okay after a few more email this is what i got for his reasoning
"copy paste from email---
The numbers came from the Herald Tribune (and you would have seen that if you’d clicked on the link). Most of the numbers reported are “sell to” numbers not “sell through” numbers. The difference is what the customer buys “sell through” and what the vendor sells to retailers “sell to”. The problem is it takes up to 90 days from when the vendor sells a product until it actually gets on the shelf so any numbers from the vendor “sell to” after November are simply talking about goods in transit. The entire industry is like this but it overstates dramatically what is actually sold.
The gaming crowd may be in agreement on Nintendo making money but, if they were, it would have been in their best interest to outsource manufacturing and meet demand. The reason they didn’t was because they take a paper loss on every system sold which cuts into reported profits so have to manage system production so they can protect their bottom line (and keep their stock price up). What is being left out of the “gaming crowd” number is likely burden and any reserves taken which accounts for between $50 and $100 of every system sold and this is the paper subsidy Nintendo is paying. Given the cost of the system they should be marking it up more to protect margins and can’t, the difference is the subsidy. "
