Nintendo won’t fall behind when Microsoft’s Project Scarlett and Sony’s PlayStation 5 arrive in 2020.
The new Switch models are in production, according to the Wall Street Journal. Surprisingly, Nintendo isn’t doing so in China. It relocated production to Southeast Asia in an effort to avoid potential tariffs from the United States. The U.S. and China are locked into a trade war that may result in an important tax rate as high as 25% on electronics.
Hardware, especially in the video game industry, already offers up a low margin. In fact, most consoles don’t turn a profit for their makers; therefore, tariffs would lead Nintendo to lose even more money on each unit. The money-making ability largely falls on games and services.
As for anything else about the actual hardware, the report didn’t lay out details. But the new Switch models are likely going to arrive on both sides of the existing model. Nintendo’s apparently working on high-end and low-end versions to target different consumers. While the high-end model could resemble the current Switch but swap out for upgraded components, the low-end model might feature non-removable Joy-Con controllers.
Nintendo didn’t talk about new Switch models at E3 2019. It’s unclear if an announcement will come this summer, or maybe everything will be set in motion next year.
