Pyro as Bill said:
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. |
OK then. They need to improve the online, add a HD upscaler and make more hardcore games.
Nintendo can't expect Wii Fit Plus, Wii Sports Resort, NSMB Wii, Mario Galaxy 2, Zelda Wii, Metroid, Black Wii, Vitality Sensor, 3DS plus any other suprises to match last years profits.
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If you really think that's what they need to boost profits even further than you've not grasped the concepts of Disruption and Blue Ocean Strategy.
