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curl-6 said:

Parts get cheaper as they get older, not more expensive. Hence the Wii, which was old tech even at its launch, selling for $99 now.

It's frankly quite absurd how people treat the Wii U like it's this magical one-of-a-kind console where the rules of the industry don't apply to it. How it's magically the only console where costs rise over time instead of dropping. How it's magically the only console where the graphics won't improve over time. Etc.

Pretty sure the only Wii selling for $99 is the Wii mini.  The system where they removed component output, SD slots, wi-fi, Gamecube ports/support.  So that kind of supports his point.  Those are likely items that haven't seen their prices fall much since 2006.  The PS3 is also an example.  HDDs have gotten bigger, but the price hasn't gone down substantially.  Even low capacity or old tech drives can be fairly expensive, sometimes even more than a drive with many times the capacity.  That's why their budget model ditched the HDD and put in a manual top loading disc drive.  Forgot the Wii Mini also changed disc drives.

I'm also not sure why you think economies of scale is magical.  Nintendo very likely would have had a lower cost per unit if they had produced 9 million Wii U's rather than the 2.8m they are projecting.