Nintendo makes $6 from every Wii sold

[NJ5]

rajendra82 said:

alpha_dk said:

Darc Requiem said:
I'm not buying it. At launch the cost estimate for the Wii was $180.

 

At launch $180 was about 21600 Yen (Nintendo's actual cost then)

Today, 21600 Yen is $226.  That's $46 less profit per unit sold in America (assuming no cost reductions in manufacturing).

That's painful.  They might have even pulled more profit in the beginning than they are now with that kind of exchange rate fluctuation.

The Wii is manufatured in China.  If at launch the Wii cost $180 to make, that was 1,420 Yuan.  In today's exchange rate 1,420 Yuan is $212, and it would seem like a lot of the profit is gone.  But Nintendo works directly with Chinese manufacurers, so at launch the Wii cost about 21,000 Yen, and at today's exchange rates 1,420 Yuan equals 19,300 Yen.  The manufacturing costs have gone down for them even without any added efficiency due to cheaper parts and increased production. 

 

The

You don't know what currency production is paid in. It could be a mix of currencies too, with different suppliers charging in different currencies.

The best way is to look at the impact on their profits (which includes software of course). The impact has been substantial, the same with Sony.