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Forums - Sales - Op Ed Piece: The Biggest Blunder of the Next-Gen

Well I mostly agree.  Your point that the Wii is overpriced for what you get is sorta misleading.  I know what you mean, but others will take it the wrong way.  Nintendo sells the Wii for a $25 profit (slightly less in America because of Wii sports bundle).  Economically speaking, anytime demand is outstripping supply a machine is underpriced, because it means that they are not maximizing their profits.  Ideally, you would sell 90% of a stock at a price that's well balanced.  The PS3, by pure economic terms, is overpriced, because supply far ouststrips demand, despite the fact that it's sold for a large profit loss.   Really the terms under and overpriced are often misused because people think of them as the "bargin" the company is giving you, but in fact they should really only be used to describe the consumer's demand for the product.


Not to derail this subject but I have a hard time believing that Nintendo is only making $25 on each Wii.

It's basically a GC with slightly boosted output (not enough to even cost Nintendo an additional $40 on processor and vid card), wireless (very cheap), Bluetooth (also pretty cheap), and nice controllers (what, maybe an additional $20 cost to them at most).

They were selling the GC for $99 at the end of its life. I don't see how the Wii comes anywhere near $150 in additional cost of manufacturing.



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vizunary said:
One argument that a lot of people still leave out is the devs vision. The game that they want to make, an artist's view of it. Does no one realize that some programmers want to make the most incredible game that they possibly can? I welcome the higher developement costs, why? Because maybe there won't be nearly as many CRAP games that we have seen before on the more powerful hardware. Where as the wii is much more likely to see horrible games with a higher advertising budget than actual dev cost, HAH lol <-- this could actually happen with the hype and "buzz" surrounding the wii right now. I know that great games are definitely possible on ANY system, but think about it, with the number of "casual" gamers that the wii attracts some PUBLISHERS know that they are the herd and they will buy any crap with a name brand attached. I am not "dissin" the wii, but this always happens, just look at some of the stuff that got made for the ps2, enjoy.


No, that argument is flawed in pretty much every way.  I don't even know where to begin on breaking that down.  I guess we will start with the devs "vision."  Developers present ideas to the companies they work for, companies say yes or no, then give developers a budget.  Studios will not go "oh, you have a $50 million PS3 game you want to make, go ahead!"  Believe me if "graphical vision" had much to do with sales at all every game last generation would have been on the Xbox.  Not only is it ridiculously arrogant of you to assume that every developer just wants to have pretty graphics on their game and that's the limit of their creativity, but it is also unbelievably petty of you to say that Wii gamers will buy bad games.  If all you care about is graphics, that's fine, but don't pretend the rest of the world agrees with you and CERTAINLY don't pretend that designers do.  I'm a computer graphics technology major (specializing in animation) and you know what: I would much rather make a Wii game right now.  I feel I would have a lot more creative options on the Wii.  Your PS2 citation was a horrible example... how many good games were made on the Xbox?  According to gamerankings 2 Halos, followed by a lot of racing games and ports from PS2 games.   Guess what you're gonna get this generation...

rocketpig said:

Well I mostly agree. Your point that the Wii is overpriced for what you get is sorta misleading. I know what you mean, but others will take it the wrong way. Nintendo sells the Wii for a $25 profit (slightly less in America because of Wii sports bundle). Economically speaking, anytime demand is outstripping supply a machine is underpriced, because it means that they are not maximizing their profits. Ideally, you would sell 90% of a stock at a price that's well balanced. The PS3, by pure economic terms, is overpriced, because supply far ouststrips demand, despite the fact that it's sold for a large profit loss. Really the terms under and overpriced are often misused because people think of them as the "bargin" the company is giving you, but in fact they should really only be used to describe the consumer's demand for the product.


Not to derail this subject but I have a hard time believing that Nintendo is only making $25 on each Wii.

It's basically a GC with slightly boosted output (not enough to even cost Nintendo an additional $40 on processor and vid card), wireless (very cheap), Bluetooth (also pretty cheap), and nice controllers (what, maybe an additional $20 cost to them at most).

They were selling the GC for $99 at the end of its life. I don't see how the Wii comes anywhere near $150 in additional cost of manufacturing.

A lot of the cost came from having to make all the components smaller. In fact, the Wii actually shares none of the same hardware components of the gamecube other than those necessary for backwards compatability and controller ports. The controllers are sold at a loss (both of them), so yeah I'd assume motion sensing tech is pretty expensive right now.

Edit: also the gamecube is sold for a loss at $99. 



naznatips said:

A lot of the cost came from having to make all the components smaller. In fact, the Wii actually shares none of the same hardware components of the gamecube other than those necessary for backwards compatability and controller ports. The controllers are sold at a loss (both of them), so yeah I'd assume motion sensing tech is pretty expensive right now.

Edit: also the gamecube is sold for a loss at $99. 


Interesting. Do you have any links for this info? It's not that I doubt you, I would just like to read a little more about the subject. I had no idea motion tech was that pricey.




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I'm not sure about the selling the controllers or the GC at a loss thing, which I doubt. But all the estimates I saw said the manufacturing cost alone for the Wii console was $160 due to taking the components and making them not only tiny but having them consume almost no power. Add WiiSports, remote, and nunchuk to that, then tack on shipping and retail costs, and they're probably still making a profit but not as much as you might think.



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I'm going to need to see a source on the Gamecubes sold at a loss statement. I must admit I'm skeptical. Beyond skeptical



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Serves me right for challenging his sales predictions!

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rocketpig said:
naznatips said:

A lot of the cost came from having to make all the components smaller. In fact, the Wii actually shares none of the same hardware components of the gamecube other than those necessary for backwards compatability and controller ports. The controllers are sold at a loss (both of them), so yeah I'd assume motion sensing tech is pretty expensive right now.

Edit: also the gamecube is sold for a loss at $99.


Interesting. Do you have any links for this info? It's not that I doubt you, I would just like to read a little more about the subject. I had no idea motion tech was that pricey.


Sorry I am having trouble locating the article I read (it was back in early October). I do have one about the cost of producing the Wii itself though being $158 minus the cost of the Wiimote and Nunchuck. Add 70 to that for the Wiimote and Nunchuck and the profit on the Wii is actually under $25.

http://www.younewb.com/index.php/2006/12/14/the-wii-just-the-console-only-costs-158-to-make/

Edit: Kotaku reports it as $40 profit per Wii sold, so maybe the article I read was wrong and the Wiimotes are being sold at production cost.  http://kotaku.com/gaming/wii/wii-autopsy-discovers-manufacturing-cost-221736.php



It's silly to think that the epic games of this generation will be going to the Wii, the system is just too weak. Doesn't matter if Nintendo sells an infinite number of Wiis, plenty of game makers aren't going to massively water down their games. It's a matter of integrity. If all artists looked at the potential audience for their art, we'd never have any R-rated films with big budgets, we'd be stuck with nothing but G-rated kiddie trash for casuals. No, they purposely limit their audience because it allows them to present their vision to the audience the way it's supposed to be seen. The PS2 argument doesn't hold water either -- its hardware capabilities might have been weaker than the Xbox or GameCube, but it was still in the ballpark. Continuing the metaphor, the Wii's basically in the minor leagues compared to the 360 or PS3.



naznatips said:


No, that argument is flawed in pretty much every way.  I don't even know where to begin on breaking that down.  I guess we will start with the devs "vision."  Developers present ideas to the companies they work for, companies say yes or no, then give developers a budget.  Studios will not go "oh, you have a $50 million PS3 game you want to make, go ahead!"  Believe me if "graphical vision" had much to do with sales at all every game last generation would have been on the Xbox.  Not only is it ridiculously arrogant of you to assume that every developer just wants to have pretty graphics on their game and that's the limit of their creativity, but it is also unbelievably petty of you to say that Wii gamers will buy bad games.  If all you care about is graphics, that's fine, but don't pretend the rest of the world agrees with you and CERTAINLY don't pretend that designers do.  I'm a computer graphics technology major (specializing in animation) and you know what: I would much rather make a Wii game right now.  I feel I would have a lot more creative options on the Wii.  Your PS2 citation was a horrible example... how many good games were made on the Xbox?  According to gamerankings 2 Halos, followed by a lot of racing games and ports from PS2 games.   Guess what you're gonna get this generation...

I'm sorry, either you misread or I mistyped my post. Take a look at a dev like Kojima, do you think he would be happy making MGS4 for the Wii while there is more powerful hardware to deliver his "vision" on?

Also, IT'S NOT JUST THE FUCKING GFX PEOPLE, physics, A.I., game engines, etc need powerful hardware.

I tried to even put in there that I am not talking shit about Wii owners. On the PS2 there were some of the absolute WORST games ever made, yet they sold due to a large number of console owners. The same thing will happen to the wii, just think about it.

Yeah, we'll get Wii ports, like we would buy that crap....you chose this road.

EDIT: Just like the number of 360's in circulation allowed for games from Burger King LOL



n00b said:
It's silly to think that the epic games of this generation will be going to the Wii, the system is just too weak. Doesn't matter if Nintendo sells an infinite number of Wiis, plenty of game makers aren't going to massively water down their games. It's a matter of integrity. If all artists looked at the potential audience for their art, we'd never have any R-rated films with big budgets, we'd be stuck with nothing but G-rated kiddie trash for casuals. No, they purposely limit their audience because it allows them to present their vision to the audience the way it's supposed to be seen. The PS2 argument doesn't hold water either -- its hardware capabilities might have been weaker than the Xbox or GameCube, but it was still in the ballpark. Continuing the metaphor, the Wii's basically in the minor leagues compared to the 360 or PS3.

Fine, you want to compare in the ballpark:  How about the PSone.  It's power comparison to the N64 (and graphical capabilities difference) is almost exactly the same as the Wii to the 360 and PS3.  Sure the N64 had some great games, in fact it had some industry defining games, but where did MOST good games go?  It was not the much hardware superior N64, which was more expensive to develop for and had a smaller user base.  The Wii has a better GPU than the old Xbox did.  Was the Xbox only capable of kiddy graphics?  Of course not.  You should pay more attention to the history of gaming.  Not much ever changes.