Analyst suspects Wii manufacturing costs are down 45%

Since the Wii released in November of 2006, it's progressively become a more profitable venture for Nintendo. Not just because it has been constantly flying off retail shelves, but because Nintendo has managed to drastically cut down manufacturing costs during its life, Koya Tabata of Credit Suisse suspects. In fact, Tabata says costs are down a whopping 45%, which could mean Nintendo is banking much more than the previously reported $6.

Of course, any talk of reduced manufacturing costs is inevitably going to lead to talk of a price cut, which Tabata says is a real possibility. Emerging markets could be the first to see a price cut, Tabata commented. With Sony hoping to take market share away from Wii with its $99 PS2, it might be the right time for Nintendo to trim some fat.

http://www.joystiq.com/2009/04/07/analy ... ce-launch/

Except for the fact that they've just stuck the price UP, and the fact that the Wii is going to piss all over the PS2 at this juncture in it's lifespan - most publishers have surely already wrapped up their PS2 development.

I can't see a price drop again. But maybe a bundle of some sort, be that to include Wii Fit, or perhaps Motionplus controllers, or just some more software.

Also, $6? Typo?

How much do you think it makes, then?

Id hazard $60-70 on each Wii sold at this point. Nintendo already had a billion dollar warchest at the start of this generation but instead of beating their chest and yelling about who had the biggest todger (which the fanboys so desperately wanted) they became friendlier to people who never played games and the rest is history.

Most of Nintendos $$$ goes into R&D. They just built a new building just for this and after seeing the touchscreen GBA at GDC and hearing Aomuna talk about how they expetimented with a 1st-person view on twilight princess and that motionplus is TOO good who knows what crazy sh*t they have going on.

Only a fool would think they have ran out of ideas and are just sitting on a Scrooge McDuck pile of Cash made on minigame collections

Carlos wrote:Id hazard $60-70 on each Wii sold at this point. Nintendo already had a billion dollar warchest at the start of this generation but instead of beating their chest and yelling about who had the biggest todger (which the fanboys so desperately wanted) they became friendlier to people who never played games and the rest is history.

Most of Nintendos $$$ goes into R&D. They just built a new building just for this and after seeing the touchscreen GBA at GDC and hearing Aomuna talk about how they expetimented with a 1st-person view on twilight princess and that motionplus is TOO good who knows what crazy sh*t they have going on.

Only a fool would think they have ran out of ideas and are just sitting on a Scrooge McDuck pile of Cash made on minigame collections

They were making money on Gamecube from day one and the Wii is only a bit more advanced than that. They will be making close to 90% profit and by the end of the year I'd say they will be making 100% on each unit sold, unless they bundled Motion plus into each hardware bundle.

suzzopher wrote:They were making money on Gamecube from day one and the Wii is only a bit more advanced than that. They will be making close to 90% profit and by the end of the year I'd say they will be making 100% on each unit sold, unless they bundled Motion plus into each hardware bundle.

Excuse me? 100% profit? So the Wii will then cost... nothing to make, literally?

JayGo wrote:
suzzopher wrote:They were making money on Gamecube from day one and the Wii is only a bit more advanced than that. They will be making close to 90% profit and by the end of the year I'd say they will be making 100% on each unit sold, unless they bundled Motion plus into each hardware bundle.

Excuse me? 100% profit? So the Wii will then cost... nothing to make, literally?

They will be selling it at such a premium that the costs will actually be very small. 100% is exaggeration but they will be they will selling the machine at an even more ridiculous high price than they are already.

JayGo wrote:
suzzopher wrote:They were making money on Gamecube from day one and the Wii is only a bit more advanced than that. They will be making close to 90% profit and by the end of the year I'd say they will be making 100% on each unit sold, unless they bundled Motion plus into each hardware bundle.

Excuse me? 100% profit? So the Wii will then cost... nothing to make, literally?

Well let's have a look shall we.

The alleged original cost of the Wii was $196 and manufacturing costs accounted for $158 of that amount. If we reduce those manufacturing costs by 45% and assume that the other costs (shipping etc) are the same then it costs Nintendo $141 to get each Wii on store shelves. The Wii retail price in the USA is $250 so currently Nintendo are making a 77% profit on each Wii sold and that may be much more in other countries like here in the UK where the retail price is much higher.

I don't think it's that far-fetched an idea that Nintendo will be making 100% profit on the Wii in the very near future and possibly right now in many countries.

A 45% drop in Wii manufacturing cost, using the current Yen-Dollar exchange rate, means that Wii costs no more than $137.50 to make, even though the system sells at $250 (25,000 Yen) in Japan. Nintendo has always sold the Wii at a slight profit, so it is likely the system costs even less than that to make.

If that is true:

they make $112.50 per wii sold in Japan :lol:

After Reading a few things on the internet when the Wii launched they were making apprently $40 per machine if that stayed the same they would have already made 2billion on Wii consoles sales alone which is staggering in the same time Sony have probably lost that amount.

I could see Nintendo releasing the Wii at £199 with the upcoming Wii Sports Resort + the new motionplus device which goes with the wiimote, plus all the other accessories as standard.

Don't the retailers take about 15-20% as well? And when you take out the cost of marketing (which maybe included in the overall manufacturing costs) It's more likely to be under a $100.Which is still a load of cash and with the DS + games even more.

It must be around the same with the PS2/PSP as well.

randomguy wrote:
JayGo wrote:
suzzopher wrote:They were making money on Gamecube from day one and the Wii is only a bit more advanced than that. They will be making close to 90% profit and by the end of the year I'd say they will be making 100% on each unit sold, unless they bundled Motion plus into each hardware bundle.

Excuse me? 100% profit? So the Wii will then cost... nothing to make, literally?

Well let's have a look shall we.

The alleged original cost of the Wii was $196 and manufacturing costs accounted for $158 of that amount. If we reduce those manufacturing costs by 45% and assume that the other costs (shipping etc) are the same then it costs Nintendo $141 to get each Wii on store shelves. The Wii retail price in the USA is $250 so currently Nintendo are making a 77% profit on each Wii sold and that may be much more in other countries like here in the UK where the retail price is much higher.

I don't think it's that far-fetched an idea that Nintendo will be making 100% profit on the Wii in the very near future and possibly right now in many countries.

I think Jay was assuming the 100% was the percentage of the selling price that Nintendo kept as profit, which of course means that all other costs would be zero. With your prediction, from the $250 price and $141 cost, the profit is 44% of the selling price.

http://www.joystiq.com/2008/12/01/forbe ... -wii-sold/

That's the link suggesting that they only make $6.

Sounds totally ridiculous to me, it's eight year old tech!

Shadow wrote:http://www.joystiq.com/2008/12/01/forbes-nintendo-making-6-profit-on-every-wii-sold/

That's the link suggesting that they only make $6.

Sounds totally ridiculous to me, it's eight year old tech!

Bullshit is it only $6 :lol:

Analyst suspects Wii manufacturing costs are down 45%

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