

Nintendo makes a profit on every Wii sold from day one - ConradHex
http://www.gamespot.com/news/6157690.html

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dazzawazza
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.

~~~
run4yourlives
>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.

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kirse
Is this incorrect?
[http://www.google.com/search?hl=en&q=1+Canadian+Dollars+...](http://www.google.com/search?hl=en&q=1+Canadian+Dollars+in+US+Dollars&btnG=Google+Search)

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.

~~~
easyfrag
yes it is at now par, but it wasn't always:
[http://finance.yahoo.com/currency/convert?from=CAD&to=US...](http://finance.yahoo.com/currency/convert?from=CAD&to=USD&amt=1&t=5y)

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ConradHex
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.

~~~
jonknee
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.

~~~
axod
Scalability problems are not just for the web :)

~~~
jonknee
Correct, but with billions of dollars at stake it seems like they should have
been able to figure it out. They made almost $5 billion in cash last year.
This isn't a little startup trying to do something scrappy. If I was an exec I
would be concerned why my company can't figure out how to make enough widgets
1.5 years after launch.

~~~
sachinag
I submit that they're meeting demand precisely. They still are winning the
sales wars, in all markets, every month. The idea of a "shortage" is a myth.

Plus, they're being smart and shipping units to Europe instead of here, given
that they make more yen on the forex.

~~~
jonknee
Every time I walk by the Wii shelf at Target it's empty. They sell for more
than retail on eBay (and being bid on heavily). Demand isn't being met.

~~~
Goronmon
But is meeting demand 100% always the best goal to have? An increase in
production is an increase in cost. Spending $10 million to sell 1 million
units over 2 months is better than spending $20 million to sell 1 million
units one month and 500k units the next.

~~~
jonknee
Without knowing the actual costs, it's impossible to answer. Usually consumer
electronics get cheaper when you make more of them.

I would have bought one if not two (for a gift) if they were available. Now
I'm not buying any. They not only lose out on the unit sale, but all
subsequent accessory and software sales. So even if making an extra 500k per
month cost them marginally, they have 500k more possible sales for all their
Wii software and accessories.

I don't really care that much, it's just the first time I can remember this
happening in CE. Companies usually wake up and fix supply issues. Nintendo of
America is as confused as I am:

[http://www.joystiq.com/2008/04/24/nintendo-of-america-
passio...](http://www.joystiq.com/2008/04/24/nintendo-of-america-passionately-
upset-about-wii-supply/)

~~~
axod
Yeah but they're selling them here (In europe) for a lot more cash instead.

~~~
jonknee
Then raise the price. They are selling higher than list on eBay still, which
shows things aren't quite balanced.

~~~
jcl
Perhaps Nintendo believes that if people think the Wii is cheap but scarce,
then they will be more likely to buy at the earliest opportunity -- unlike the
PS3 or 360, which can be picked up at any time?

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sant0sk1
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
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...](http://www.destructoid.com/wii-owners-bought-8-games-per-system-in-
december-67294.phtml)

