Reggie was misquoted when he said Wii U profitable after one game

[Barozi]

bananaking21 said:

Barozi said:

bananaking21 said:
ok i know this is off topic but could someone explain to me how software makes money for nintendo? i know how first party software makes money, but how do 3rd party games money for nintendo (or any console manufacturer) do they like take a percentage of every piece of software sold?

thanks! can i ask what does the 7$ "returns" stand for?

Just gonna quote the article where this chart is from:

"Another way to look at it is to say publishers such as Activision and Electronic Arts receive $45 after retailers take a $15 cut. Publishers turn around and pay a $7 licensing fee to console manufacturers such as Microsoft, Sony and Nintendo. The cost of making, packaging and shipping game discs to stores carves up another $4. Finally, not all games sell, so the expense of returning unsold inventory eats up another $7.

That leaves publishers with about $27 per disc sold for development, marketing and other expenses. These are, of course, back-of-the-envelope averages. Each of these numbers can vary. For instance, a publisher could negotiate a smaller licensing fee with console manufacturers. And by deploying the Goldilocks method of inventory (not too much, not too little), they can also minimize returns. Tinkering with the margins in these ways lets companies tune their bottom lines."

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html