Nintendo Switch 2 Will Be a Smash Hit, Says Analyst; High Retail Prices Are Meant to Drive Digital Sales
wccftech.com
It's time for the first analyst reactions to the Nintendo Switch 2 announcements, starting with the higher-than-expected pricing for both the console itself and its games. According to MIDiA Research's Rhys Elliott, whom we often interviewed exclusively on Wccftech, the console is poised to become a smash hit even at the $450 price.The Nintendo Switch 2 is slightly more expensive than many of us analysts thought, but $450 is still within the $400-500 price range I expected. While I still reckon $400 is the sweet spot, and we'll see a cheaper SKU eventually, $450 is still affordable and in line with other consoles and the Steam Deck.Unlike other manufacturers, Nintendo relies almost solely on its console and console software business, so loss-leading pricing simply wasnt in the cards. At $450, the Switch 2 is still cheap enough for mass-market adoption, and given the stacked and diverse software lineup, I believe it will sell well among core gamers, casuals, families, and more.Perhaps an even tougher pill to swallow for consumers is the increase in Nintendo Switch 2 game prices, chiefly Mario Kart World, which will cost $80 (90 in Europe) if you buy a physical copy. According to Elliott, the rationale is mainly to drive users to purchase digital instead, since Nintendo's split is currently around fifty-fifty (whereas the other consoles made by Microsoft and Sony already skew much more toward digital sales).While the orange mans tariffs and Nintendo wanting to increase ARPPU factor into the reasoning behind Nintendo charging $80 for Mario Kart World, I think theres more at play. Nintendo also wants to nudge consumers to buy games digitally. The lower prices for digital games versus boxed (true for Donkey Kong and Mario Kart) point to this. Another factor is last weeks announcement of the Digital Game Card, which lets players lend games to their Switch Online Family Plan members.A little bit of context here: PlayStation and Xbox have already pushed their platforms to become digital-first, driven by strategies like multi-game subscriptions, digital-only consoles, free-to-plays rise, and platform holders pushing consumers to digital versions via perks (like extra cosmetics and the ability to pre-load a game so its instantly ready to play at launch). So PlayStation and especially Xbox are very digital-first. But Nintendo is different, more 50-50. For consumers, a unique value proposition of physical games is the preowned and rental markets. But Nintendos reliance on physical impacts its bottom line, hence the nudging. Nintendo does not gain revenues from physical renting and resales. After all, a copy of Mario Kart 8 Deluxe could be sold on the reseller market 100 times or rented 100 times, but Nintendo would only capture revenues from that first sale. A digital-only market means more revenue and price control for Nintendo. Long story short, Nintendos use of framing (sticker shock for physical) is actually pushing people to digital, which benefits Nintendo.Are you planning to pre-order a Nintendo Switch 2 when pre-orders open on April 9? Vote in the poll below and let us know your take on the reveal in the comments section.Are you going to buy the Nintendo Switch 2?Deal of the Day
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