fkusumot said: It's more like they can't compete on value. I guess price has something to do with that.

 

I blame your knowledge on economics.

no matter how you look at it the system isn't worth 250 bucks... if Nintendo didn't make a 100 bucks per console sold I'd be surprised

actually it is selling based on price. that's why everyone else is dropping price. Nintendo can keep the same price and remain sold out. Not to mention the developers costs for making games is cheaper. Plus their games sell for less which makes it perfect for casual gamers (not going to invest too much into this hobby) and parents (not going to invest too much into this phase of my kids entertainment). I have a PS3 because I prefer the better graphics and everyhting else that comes with it, however I am paying a premium for it. I wish the games were closer to $39.95. the good thing is that PSN has a  lot of games for $5.99 and up.

mrstickball said: Yes they can. Unlike Nintendo, Sony and Microsoft have a long history of pricing their hardware at or below manufacturing costs, unlike Nintendo. This allows them to counter price drops rather quickly. Nintendo has to make a profit from their gaming division to stay afloat. Nintendo nor MS need to. That allows them a much greater advantage on pricing.

When did we enter an alternate reality? Last I checked, Sony and MS took (and still take) huge losses on their gaming divisions.

FY* Sony** Nintendo Microsoft
1998 974,000,000 629,000,000
1999 1,130,000,000 645,000,000
2000 730,000,000 421,000,000
2001 -409,000,000 726,000,000
2002 623,000,000 800,000,000 -750,000,000
2003 939,000,000 560,000,000 -1,191,000,000
2004 650,000,000 316,000,000 -1,215,000,000
2005 404,000,000 777,000,000 -485,000,000
2006 75,000,000 894,000,000 -1,262,000,000
2007 -1,969,000,000 1,489,000,000 -1,892,000,000
2008 -1,265,000,000 2,480,000,000 426,000,000
2009 51,000,000 1,026,000,000
Totals 1,953,000,000 10,762,000,000 -6,369,000,000

Source: http://www.neogaf.com/forum/showthread.php?t=111003

Take a look at the launch year of the PS2 for Sony ($409mil in the hole), the launch year and follow-ups for the PS3 ($75mil profit, $1.969bil losses, $1.265bil losses), and tell me how it's possible they get away with taking monumental losses. Microsoft's numbers are even more incriminating for that theory, with constant losses and only a bit of goalpost-shifting on their behalf by shifting a very XBOX-related loss (the $1bil XB360 replacement plan) to another division to show a profit they didn't actually make on video games. And how did Nintendo manage to make significant profits even in their worst year if they rely on software alone for profits and software sales were at all-time lows in those years?

Please check the facts before you make ridiculous claims. That is all.

Okay, so I slightly misread the post. Still, MS has tossed almost a tenth of their estimated assets at the XBOX brand, and Sony has nearly lost as much as they've made on the PlayStation brand. That's bad business. Really bad business. Building your success on massive losses is the worst kind of risk-taking there is. It shows no creativity whatsoever, just a "throw money at it and pray it works" strategy. Which is fine when you're making a copycat product, as long as you throw the most money at the problem. But it's horribly inefficient.

Awoken said: actually it is selling based on price. that's why everyone else is dropping price. Nintendo can keep the same price and remain sold out. Not to mention the developers costs for making games is cheaper. Plus their games sell for less which makes it perfect for casual gamers (not going to invest too much into this hobby) and parents (not going to invest too much into this phase of my kids entertainment). I have a PS3 because I prefer the better graphics and everyhting else that comes with it, however I am paying a premium for it. I wish the games were closer to $39.95. the good thing is that PSN has a  lot of games for $5.99 and up.

Good point. That explains why the $50 Gamecube is still the top selling console after all these years. And why DS and PSP can't compete against those GBAs you can win for a buck or two in arcade machines. And why the cheaper 360 drove up sales so much in Europe. Afterall, the casuals don't want to invest much in the hobby. It's not like they're going to spend $250 bucks for the console or $90 for that flop Wii Fit!

Anyone suggesting that parents will buy kids the console they want, and that Wii, in turn, has the most appealing, diverse and original game lineup for kids probably also thinks that constant price-cutting is a symptom of an unhealthy industry, like that fool Satoru Iwata.

I guess I've seen the light. Despite the fact that Nintendo has succeeded without price cuts and view price cuts as bad business, we should probably label future price cuts as their big advantage. Their advantage can't be the unique values, motivations and processes which have allowed them to create the biggest run of industry-redefining mega-hits in VG history.

Erik Aston said: I guess I've seen the light. Despite the fact that Nintendo has succeeded without price cuts and view price cuts as bad business, we should probably label future price cuts as their big advantage. Their advantage can't be the unique values, motivations and processes which have allowed them to create the biggest run of industry-redefining mega-hits in VG history.

You got that right! As much as the technology is not as advanced on the Wii as their competitions their lower cost of manufacturing will make them the winner, hands down, int hte current generation of consoles. they will have a console base much deeper than the PS3 or Xbox so their profits with each game release will be dramatically greater. their console isn't the best, newest or even envelope pushing but financially (and this is what they and everyone else is in business for) they are sweeping up the competition. While the others cut console prices and lose money per console to make it back on title sales Nintendo is just cruising. Good job Nintendo!

Sky Render said: Okay, so I slightly misread the post. Still, MS has tossed almost a tenth of their estimated assets at the XBOX brand, and Sony has nearly lost as much as they've made on the PlayStation brand. That's bad business. Really bad business. Building your success on massive losses is the worst kind of risk-taking there is. It shows no creativity whatsoever, just a "throw money at it and pray it works" strategy. Which is fine when you're making a copycat product, as long as you throw the most money at the problem. But it's horribly inefficient.

This has so much truth it hurts.

Nintendo on the up, Sony on a downer....its all gone topsy turvy

 

Cueil said: no matter how you look at it the system isn't worth 250 bucks... if Nintendo didn't make a 100 bucks per console sold I'd be surprised

 

compared to "cost to produce", it's overpriced.

 

compared to "consumer demand", it's underpriced.

 

wondering which is more important?

colonelstubbs said: Sky Render said: Okay, so I slightly misread the post. Still, MS has tossed almost a tenth of their estimated assets at the XBOX brand, and Sony has nearly lost as much as they've made on the PlayStation brand. That's bad business. Really bad business. Building your success on massive losses is the worst kind of risk-taking there is. It shows no creativity whatsoever, just a "throw money at it and pray it works" strategy. Which is fine when you're making a copycat product, as long as you throw the most money at the problem. But it's horribly inefficient. This has so much truth it hurts. Nintendo on the up, Sony on a downer....its all gone topsy turvy

 

You in a barbershop quartet?