Why could the person writing something like that not at least TRY to get it right.

"The top three Wii games--"Wii Play," "Super Smash Brothers Brawl" and "Super Mario Galaxy"--are all Nintendo's own titles, ..."

Gah! Do at least a bit of research before spouting nonsense. This coupled with the previously spotted mistakes (Wii released 3 years ago! PS3 at $300!) really makes me mistrust anything the article has to say. I mean, it's not like it's hard to confirm these things, is it? It's called research.

EDIT: Another gem.
"Sony's PlayStation 3, with 13 million units in users' living rooms, and Microsoft's Xbox 360, with 23 million units." Uhm? Wat? Isn't the PS3 a bit too low here?

And while it's stated that america has 43 million PS2, and VGChartz says 49 million, I'm going to give the autor the benefit of doubt on that one. That might have come from different sources, I'm not really knowledgeble about the PS2 sales.

Like?  They're expierencing slower sales but they're still profiting on every piece of hardware outside of the PS3..

Well, any manufacturer wants to be paid in a currency that is:

a) stable enough for the time period the manufacturer is interested in. If you live in Zimbabwe, you would have a hard time telling your manufacturer that you pay him in Zimbabwe $...

b) "exchangeable". Manufacturers usually have to buy materials from other manufacturers/raw material providers. If they can pay in the same currency they receive, no hassles with currency transfers (and the transfer organisations _always_ win if such transactions are necessary). Manufacturing contracts may take months to write down and include provisions for payment forms/timelines/hundreds of whatnots. If you had to write in all the various currencies into the contracts and what happens if one currency fluctuates against another currency, this would make one hell of a lenghty contract. And the manufacturing contract for a PS3, for example, is alread likely a several hundred pages thick book...

Oil barrels are paid in US$ because basically the whole oil thing started in the United States and because the US has been the strongest currency historically due to its strong economy. Note that there have been talks about switching to Euros for quite some time now in OPEC, because the US is no longer being considered a strong/the strongest economy by many of its members.

I think it is possible that Nintendo may make much less than people anticipate from hardware sales when all costs are considered ...

Most console manufacturing cost estimates focus entirely on the cost of the console to manufacture and never consider the cost of things like the controllers and accessories that ship with the system, the power adapters and video cables, the packaging and documentation, the cost to ship a console half way across the world, or any profit made by the retailer; although none of these costs are (amazingly) large on their own, when added up they can make up a noticeable portion of the sale price of a console.

I recall early in the Wiis lifecycle the number was like 60 or 70.

Let's assume you're right... $79 profit at launch, on a Wii costing $250.

At November 2006 exchange rates, that meant 9,250 yen profit on a 29,250 yen product.

As of today, the same $250 translate into 23,300 yen only. Assuming a worst case of no production cost reductions and production totally paid for in yen, this would mean that profit is now only 3250 yen, or $34.

Then there's what HappySqurriel said. Most cost analysis only includes the bare console hardware, when there's many more small things to consider.

I have a guess to why the number is odd.

What if they consider the price of the Wii, excluding Wii Sports totally?

They drop off 50 dollar/euros, and say that this takes out Wii Sports. Then they compare this to the producing price. This way, they say that the Wii makes 6 dollars, Wii Sports makes 50 dollars.

Wii Sports is shipped with the Wii here, and needs to shipping extra.

Is that possible?

Sounds like a possibility I guess, because I definitly thought it would be more than $6.

I'll believe it when Nintendo says so.

Below is the full article. I have highlighted everything that is dated (console sales numbers) or plain wrong (PS2 totals, Xbox software projections).

Thus, there is enough questionable information to wonder about the $6 operating profit per console. But since that is a bookkeeping term, it may be accuate (pay back R&D, pay PR, pay executives, etc.).

Mike from Morgantown

In Play

Wii's Future In Motion

Chana R. Schoenberger, 12.01.08, 06:00 AM EST

Better, brighter, faster games--and perhaps more profits--are in Nintendo's future

Hardcore gamers may still scoff at Nintendo's Wii for catering to casual gamers. But hidden behind its Clark Kent facade are some impressive financial muscles.

Nintendo rocked the gaming world when it brought out the Wii gaming console three years ago by turning an entirely new demographic of users on to gaming. Middle-aged and senior citizens stood in line to buy Wiis on the strength of games like Wii Fit, which audiences found more fun than workout DVDs.

To date, Nintendo has sold nearly 35 million Wiis, including 12.6 million in the U.S., Nintendo's biggest market. That's lower than Sony's (nyse: SNE - news - people ) PlayStation 2, which has sold 43 million units since 2000. But it's still pretty high for a console that, at launch, was technologically a generation behind its chief competitors, Sony's PlayStation 3, with 13 million units in users' living rooms, and Microsoft's Xbox 360, with 23 million units. This year, the Wii is expected to sell more than the best-selling PS2 sold in its best year, 2003.

Just as interesting as how Nintendo has changed the gaming world, however, has been its business approach. Nintendo sells games along the time-honored razor-razor blade model, namely pushing out the console and then enticing users to buy more games.

"More casual players aren't as likely to be attracted by hardware features, so it's all about delivering a fun, easy-to-use and addicting game experience," says Anita Frazier, toy and video game analyst at NPD Group.

Another factor in enticing those casual users is keeping its console cheap. "The key thing about Nintendo is they want their things to be at price points that anyone can respond to," says Hiroshi Kamide, director of research at KBC Securities Japan. Nintendo's strategy is to buy inexpensive components instead of making them in-house, allowing the Wii to sell for $260 while the PS3 costs $300.

But here's the winning point: Unlike its competitors, Nintendo has figured out how to make money from its console sales. Sony loses money on each Playstation sold. Microsoft (nasdaq: MSFT - news - people ) might just break even. But every Wii brings in $6 of operating profit for Nintendo, says David Gibson, an analyst at Macquarie Securities.

Nintendo also sells 60% of Wii games itself, compared with 30% for Microsoft and 15% for Sony. Wii users are expected to buy the most games this year, 220 million, compared with 120 million PS3 games and 125 million for the Xbox 360.

The top three Wii games--"Wii Play," "Super Smash Brothers Brawl" and "Super Mario Galaxy"--are all Nintendo's own titles, but the top three for PS3--"Grand Theft Auto IV," "Call of Duty 4: Modern Warfare" and "Assassin's Creed"--are all from outside developers, not from Sony.

By making most of its games itself, Nintendo (other-otc: NTDOY.PK - news - people ) risks sacrificing the chance to earn licensing fees from as many third-party developers as its competitors. It also prices games cheaper--at $50 versus $60 for the other two consoles. But so far the gambit has paid off: Wii locks in fans because many of its most popular games appear exclusively on the Wii. And Nintendo has a higher gross margin on game software than the others at 65%, compared with between 50% and 60%.

Those only-available-here games sell better than games that have been ported to other consoles because the Wii's unique features--the motion-sensor remote, for instance--make it hard to translate into other systems. PS3 and Xbox 360 games can be ported between those two systems fairly easily, but developers that want to make a game for all three consoles need a dedicated Wii team to write the Nintendo version.

Ubisoft's new "Shaun White Snowboarding" game, which shipped in late November, uses the Wii Fit motion board to simulate full-motion snowboarding; its Xbox and PS versions push online virtual snowboarding with friends.