Bloomberg has published a report, claiming that Japanese retailers are making higher profit margins off Nintendo Switch 2 consoles.

The article claimed that retailers in Japan have about a 5% profit margin on Nintendo Switch consoles in Japan, higher than the 2% industry average for hardware. While Bloomberg didn’t say how much the profit margin exactly was for Nintendo Switch 2, several of their sources claimed that it’s higher than margins for past consoles.

Bloomberg says this higher margin gives retailers the incentive to maximize shelf space for Nintendo products, effectively promoting them to customers.

It’s worth noting that for decades, video game consoles have been a loss leader for most retailers after taking into account transaction fees and other expenses, and they make profits by selling the hardware together with more profitable products, such as games and accessories.

Bloomberg said that this higher margin could help retailers make a profit off the console and stave off discontent from retailers unhappy about dedicating storage space for “unprofitable consoles”, considering that digital game sales has been increasing and margins on accessories have been dropping in recent years.

Nintendo has denied the contents of Bloomberg’s report, saying that the company does not share information on business conditions with distribution and retail partners:

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