Nintendo makes a profit on every Wii sold from day one

http://www.gamespot.com/news/6157690.html

by ConradHex • 18 years ago

17 30 18 years ago

ConradHex• 18 years ago

I know this is an old article, but I think it's interesting in contrast to the admission by Sony in their annual report that they've lost $3 billion selling PS3s.

The Nintendo business model makes a lot more sense to me.

jonknee5• 18 years ago

Except the part about (possibly artificially) not having enough supply for an absurd amount of time. You can only sell software to people with the hardware, it makes sense to get the hardware out there.

axod5• 18 years ago

Scalability problems are not just for the web :)

Goronmon3• 18 years ago

I think this comes back to Nintendo trying to avoid risk. Similar to how they don't want to sell the hardware at a loss, they want to make damn sure that the production facilities producing the hardware are worth the cost in the long term.

They probably figure that the money lost due to not quite meeting demand is less than the risk to ramping up production to meet demand that may drop sharply over the course of a year or two. And it's not like starting up a production facility is a small task.

biohacker42• 18 years ago

Yes, but you can't ramp up manufacturing so easily. And the weakness of the us dollar drove all available Wiis to Europe.

No puns were intended in writing the above. Damn Nintendo's Wii!

mattmaroon• 18 years ago

Well, the problem is manufacturing facilities don't scale smoothly. They probably thought that building another one would give them way more production capability than they really needed, and end up costing them a fortune.

They were clearly unprepared for having the top two systems at the same time.

sant0sk1• 18 years ago

I've heard Nintendo is having problems moving software titles for the Wii because so many people are content playing Wii Sports.

Can this be validated by actual data or am I just rumor-mongering?

msg• 18 years ago

The picture is changing quickly. In the fall there was an article about attach rate. It was something like 7 games per Xbox, 5 games per Wii and PS3. In December, Wii outsold Xbox 8 to 7 (I had to read the statistic twice because it's 8 games per system _sold that month_, not 8 per system in existence).

http://www.destructoid.com/wii-owners-bought-8-games-per-sys...

akd• 18 years ago

Haha, I can see that. My friend has 10 or 15 Wii games but all we play is Wii Tennis :)

dazzawazza• 18 years ago

This is an old article but it's a long held Nintendo policy. They took the same route for the Gamecube and N64. The N64 really suffered as nintendo chose RAMBUS ram which rose in price near fabrication and they had to halved the memory to 'make money on day one'.

Because the Wii is largely an upgraded NGC it was easy to make money from day one as hardware R'n'D costs were a lot lower.

If you live in North America then there is a shortage of Wii's because the dollar is weak and Nintendo can make more money in Europe. Europe recently passed N. America in terms of number of gamers and money spent on games so I don't see this 'shortage' issue changing for quite a while.

Having said all that Sony are not in a bad position either. the PS2 and PSP are still selling stong. the PSP has recently picked up in N America and Japan (more then just the latest Final Fantasy can explain) and PS3 will continue to be refined to make it cheaper and more reliable.

run4yourlives3• 18 years ago

>If you live in North America then there is a shortage of Wii's because the dollar is weak and Nintendo can make more money in Europe.

North America != USA. In Canada, not only is our dollar not weak, we have plenty of Wiis to go around.

kirse• 18 years ago

Is this incorrect? http://www.google.com/search?hl=en&q=1+Canadian+Dollars+...

Or am I misunderstanding that your currency has approximately the same buying power as ours?

Also, I bought 5 Wiis and resold them the day after Christmas last year. For the smart consumer, they're not in short supply.

Nintendo makes a profit on every Wii sold from day one

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