| superchunk said: In this instance, no. The retialer paid a price per console. Nintendo has that money... its the same to them eitherway. This is costco either doing their own promotion or simply clearing stock. |
Well then how does Nintendo lose 21$ on every Wii U we purchase if they already sold it to the seller?
NintendoPie said:
Well then how does Nintendo lose 21$ on every Wii U we purchase if they already sold it to the seller? |
To Nintendo.. sold and the $21 loss is based on their negotiated price with the retailer, not what the consumer pays.
Nintendo sells a wiiu deluxe to walmart for $340. It costs Nintendo $361 to make and distribute the console. THey lose $21.
Walmart then sells the console for $350 and makes $10 on it before their own expenses are taken out. Walmart decides to do a promtion on their own to drive sales, they sell the console for $300. Walmart still paid $340 and is now losing $40 per console. However, the greater majority of purchasers use that savings to buy controllers, games, books, clothes, groceries, condoms, lube, etc and Walmart overall makes a shit-ton.
The MSRP is not what a retailer pays. Its just hte suggest price the company wants the retialer to use that accounts for the retailers profit or margin above what teh company is selling the product to the retailer for.
The difference would be if it were a full sale initiated by Nintendo where they gave a reduced price to all retailers and thus told them to reduce the MSRP to some lower price as well. This in fact wouldn't affect the retailers as their margin remains the same but Nintendo is simply making less. In this case since its only Costco, its like a costco initiated thing.
| superchunk said: To Nintendo.. sold and the $21 loss is based on their negotiated price with the retailer, not what the consumer pays. Nintendo sells a wiiu deluxe to walmart for $340. It costs Nintendo $361 to make and distribute the console. THey lose $21. The MSRP is not what a retailer pays. Its just hte suggest price the company wants the retialer to use that accounts for the retailers profit or margin above what teh company is selling the product to the retailer for.
The difference would be if it were a full sale initiated by Nintendo where they gave a reduced price to all retailers and thus told them to reduce the MSRP to some lower price as well. This in fact wouldn't affect the retailers as their margin remains the same but Nintendo is simply making less. In this case since its only Costco, its like a costco initiated thing. |
Ah, that makes a lot more sense. Thanks, SuperChunk!
everytime i think it can't get worse i read crazy calculated articles like this.
operating loss of the whole company : sold wii u = loss per wii u wtf?
well, i got a deluxe and two games. NSMB and Batman, so hopefully I could help them recoup some of their losses 
oh, and i got trine 2!!!
| superchunk said: They have a logic error as the deluxe model and base model will have different costs and thus different profit losses. But to stay with this general lump sum.... So, they are likely making money on most people. I bought deluxe WiiU at a $21 loss. I got NSMBU for free via a promotion with Old Navy. Probably no loss or profit for N as ON likely paid a discounted rate around the cost of the title as it was part of their marketing budget. I bought ZombiU for $60. I bought CODBLOPS2 for $60. I bought a pro controller for $50. I bought Skylanders for $60. I bought Trine2 for $15. I bought two nunchuks as replacements for broken stuff for $40. So the only first party stuff I bought that made them any money was the controllers. That surely made up the loss on the console plus some already. Then the small amounts they make for the 3rd party games I purchased was simply profit all the way. While I don't think I'm every customer, the greater majority had to at least purchase one extra game and a controller or two. I can't see there being too many who only bought the deluxe console and nothing else. |
Yes very true
I got the Wii U deluxe.
Epic Mickey
NSMBU
Rabbids
2 pro controllers
However I am not happy my Wii U controller has froze up or just won't turn on. The screen is not lit up and it won't turn on the red light when it charges. So I'm not sure whats going on but I got to bring it back to Best Buy. So Update if this happens to you. I will let you know if I decide you punch a hole through the controller.
superchunk said:
To Nintendo.. sold and the $21 loss is based on their negotiated price with the retailer, not what the consumer pays. Nintendo sells a wiiu deluxe to walmart for $340. It costs Nintendo $361 to make and distribute the console. THey lose $21. The MSRP is not what a retailer pays. Its just hte suggest price the company wants the retialer to use that accounts for the retailers profit or margin above what teh company is selling the product to the retailer for.
The difference would be if it were a full sale initiated by Nintendo where they gave a reduced price to all retailers and thus told them to reduce the MSRP to some lower price as well. This in fact wouldn't affect the retailers as their margin remains the same but Nintendo is simply making less. In this case since its only Costco, its like a costco initiated thing. |
LUBE!!!
IS that to much? maybe that is to much. Oh well I will just blame it on superchunk.
Anyone want to bet they'll be selling it for a profit by the end of the year, just in time for Wind Waker HD / 3D Mario / Mario Kart and the real marketing push?
Gotta love the fuzzy logic and fuzzier math.
Nintendo reports a loss on a Wii U unit the minute it is manufactured. My suspision is Nintendo was scheduled to manufacture 5.5 million by year end. If we simply look at how inflexible they have been with updating firmware despite patching notority, we'd have to assume Nintendo's cost structure with the OEM is tight tight tight. Each assembly line maxed to optimize cost, therefore Zero flexibility on unit delivery.
My guess is Nintendo may have lowered the unit shipped projections, but internally the same units of
Wii U was gonna be produced regardless, and with that assumption, the huge dent to quarter 1 buttomline and the seemingly ballsy 100 billion net income fiscal 2014 seem to make sense.
Nintendo put most of their resources on 3DS for 2013, having a much bigger installed base and unit sale momentum to make the software push worth it. Took the Wii U hit by pretty much sabbotaging it themselves when they saw little hope (pushed back all meaningful SW releases during 4th quarter. This ensures fiscal 2013 would breakeven or slightly profitable, and fiscal 2014 with a fighting chance of much improved buttomline.
If we look at the 3rd quarter unti composition. Wii U's 3 million vs all others combined of roughly 8 million, that 3:8. Fiscal 4th unit projections of Wii U 1 million vs roughly 3 million others combined. The Wii U shipped ratio is roughly the same quarter to quarter. The loss expected for the 4th quarter obviously takes SW into consideration, but from first glance I really thought something was kind of off. So it would be intersting for us to observe Inventory numbers for the 4th quarter to see if in fact Nintendo took advantage of the lower of cost or market accounting to shift losses onto a left for dead year.
| the_dengle said: Anyone want to bet they'll be selling it for a profit by the end of the year, just in time for Wind Waker HD / 3D Mario / Mario Kart and the real marketing push? |
Not if retailers are slashing the price already. Will also be hard to achieve if they give in to the preasure and drop the price in the coming weeks/months.
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