VAMatt said:
I agree that subjective calculus with arbitrary numbers ain't the greatest. But, were on a forum about sales where we deal with estimated or outright made up numbers all the time. So, let's play it out a bit more anyway..... Now, we have a larger box that takes up a lot of shelf space. Retailers take smallish margins (typically 25%) on games because they're easy inventory to handle. But, Labo is not a game in that way. It takes up about 30 times the shelf/warehouse space. It also isn't something that drives accessory sales. So, the retailer has to get paid for that space. My retail experience tells me they want a 40% margin. That's $64m of the total revenue that went to retailers. So, we have $64m of retailer margin, $50m of costs to design, produce, package, and distribute. That's a total of $114m, out of the $160m revenue. That leaves $46mm for Nintendo. The problem is though, we haven't yet accounted for any marketing other than packaging. Nobody buys the thing without some advertising, and/or other marketing expense. Millions more were spent there (though, arguably, they didn't spend enough in this area). So, while my (admittedly, very rough) estimates lead me to believe that Labo has been profitable for Nintendo, they also lead me to believe that profit was not huge, and probably not large enough to justify a company taking its eye off of its core business. |
I still think if you put in $10m and get back $100m+ in profits, thats huge.
