| UncleScrooge said: Nintendo's projections were based on high sales (Wii level sales actually) so all those calculations are worthless now with sales so low. Lower sales lead to higher production costs per unit than projected. Also, things like marketing budgets are fixed so the marketing budget stays the same but profits from sales are lower than projected. And of course work force, warehouses, development costs, etc. are fixed costs too. Nintendo's fixed costs didn't decrease but revenue from sales decreased a lot. For instance if 2m customers bought a Wii U + Pikmin + Wario that would've made them a profit. But if only 500k people buy the same combo Nintendo bleeds money because Pikmin 3 needs to sell more than 500k units to cover its dev costs. |
ah ok thx for the explanation.
