Back when Nintendo's Wii launched, we heard a lot of talk about how the Wii hardware was actually profitable. That's something that the other guys couldn't say. From all of the bragging, I always figured that there were making more than $6. I guess that's still a pretty good figure, though. My dad always said that if you managed to pay all of your bills and still have money left over, you're doing pretty well for yourself, regardless of how much you have left. In other words, $6 is better than nothing.
This Forbes article says that Nintendo's strategy is to buy inexpensive components rather than make them in-house. This has them actually making money on console sales, unlike Sony. David Gibson, an analyst at Macquarie Securities, says that Nintendo earns $6 of operating profit with each sale.
Add on top of that that Nintendo also sells 60% of Wii games itself, compared with 30% for Microsoft and 15% for Sony, and that Nintendo has a higher gross margin on game software than the others at 65%, compared with between 50% and 60%, and it becomes clear that Nintendo is making cash.
Dale North is Destructoid's Editor-In-Chief, a founding editor, and specialist in Japanese gaming. An accomplished musician, Dale was reporting from Japan during the earthquakes of 2011. Luckily, he got the fuck out alive and is home in America now with his wife and beloved corgi, Einstein. Dale is also a co-founder of Destructoid's sister anime site
Japanator. Likes Corgis, Sega Saturn, PSP, iPhone, Photographic tools.
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Contest:
4:23 PM on 12.01.2008
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So we're seeing a slight stunt of console tech for Nintendo consoles, at a per unit profit of just $6? I guess when the other guy is losing money on each console sold that's something . ..
I mean, when you add it up, that's millions of six dollars.
But still. I had in my non scientific mind a profit of like $50 at least.
Business is funny.
I think Nintendo makes more money on nunchucks (+broken) than sold consoles.
Also, there's no way they're only making $6 off of each console at this point. I'd say they're probably around $50 per at this point.
Looks like it's time for a price cut to me. Unfortunately, the rest of the consuming public is perfectly fine to pay $250 bucks plus to play a system for a few hours a month and forget about it the rest of the time.
Nintendo did sell the console for $200 at launch; in Japan. Wii Sports was not included with the console in Japan, and as such the console was released at the price equivalent of $200 US dollars, which has always been the estimated manufacturing cost of the console. In early 2007 a Japanese magazine/site printed an analysis of the console's components and figured that with all things factored, a wholesale Wii costs roughly $195 to produce
http://i35.tinypic.com/v4aqsn.jpg
'nuff said
Regardless, considering how many Wiis they sell, that's still a hell of a lot of money.
Wii has sold over 24M Wii consoles to date.
LOL
I would think they make more than that...
No way in hell their profit is a mere $6, even at launch. One analyst pegged the cost of the CPU at $6, and I believe that.
no one is swimming in that picture.