scottie on 01 May 2010
| Viper1 said: Cutting the price, releasing a new console and moneyhatting would all reduce profits. Consider this: Say production capacity is 25 million for the fiscal year. If they sell 22 million at the current price of $200 with a $50 profit margin = $1.1 billion If they sell all 25 million at the reduce price of $160 with a $10 profit margin = $250 million At $160, they'd have to sell 110 million Wii's in one year to make the same profit as 22 million Wii's at $200. Launching a new console is many times either sold for a loss or close to breaking even. The longer a console is out, the higher the profit margin thanks to reduced manufacturing and component costs. Moneyhatting publishers millions just to get millions is a zero sum gain. |
Although more hardware sales leads to more software/accesory sales, so it aint as simple as that
