well, he did say give or take, lol

Heaven help Nintendo if Microsoft or Sony ever listen to these Buisness analists. Nintendo needs to make money on every system sold they are a game company there is no other real source of income to Nintendo without games. Sony and microsoft can loose money on a system and if they can not make it up in games Movies electronics computers and operating systems is other areas to still make money. If the time come and Microsoft and Sony directly compete with Nintendo (system capabilities) Microsoft and Sony will Slaughter Nintendo. This is in no way a blast at Nintendo but figure into the fact sony looses more on selling a PS3 than it cost to buy a Wii let alone what it cost Nintendo to build one. Sony could have made a system the same or slightly better than the Wii and gave it away. Sony would still have lost less than they are now by selling the PS3. Who wouldn't want a machine that could do what the Wii could do for free or even half price?

 I really would hate to see this as I love Nintendo and if we lose them as a console maker it would be bad for everyone. I also would hate this because it would limit serious story driven gameplay too as most people want to just sit and play around with a game. That would leave us who would rather spend 40-100 hours playing a indepth story very limited selection. Microsoft needs to find its niche in the market and it will be fine. I do think both Microsoft and sony will make profits this generation. I don't know if Microsoft is even concerned about making back the $ they lost with X-box it was an investment in future gaming machines not ever really geared to be profitable.

And I am glad I am not one. I am just multiplying 3 million times $600. There is a numbers game I am to lazy to get involved with. There are probably around 200k that are sold for $500 and the rest for $600 and more. I didn't forget many countries got a raw deal. But there is a good chance that that 800k PS3's sold in europe helped sony out instead of being a loss. They probably even made a profit. Even if Isuplli was to be believed (which I don't) the PS3 could weigh in at a price tag of $800 us dollars to manufacture and quite a few countries launch the systems with equivilents between $1000 and $1200 us dollars.

Am I wrong here? I could have sworn we had some comments here about the extreme high price of the PS3 overseas. 

Microsoft has publicly admited they entered the videogaming industry because they projected that the next generation of Playstation(PS3) would become the main standar for internet gaming and they saw that market as with a lot of potential to make money and wanted to reserve it for themselves .Thats why they introuduced the Xbox and pushed so hard the internet from the word go ,they wanted to have some of the pie for themselves and from then on erode PS market share and eventually reserve the online antics for themselves ,maybe even connecting it with PC online gaming and turning from all that the best profit possible .Once in the market they probably saw more positive things ,as the royalties ,the licensing of its XNA and DIrectX etc ....in few words making everybody pay them for everything .They will put as much cash as neccesary to obtain a predominant position in this industry ,and if they can to reproduce the monopoly they have in the computers world .

Companies cannot engage in anti-competitive business practices as you describe. It's covered under anti-trust laws and can lead to the breakup of the company. You can't just lower prices and take losses for the sake of driving companies out of business. The FTC would be all over such a thing. 

The higher prices in PAL regions are due to higher taxes built into the price and higher distribution costs, not because they decided to make a profit there and not in NA/Japan. :P

It wouldn't just be bad for everyone it'd be the end of the videogame industry. I support Nintendo not only because I like their games and how they make their machines but ALSO because I know who props this whole industry up. I find myself stunned at the hate for Nintendo sometimes. You don't have to like their style but if you want this industry to continue as it is you better hope they stay alive.

Sony & Microsoft play in this world but this is Nintendo's world. Their whole livelihood depends on gaming; that's why they take care of it better. And people worry about a Nintendo monopoly. A Sony and ESPECIALLY a Microsoft monopoly would be 10 times worse believe me.

Think about it. Why has every competitor who has entered the videogame field ended up losing bushels of money just trying to make it in this biz except Nintendo? All of 'em. All the Ataris & pre-NES systems, Sega, NEC, 3DO, Sony (EVEN *IN* success), Microsoft. None of 'em know how to make money in this field that's why. If they had to compete the way Nintendo competes they couldn't do what they do.

However, even IF these guys smarten up financially they are missing the special magic that Nintendo brings to their systems. They will outlast 'em all. That's saying something.

If Microsoft wasn't Microsoft they'd be out of gaming more than 2 years ago. Luckily they got money to burn. Let's see how long they plan on burning it.

John Lucas 

Basically, all that HD processing power (for the 360 and PS3) is not good for making money off of mass market systems, unless HD catches on really fast in the next year or so.

 That's rather easy. They are to strong in the PC market. Their market sharer is so big, that nearly everything will weaken their position!  They need additional projects in the long run, but projects, where they can use therii experience. With Direct X and so on they were already involved in the PC games market. In principle a gaming console is only a small, cheap computer. And they have a vast experience in developer support.

And there were some additional elements:  There were few companies that felt alienated and many companies, that supported this move. Companies like Sony already saw Microsoft as a threads because the PCs were already entering the Living Rooms, and with them Microsoft as the most probable dispatcher. Many hardware developpers were already looking for this position. For them a M8icrosoft gaming console were simply a slightly different enemy then before. But many game designers that were developing games for the PC saw it as an easy way into the console market. Andf they were in no position to dominate this market. An important factor, when governments already look closely at your business practices.

The business model which justifies the creation of systems like the XBox 360 and PS3 largely depends on the system maintaining a virtual monopoly on the market; this monopoly is needed in order to control the rate of price reductions, recover losses through licencing fees on third party games, and to leverage the large usebase to create additional markets (XBox Live, Blu-Ray).

Essentially, if you spend $2 Billion on research and development of a platform, you then spend $2 Billion (over 5 years to market the platform, and then you only sell 20 Million units at an average loss of $100 you need to make up $300 per system in order to break even. On the other hand if you spend the same $2 Billion on research and development, $2 Billion on marketing and (on average) break even on the sales of 100 Million consoles you only need to recover $40 per system.

Nintendo's approach is far more maintainable from a low sales perspective (small research and development cost and marketing costs recovered through a profitable system sales) and will be amazingly profitable if they're in a dominant position.