Does Wii U still sell at a loss?

[TheLastStarFighter]

Max King of the Wild said:

TheLastStarFighter said:
Badgenome = reply of thread.

It's hard for us to know. Speculation on the chip says it may see a 20-40% reduction in cost over its first year, but we're only about 6 months in. The yen is also about 25% weaker so that would help in non-Japanese markets. A 25% reduction would be about $75. I would doubt they were losing more than $75 per unit so I would say its at breakeven or better in the west at least.

25% is more like $55. I think you used the retail price when you should use the manufacturing cost

No, I should use retail price because we are talking about transferred revenue.  The weak yen doesn't help with manufacturing costs - it might actually hurt this a little - but it means more revenue is generated by each sale when the money is transfered the the parent Japanese company. Actually, what we should be using is wholesale price but we don't know that. Estimates on retail markup are 25%.  So if 25% of Wii U revenue is going to retailers, then we have approximately $247.5 going to Nintendo in Japan with each sale.  The 25% gain on that would be about $62.  So the situation is slightly different but fundamentally the same.  It took about 1-2 games for Wii U to break even in the begining and $62 is more than the revenue Nintendo would get from 2 games.  Lots of generalizations and approximations here, of course, but the principal is probably true.