News Article

Wii Manufacturing Cost Reduced by 45%

Posted by Eric O

These are tough times for many people, but apparently not for Nintendo.

According to Credit Suisse analyst Koya Tabata, the cost of manufacturing a Wii console has gone down by 45%. If this number is accurate, that would mean each Wii sold is bringing in nearly twice the profit as in previous years.

And yes, the Wii most definitely brings in profit per sale, around $6 USD each actually. If you take into consideration exactly how many Wiis have been sold worldwide, which is estimated to have just hit 50 million(!), the number can be quite staggering.

It's probably safe to say that Nintendo is not feeling the same financial pressures that other companies are in these trying times, so you have to wonder exactly why the company is putting up the trade cost of the console in the UK.

Maybe Nintendo just doesn't like the British?

[via kotaku.com]

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User Comments (10)

motang

#1

motang said:

Big N should do a price drop and bring the Wii down to $200 USD consider they got outsold by the PS3.

KDR_11k

#2

KDR_11k said:

I doubt they're only making twice the profit, halving the costs would give an even bigger profit increase (not in absolute numbers but in relative ones). At 6$ per sale profit initially and assuming ~200$ make it to Nintendo a 45% reduction in costs would reduce the costs from 194$ to 107$, giving a profit of 93$ per unit.

Gizmo

#3

Gizmo said:

"According to Credit Suisse analyst Koya Tabata"

All right, and how can he know this?

I mean, he is an analyst...

"And yes, the Wii most definitely brings in profit per sale, around $6 USD each actually."

Oh, surprise, this is from another analyst...

The problem is that your news present the last statement as a fact, but it isn't.

MickEiA

#4

MickEiA said:

because of the extra money nintendo should throw some money at microsoft and activision so goldeneye is released

Viral

#6

Viral said:

I'm not bothered. The software (games) are cheaper and cheaper. NEVER pre-order...I've learned my lesson. I preordered a game and then decided not to get it later on...it would've cost me 29.99 for Madworld, it's on sale on Amazon for 17.99...sad huh?

Golgo

#7

Golgo said:

I wouldn't blame Nintendo for not liking the British. I hate the bastards, and I'm one of 'em.

Starwolf_UK

#8

Starwolf_UK said:

And yes, the Wii most definitely brings in profit per sale, around $6 USD each actually.
I doubt that analyst is right when you consider the parts cost was about $100 at launch.

It is a shame Nintenod has to take the cake and eat it so to speak and has to up the price in the UK (hurting an already wounded retail even more).

XCWarrior

#9

XCWarrior said:

@Starwolf That was more than just an analyst, it was some research done or whatever, though I thought the number was a bit closer to $10.

Either way, so that means they are making, what $100 per system then? I mean if it cost say $235 to make before, 45% of that is $105.75. That's some serious profit to be putting into Wii Fit Plus and Wii Music 2!

Don't we all wish I was kidding....

dagreenone

#10

dagreenone said:

Nintendo is not making as much profits as you guys are thinking. The Yen is a much stronger than the weak American dollar. From the launch in December 2006 to December 2008, the value of the pound fell by 43 percent against the yen, and, in the same period of time, the U.S. dollar and euro fell against the British pound 22 and 18 percent, respectively. In other words, while Nintendo is keeping their console steady at $250 they have actually been making less money thanks to US inflation.

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