From previous reports, we know that two new Nintendo Switch models may appear, possibly already this year. Nintendo did not officially consider the possibility, although it stated that it would not announce new systems during E3. This turned out to be true, but the new report from The Wall Street Journal, published this week during E3 2019, reveals some new details of these rumors about the new Switch models. In particular, the report states that Nintendo decided to move the production of new consoles to Southeast Asia, and not to China. This is a result of concerns about potential US electronics tariffs made in China.
As we reported earlier, a 25 percent import tax rate proposed by President Trump will affect gaming consoles, as well as smartphones and computers. Theoretically, this could lead to higher prices for game consoles – from Nintendo, as well as from Microsoft and Sony – because companies shift the costs to consumers. (An alternative would be to incur costs.)
Historically, game consoles are not the place where money is earned in the gaming business. Often, systems are sold at a loss or with very little profit, and the profit comes from software and services.
If the 25 percent tariff comes into effect for Switch consoles shipped to the United States, it will affect how much money Nintendo and other companies earn on console sales. However, Nintendo has become a leader in this field, since the company has been claiming from the first day Switch sales in 2017 earns on each sold console,
If the 25 percent tariff comes into effect, this may affect the Switch's profit profile, and probably this is why Nintendo decided to move the console production outside of China.
According to the WSJ report, Nintendo has already moved production of the existing Switch model, as well as two new ones, according to rumors, to Southeast Asia. As for the new systems, they say that one has a form factor similar to the existing model, but has better components, and the other should have a different appearance and lower characteristics, which will make it less expensive. According to the WSJ, given that the systems are now in production, they may soon appear.
Nintendo declined to comment on the report as WSJ approached.
It is unclear when Nintendo can announce the new Switch models, if they are truly real. This week, the Direct conference did not discuss new hardware, so Nintendo made a series of software announcements, including The Witcher 3 for the Nintendo Switch and the sequel to The Legend of Zelda: Breath of the Wild.
Nintendo has a long history of offering revised models of its gaming equipment, especially in the field of portable devices. According to rumors, the new systems will not be a new generation of Switch hardware, but simply improved or improved versions of what is already on the market.
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