Pineapple on 21 February 2011
| Squilliam said: If they cut the price by $50 they'll cut their hardware margins by at least 50% and they'd have to sell at least twice as many units to make the same profit as before. I don't really see them cutting the price as theres no real objective reason to maximise market share at this juncture unless they have an oversupply of Wii's which they need to clear. |
It's not that simple. They'd be halving their initial profit, yes, but not their long-run profit.
If the people had bought just the Wii, and no games and no controllers, they would have halved their profits. But seeing as people buy games and remotes - which most likely account for more of the profits than the hardware - it's nowhere near as simple as you portray it.
