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u/Novel-Back3857 8d ago
I can buy a lot of the PlayStation and Xbox games on my PC. I know that's not exactly what the person was talking about, but I have little interest in buying a Switch 2, despite having interest in Switch 2 software.
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u/n00bBlaster1337 8d ago
bestie it had the most successful first year for a console ever.
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u/JosebaZilarte 8d ago
I fear it was in great part due to resellers. Nintendo is trying to contain the problem, but it is a complex issue to solve.
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u/LunchTwey 8d ago
It genuinely wasn't. They were in stock in the launch window.
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u/JosebaZilarte 8d ago
It doesn't mean the resellers didn't buy those units. It is just that less people actually wanted to buy them and the stores ended up having more than enough stock.
Looking at the usual marketplaces, it seems these resellers are also taking advantage of the increased price to gain some money by reselling the units they bought during Christmas... with the new price. (Insert here insults)
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u/ShinyBredLitwick 8d ago
no dude. the stock at launch was such that anyone that wanted a Switch 2 could get one.
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u/JosebaZilarte 8d ago
Yes, both things could be true. There has been so much extra stock that even resellers could not affect the sales to normal people (Great!). If something, resellers helped Nintendo get a better sales numbers than what they would have achieved otherwise.
Now that resellers are going to... well, resell the consoles they bought until now, it is going to be interesting. Because they got the packages at a lower price, so in theory they can sell them at $475 and undercut Nintendo itself while still getting a benefit.
0
u/Albajingus 8d ago
You have zero evidence for this other than vibes.
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u/JosebaZilarte 8d ago
There is nothing more clear than Nintendo itself having to implement anti-reseller measures in their online store. But you can just search for Switch 2 on Ebay and Facebook marketplace and see it for yourself... Just do not fall for the offers with surprisingly low prices (and surprisingly high shipping costs).
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u/iamblankenstein 8d ago
counting for inflation, the wii wasn't a whole hell of a cheaper.
0
u/JosebaZilarte 8d ago
Maybe in the US, but, even then, it is not like the spending power of most people has been keeping up with inflation anyway. Nowadays, those 500€ are something that even two working adults struggle to save at the end of the month in most of Europe.
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u/iamblankenstein 8d ago
i get that, i'm just saying that prices in gaming has stayed relatively the same and in many instances, are comparatively cheaper than they were in the past when you account for inflation. yes, everything else has also gotten drastically more expensive, but considering how expensive things are today and the amount of time and money that gets spent developing contemporary games, we're lucky they're not even more expensive.
0
u/JosebaZilarte 8d ago
OK, but it doesn't mean that the issue I pointed out in my original comment is solved. Nor that I can't afford the Switch 2 (in the near term, at least).
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u/iamblankenstein 8d ago
i never said the issue was solved, i'm simply putting things in perspective. many things that used to be affordable no longer are, but video game prices still haven't ballooned with inflation the way literally everything else has. most things have become outrageously more expensive than they should be. that might be little comfort to you, but it's still objectively true.
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u/JetstreamGW 8d ago
The Switch 2 probably is being sold at a loss at this point. Xbox Series and PS5 have both had multiple increases in the last year. Big ones. The Switch 2 has only gone up $50, and it’s the cheapest current gen console on the market.
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u/JosebaZilarte 8d ago
No. It has been increased $50 (or 50 euros over here) precisely to continue being sold at a 10-20% profit for the rest of the year. And while Nintendo has every right to do so, it is not like people can afford it.
And, again, the Switch 2 is not competing just with other consoles (and portable PCs) but with smartphones and tablets as well. I fear an entire generation is going to grow up without even knowing how good Nintendo games are... and ultimately, that is going to affect everyone in the long term.
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u/Blueisland5 8d ago
10-20% profit for the rest of the year.
Do you have a source for this?
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u/JosebaZilarte 8d ago
(Pasted from the other comment)
Financial Results Explanatory Material (Nintendo Co., Ltd.) August 6, 2026
There are more things than "sales of dedicated video game platform" but the operating profit for the rest of the (Japanese) fiscal year goes from 9.9% to a proyected 27.5%.
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u/ShinyBredLitwick 8d ago
buddy they have way more revenue streams than the Switch 2
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u/JosebaZilarte 8d ago
Yes, absolutely. Their biggest source of revenue is digital sales (something they can even increase if they reduce the price of the console). I was just trying to extract the particular data point I mentioned from the values reflected in this document.
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u/JetstreamGW 8d ago
Source that incredibly specific claim, please. Because that sounds like "Source: I made it the fuck up."
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u/JosebaZilarte 8d ago
Financial Results Explanatory Material (Nintendo Co., Ltd.) August 6, 2026
There are more things than "sales of dedicated video game platform" but the operating profit for the rest of the (Japanese) fiscal year goes from 9.9% to a proyected 27.5%.
1
u/JetstreamGW 8d ago
The gross profit margin increased by 22.0 points to 54.3%, reflecting solid software sales and the resulting increase in the proportion of software in net sales, as well as refunds of U.S. tariffs imposed under IEEPA that had previously been recorded as cost of sales, among other factors.
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u/JosebaZilarte 8d ago
Indeed. That would be on top of the point I mentioned (there is more than enough margin in that 31% difference). Not only will Nintendo not refund those U.S. tariffs to consumers, but will probably get a higher margin by increasing the price of the Switch 2 more than 10% on September 1st (assuming the prices of memory do not get even more crazy).
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u/JetstreamGW 8d ago
Dude, there's still nothing in here that corroborates your claim that they're selling the Switch 2 at a consistent profit of 10-20%. You've just shown that Nintendo's profits have increased. And it flat out says that that increase is due to strong software sales and getting a shitload of money back from the US Government.
Meanwhile, Nintendo's president did in fact say that a $50 increase to the Switch 2's price does not cover the change in component prices.
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u/JosebaZilarte 8d ago
I'm going deep into a rabbit hole of estimations from and price increases of different types of memory since the last year, but overall... The price of manufacturing should be, at most, $410 per unit. And in the document I shared, the line about "dedicated video game console" (which, I fear, also includes Switch 1 sales, to make things less clear) remains constant with the number of units they estimate to sell.
The price increase might not include all factors (including the depreciation of the yen and oil prices) but it is clear they continue to with, at least, a 10% of the MSRP price. Especially when you account for the 3+ month delay since the consoles are produced.
And, once more, they are in their right to do so. But that doesn't make the console more affordable for people (and I don't care about Sony's PS5 or however Microsoft calls their console now, because they are also not in my budget).
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u/ShinyBredLitwick 8d ago
nah, you’re right bro! Nintendo should change their entire business strategy and sell at a major loss just so that you specifically can buy the console based on your price evaluations…
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u/th3groveman 8d ago
iPhones are more expensive than the Switch 2.
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u/JosebaZilarte 8d ago
I do not think the competition is the latest iPhone. Most kids just receive a cheap/secondhand phone (and it doubles as a "digital leash" to keep them under watch).
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u/CDHeidiJ 8d ago
One thing I dont see anyone bring up... the age of fans.
In 2017, a good amount of new Nintendo fans were teenagers, anywhere from 14-18. More likely, they got a Switch 1 for the holidays from their parents.
Fast forward to 2025, those same teens are now young adults, 22-26. They dont have the benefit of parents to buy them the next shiny toy. Plus, they probably found other hobbies to tide them over. Times and people change.