Nintendo reportedly makes almost no profit on each Switch 2 console

The Nintendo Switch 2, priced at $450, has been in the spotlight since its detailed reveal in early April. However, a recent rumor has taken the gaming community by surprise, claiming that Nintendo is making almost no profit—or possibly even zero—on each unit sold in the early phase.

The buzz originated from content creator Nintendo Prime on social media platform X (formerly Twitter). Initially, he claimed Nintendo earned only "$4" per Switch 2 unit, a surprisingly low margin for a $450 product.

Later, Nintendo Prime clarified in the comments that the $4 figure referred to the retailer's profit margin, while Nintendo itself is selling the console nearly at production cost, making “no profit” from the hardware sales.

This claim appears to be supported by Double Jump Games, a U.S. retailer. Upon reviewing an order of 9 Switch 2 consoles, they concluded that Nintendo’s profit margin per unit in the U.S. is “virtually zero.”

Selling hardware at a loss or minimal profit at launch is not uncommon in the gaming industry. It's a typical business model where companies sacrifice initial hardware profits to rapidly build a large user base. The main revenue then comes from selling exclusive games (first-party) and collecting royalties from third-party developers—both of which offer much higher profit margins. Sony’s PlayStation 5 followed a similar path and only began turning a profit after production costs dropped over time.

So, while the rumor that Nintendo earns nothing from Switch 2 sales may be shocking at first glance, it aligns well with standard console business strategies. Nintendo is still expected to reap substantial profits from its blockbuster games. Over time, as production costs decrease, selling the Switch 2 will likely become profitable.

The Nintendo Switch 2 is on the horizon, promising exciting upgrades and new possibilities. But you don't have to wait to jump into the world of Nintendo magic. The original Nintendo Switch still delivers everything fans love—versatile play, a massive game library, and iconic titles that never get old. As always, for the latest news on hardware launches and industry developments, be sure to follow our dedicated hardware coverage.