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h2ohno said:
The Wii cost $158 to manufacture, not including wiimotes and wii sports. Add r and d costs and marketing costs and $250 looks fine when they also want to make a relatively decent profit.

https://www.engadget.com/2006/12/15/wii-manufacturing-costs-ring-up-to-just-158/

Actually that's a relatively large gap still, though I don't buy that adding a front loading disc drive, a meager amount of flash RAM, WiFi chip, and a moderate overclock of the chipset added almost $60 to the cost over a GameCube. That's a huge amount of wasted money. 

But even so, lets add $30 for the controllers ... so now you're up to $188 ... $70 more for a chipset is a massive, massive gulf. You could have likely gotten something about 1/2 of the XBox 360 in there without much fuss and the quality of the library of games would've been hugely different IMO. Third parties would've had no choice but to put a lot of their top teams on the system, because its sales were so hot its first 2-3 years.