TheSource said:
There is no way in hell a Wii costs less than $100 to make.
Wii has a number of things that make it cost more than GC:
- Slightly better tech
- Its smaller by area
- It comes with an infared light projector/camera
- It can read motion tech control
- The $250 package includes a game, Wiimote, nunchuck, Wii Sports, sensor bar, Wii-stand
- GC used cheaper/smaller mini-discs and I dont think it had any flash memory.
The Wii package is probably sold to wholesalers for $225. So I'd bet the package of Wii ($150) + Wii Sports ($20) + Wii Mote w/ batteries ($30) + Nunchuck ($12) + Wii stand ($5) + Sensor Bar ($3) was just beyond the point of break even.
Today, its probably more like this Wii ($135) + Wii Sports ($10) + Wii Mote w/batteries ($20) + Nunchuck ($10) + Wii stand ($3) + Sensor bar ($2). But that isn't $70 in profit, because retailers still buy it for $225 or whatever. It might be $45 in profit though - which is why we may see a Wii price this year despite what Iwata has said so far.
The GC was profitable as a platform, and since it had abysmal software sales (never more than 50 million shipped in a fiscal year) due to its low hardware sales (despite a huge attach rate of 9.6 lifetime) its pretty likely the hardware itself was profitable as the royalties on Game Cube third party games would have next to nothing ($10/third party game...20m third party games sold per year on avg...~200m a year at best).
Wii in contrast has seen something like 190m third party games shipped in ~2 years 8 months which comes to 70m+ per fiscal year at $10/third party game. Thats $700 million a year...which means Nintendo could probably still be profitable on Wii even with a $100 price drop even if the Wii package costs $180 to make still.
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