Does the Wii prove that the HD razor/blade model is flawed?

[bdbdbd]

@Rol: Ok, i don't have a reason to doubt HappySqurriel either, but does he mean "below manufacturing costs" or "below launch costs".
Just finding it odd, that it would've been sold at a loss at any given time without factoring the "launch costs". The financial reason why Nintendo wants to release its consoles prior to christmas, is because it pays quickly back the initial cost it takes to launch a console. Even if you would sell the console for a profit, the distribution, marketing and manufacturing the launch batch of consoles is going to hit the bottom line for the period in any case.

For example, if you manufacture million consoles as an initial batch of consoles and it costs 100€ per console to manufacture, but you make 100€ profit each console sold, you break even with the launch when the million consoles a sold, assuming another million is manufactured in the same period. Nintendos "pre-christmas" launch strategy, in the terms of the example, means they distribute million consoles at the same time they manufacture 500k consoles. With Gamecube, it was pretty easy to fuck up the strategy since it underperformed.

I thought Dreamcast was sold at a loss after it was discontinued and they started clearing the inventory.