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drkohler on 16 November 2009
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strunge said:
izaaz101 said:
strunge said:

it's a no lose for Wal Mart. at the end of the day, they aren't losing $100. at the least, they pay only $100 for each 360 arcade anyway (retail price to wholesale price is generally double, ..

I was under the impression that video game hardware is "generally" sold at cost for a long time, and then at a slight profit, by the retailers. Their money is made off of the software.

manufacturers take the loss, ...

Wow.. so much nonsense piling up..

1. Manufacturers certainly don't take the loss for mass manufactured products. For obvious reasons. Manufacturers only make the stuff they are ordered to make, they do not care what happens to the stuff once it leaves the factory. The manufacturer margin may be extremely low (in the harddisk business, usually a few dimes per hd), but to stay in business, they obviously have to make a profit.

2. Apparently consoles are sold at around cost in the USA as has been said here in various threads. Note that USA =/= the world. The markup for those consoles basically is around the same markup for home electronics in this price range (which varies from country to country). In central Europe, this equates roughly to 16-26% (obviously, this is confidential information). No retailer in Europe would sell durable goods outside these margins.

3. WalMart certainly pays way more than $100 for an Arcade (unless MS loses a sh*tload of money on every transaction - and pisses of regular shops that pay regular prices) . The arcade is basically a PS3 sans harddisk/wifi (and minus quality). So if Sony loses about $30 on every PS3 currently sold then it is easy to estimate that manufacturing an Arcade costs roughly $200.

4. It is unlikely that MS did not know about this deal and is not in some way involved directly or indirectly (they have to have all the additional consoles for WalMart in inventory in the first place). If some blogger calls MS and wants to know the inner secrets between MS and WalMart, don't expect anything but a zero-content reply. If you read content into a content-free reply, then that is the problem for the thread-opener, not MS or WalMart.