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Update: Nintendo has issued the below statement in response to claims it will be making more profit from the OLED Switch than the regular model. The company has denied that the profit margin will be increased.
Original story: The OLED model of the Nintendo Switch will cost $50 more than a regular version of the console, but the upgraded version only costs $10 to manufacture.
After months of rumors and speculation, Nintendo finally caved and revealed that it has indeed been working on a new Switch. However, it wasn't the high-powered, 4K-ready console most people were expecting. The OLED model has a bigger and better screen and that's about it. Well, that isn't it, but other than the improved screen and a LAN port, the OLED Switch isn't that different from a regular one.
That won't stop Nintendo from charging more for it, and rightly so. The changes might be minimal but they are still there, and the OLED model will cost more to make than a normal Switch. Probably not as much as you might think, though. According to Bloomberg, each OLED Switch produced is only going to cost Nintendo an additional $10. However, the OLED model retails at $350, a $50 increase on the base model.
Thus begins the argument over whether Nintendo is right to demand a higher price or not. It will already be making a tidy profit selling Switch consoles and a lot of it. The Switch recently surpassed the lifetime sales of the Xbox 360 and is quickly working towards that 100 million units sold milestone. Since the OLED Switch will sell for $350 but only cost $10 more to make, it will be making that same profit plus $40 more with each sale.
Those riled up by the reveal that the OLED Switch costs pretty much the same amount of money to make as a normal one are the same people annoyed by the new Switch's lack of power. It's hardly the mid-generation upgrade that PlayStation and Xbox consoles tend to receive. However, Nintendo has said since that it is always working on new hardware, which might mean a better Switch is still in the works.
On the flip side, some experts believe Nintendo is right to charge $350 for the OLED Switch. Analyst Michael Pachter believes (via GameSpot) Nintendo wouldn't be charging the higher price unless it knew the console will sell for that price. Pachter points out that most people use their Switch as a handheld console, so the bigger OLED screen alone will be worth the additional $50 for a lot of people considering upgrading when the new Switch launches this October.