Capitalism is incredibly complicated in practice - markets, financial tools, regulations, 'gaming the system', taxes and so on. On the flipside it's also very simple. Supply and demand dictate how much goods cost, and when it comes to entertainment desirability is also a factor. When a company has a winner on its hands it figures out the maximum it can charge people for that product so that it can make good profits, therefore satisfying investors who increase the company share value, and so on until the apocalypse comes and we forget about tax deductibles to fight over the last bottle of water.
With Nintendo, it's not always easy to figure out the economics. The 3DS had a poor second quarter in 2011 so the company introduced a major price cut; allied with some excellent game releases it worked to turn the portable's fortunes around. Nintendo never really bothered cutting the price of the Wii U, however, only doing a minor $50 drop after the system was already in a state of rigor mortis, and it remained oddly expensive. Retailers were stuck with Wii U consoles they couldn't sell, but few 'on the fence' consumers would have had any interest because they were still pricey compared to other more popular systems. That was an occasion when the market just did not work, and it was stuck in an odd loop of failure; the only occasions we saw Wii U sales spike was when a major retailer simply had enough and kicked off a fire sale.
When Nintendo unveiled the Switch in January I shared, on multiple occasions, concerns over the price; many others did too. Before the comments section fills with people going on about freebies for members of the press, I'll add that I did actually purchase a system, games, Pro Controller and SD card for launch (like many others reading this no doubt did) that ended up in the family, because everyone loved the idea and fancied having one. That's the remarkable thing so far about Switch; I've seen people with zero interest in Wii U become utterly enamoured with the thing - individuals that wouldn't read these pages but like fun times have remarked to me that the price of the system seems about right.
But good grief, it is expensive being a Switch owner. It's not so much the core system that gets you, but the extras. The Pro Controller costs a little more than the equivalent standalone pad for a rival system, and then most with plans to try cool eShop games need to eye up microSD cards.
There have also been games, too, that in 2-3 years would not be full-price retail games but - because it's a console launch - have been so far. You know of what games I speak, some already out and another (from Capcom, cough cough) on the way soon; titles that prompt heated debates over what should be a retail game and what shouldn't. Yet, the thing is, we're probably arguing about it because we always end up buying the darn things. We're answering our own debates. I argued before launch that 1-2-Switch or at least a 'starter' version should have been free with the system, but I bought a copy anyway - the following day I got 'mug' tattooed on my forehead.
More fool me, but my policy is to laugh about it, even if I'm in some kind of bizarre loop of self-mockery. The topic of Switch pricing has come up again recently with an empty box in Japan that'll cost about $5, and a standalone dock that costs £79.99 / $89.99USD. Hoho, ridiculous! But I do like that box...
Is the dock $90 worth of product in a $299.99 Switch console? That's debatable, so let's break it down with standard US dollar prices for the standalone accessories, and then see what's left.
- Nintendo Switch Joy-Con set (no grip included) - $79.99
- Nintendo Switch Dock Set (includes AC adapter and HDMI cable) - $89.99
Those combined come to $169.98US. In the console box you also get a non-charging Joy-Con grip - the charging equivalent is $29.99USD. Let's be generous and price a non-charging Joy-Con Grip accessory at $14.99 (I know it's not a thing, but it helps in this case) and round up to say that everything in the Switch box, minus the console itself, is $184.99 at 'accessory' costs. That prices the tablet at about $115.
When you write it all down it's not quite as obscene as it may first seem, and there are defences for some of the prices. The Joy-Con are clever little controllers, plus the Pro Controller is steep at about $70USD but does support all the Joy-Con capabilities of motion controls, HD Rumble and NFC (amiibo) scanning. Premium prices for sure, but not too bad when you remember they're optional extras. Out of the box with a Switch console you have multiplayer control options and a conventional-ish controller option with the pack-in Grip or (of course) the portable mode; Nintendo isn't forcing us to splash out on Pro Controllers.
It's also worth noting that the latest NVIDIA Shield (which uses either the same or a near-identical Tegra X1 GPU) is $199.99 with 16GB memory or $299.99 with 500GB of memory. That model isn't a tablet but rather a micro-console / streaming gadget for your TV (with a Remote and gamepad also in the box), though of course Switch only offers 32GB of internal memory. The point is that when you factor in that Switch tablet form and portability, the included Joy-Con, the 'switch' concept delivered by the dock and other bits and bobs in the box, the price does make some sense.
I would argue, unlike the controllers, that the pricing on extra docks is nevertheless bordering on being a tad cheeky; some of our team are less generous in their thoughts on it, reckoning that it's outright price gouging. Yes, there are R&D legacy costs, and an AC adapter + HDMI cable are included, but you're paying quite a lot for a plastic dock with a few standard connectors and that little bespoke circuit board that does a lot of the hard work. It's clever and neat technology, but that price is pretty steep.
The business logic behind that dock pricing is two-fold - first is the point we've highlighted already, that early-adopters pay the brunt of what the market accepts; Nintendo, like every other technology company, puts prices as high as it thinks early consumers will tolerate. After all, look at the prices of accessories and add-ons for trendy smart devices like iPhones. Another factor is that a cheap dock would 'discourage' people from buying an extra console. With the current dock price the temptation is to say 'sod it' and go all-in on another console for the household. I've written before about how Nintendo will want to recreate the '3DS household' effect in order to achieve big sales numbers for Switch in the long term.
But that's Switchonomics. While it's in demand and popular it'll command premium prices, and they'll only change if the consumer base decides the costs are too high. It takes me back to the Wii days, when accessories were eye-wateringly expensive considering the simple, off-the-shelf technology being utilised. That was and remains a secret to Nintendo's business, however - it takes affordable technology and sprinkles it with innovation and bit of fairy dust. Do that, and you have accessories that drain bank accounts.
Don't worry, Nintendo, I can just have bread and water this week while I save up for that extra dock.