Why Nintendo cannot drop wii price yet

[theprof00]

mike_intellivision said:

theprof00 said:

Say the wiis components are at the 20000 Units produced mark.

Sony started at the 0 Unites produced mark.

This is why Sony had lots of room to drop the price and wii has less.

Or at least that is what my point is.

 

But do the components really follow that standard graph?

 

Mike from Morgantown

 

 

Here is the pricing list for ps3 in 2006:

This is a breakdown from 2008 Dec

"Research firm iSuppli says that Sony continues to sell PlayStation 3 hardware at a loss, losing about $50 with each unit sold, each $399 system costing the company $448.73 to build.

According to the agency's previous research, however, Sony has significantly brought down manufacturing costs since the PS3 launched in November 2006, when it spent over $840 for the components in a $599 model, and $805 for the components in a $499 system.

To cut down on those costs, the company has taken advantage of smaller, cheaper chips, with the Cell processor's price down from $89 in 2006 to $46, and the Nvidia Reality Synthesizer down from $129 in 2006 to $58. Because smaller chips require less power, the systems now ship with a smaller and less expensive power supply, costing $21.50 instead of the previous $30.75.

Sony's decision to exclude the "Emotion Engine" PS2 CPU chip, which was used for backwards compatibility purposes with PS2 games, from its newer models also likely contributed to the cheaper manufacturing costs.

The company was able to further reduce costs by reducing parts -- when first released, the system was comprised of 4,048 parts, including those in the controller. Since then, the number of parts has been tapered by about 30 percent to 2,820, according to a report from BusinessWeek."

 

This second breakdown doesn't show how much the bluray drive costs, but you can buy one online for about 60$ now.

 

compare this to the Nintendo costs list

"According to analyst Koya Tabata from Credit Suisse, Nintendo’s manufacturing costs for the Wii have almost halved since the console’s introduction in 2006. The analyst cites a 45% decrease in costs hardware costs, however, that does not translate in 45% more profits for Nintendo, as fixed costs (such as packaging, transportation etc.), remain the same."

http://www.digitalbattle.com/2009/04/07/wii-manufacturing-costs-down-by-45/

that table above is hardware costs. so, 158- 45%=87+ extras (37)= 124

costs have only gone down 34$ in total according to these graphs, whereas the ps3's graphics card dropped 100$ by itself.