dudeitsminion said:
CNN estimates that the Wii U manufactures for $228 a unit. This article is a year old so I imagine the parts are even cheaper now. If they sold at $199 they would only be taking a small hit while selling millions more. |
6$ for 2GB or RAM, 6$ for an 8GB SSD? Not mention that the most sold unit is the Premium, which holds a 32GB SSD, the Basic has been phased out. 228$ is simply too low, Nintendo reportedly says that they are still losing money on the hardware, so 228$ one whole year ago simply cannot be true. R&D, packaging and shipping surely bring up costs but that should usually start to even out after 18-24 months on the market and it's not like Nintendo have had a huge advertisement budget on the thing.
If Nintendo is still losing money on each unit at 299$ and CNN claims over a year ago that the components and assembly itself was 228$, that means that advertisement, packaging and shipment and trailing R&D coverage makes up probably more than 100$ per unit to this day (with inevitable drops in assembly costs over time factored in) and that's simply not possible.
199$ would be a death stroke to Nintendo's bottom line and ensure massive losses for the 2014/2015 FY. And, like I said; that price point wouldn't have guaranteed high sales. Claiming that a 199$ price point would only cause a "small hit" and help them sell "millions more" leads me to believe that you don't know fully how these things work and just how dire the whole Wii U situation is. By your logic; they should lower the price now along with Mario Kart, maybe slice off 50$, that should leave them in the black and sell heaps of consoles, right? There's a reason they're sitting idly by while the competition sells 2.5-5 times as much every week and there's a reason why they're pulling out of almost every mainstream press event and venue with traditional showings, they are planning something in the near future, as a direct consequence of having hit the wall running with the Wii U.
Edit; see, here's one source claiming the production cost is 180$, and that was even before the console launched, so about a year before the CNN report.
http://wiiudaily.com/2012/04/wii-u-costs-nintendo-180-to-manufacture-report/
http://www.escapistmagazine.com/news/view/126666-Wii-U-Still-Selling-Below-Cost
The above link is from August, where Nintendo states that the Wii U is "still selling below costs" and that was before the price cut (Premium was 349$ then and the best selling SKU by far) and a mere7 months before the CNN breakdown. How did the cost go down by over 120$ in a little over half-a year? You still want to insist that a 199$ price point would incurr a "small hit"? It was said that two pieces of software sold were needed to cover the losses when the Wii U launched, that would indicate an actual cost of about 370-400$ at launch time, making your statement all the more incredible.
