Nintendo is expecting the Switch to make them a lot of money, as they’re forecasting a hefty profit of $585 million for their next fiscal year. That’s pretty impressive, but Nintendo isn’t the only company set to profit from the new console. Nvidia, who provides the heavily customized Tegra X1 chip at the heart of the Nintendo Switch, may make almost as much cash from the console as The Big N itself.
According to RBC Capital Markets analyst Mike Stevers, Nvidia could rake in $300 to $400 million from the Nintendo Switch during this current fiscal year (which ends on March 31, 2018). This is based on recent reports that Nintendo was doubling their Switch production plan to 16 million units.
Here’s Stevers direct quote, for those who are into financial speak:
“We think the [increase in production] of 6 to 8M units could add $300-400M to [Nvidia’s] top line. This is a notable metric given that the Wii U sold less than 13.5M units since its release in 2012 and 10M+ in the first 12 months are unlikely reflected in current estimates.”
Will Nintendo actually be able to see those 16 million Switches they’re building? Doesn’t matter to Nvidia! The chip maker gets paid in advance for all their Switch-powering tech, so those 16 million systems are pretty much money in the bank for the company. If Switch sales end up stalling, we could end up with a situation where Nvidia makes more money on the system than Nintendo does, although that’s unlikely.
Both the Xbox One and PS4 use similar AMD-manufactured x86 processors, so many were surprised when Nintendo ultimately went with a Nvidia chip for their new system. Ultimately though, the move seems to have benefitted both companies. The Nintendo Switch is an impressively powerful, energy efficient system for its size, and Nvidia is back in the console game, making fat stacks of cash. Win-win!
You can check out all WWG’s extensive Nintendo Switch coverage, right here.
[via Yahoo! Finance]