So if the Wii was originally sold at profit and two years later its at $6??

Seems hard to believe.. specially with this comment

"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."

???

It just seems wrong all around.. I'd love for Nintendo to call BS on the report and release an official statement

But every Wii brings in $6 of operating profit for Nintendo, says David Gibson, an analyst at Macquarie Securities.

That means at the end of it all for the company meaning after shipping costs included.

As quoted already:

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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.
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This article is just made-up bullshit. The numbers aren't correct at all.

Depending on how much profit they made in the beginning, their current profit may be much lower even with cost savings achieved on production. For each Wii sold in the US/Europe, Nintendo now receives 15-30% less than they used to. It's almost like they made a price cut.

That said, this article doesn't look reliable at all.

The Wii is manufatured in China.  If at launch the Wii cost $180 to make, that was 1,420 Yuan.  In today's exchange rate 1,420 Yuan is $212, and it would seem like a lot of the profit is gone.  But Nintendo works directly with Chinese manufacurers, so at launch the Wii cost about 21,000 Yen, and at today's exchange rates 1,420 Yuan equals 19,300 Yen.  The manufacturing costs have gone down for them even without any added efficiency due to cheaper parts and increased production. 

The price has apparently gone down faster than the cost savings due to the weakening dollar.  No wonder Nintendo has been unwilling to drop the price here.  I highly doubt that they only make $6 per console though.

You don't know what currency production is paid in. It could be a mix of currencies too, with different suppliers charging in different currencies.

The best way is to look at the impact on their profits (which includes software of course). The impact has been substantial, the same with Sony.

The 80GB PS3 actually does only cost about $300 to make (remember it has 65nm everything, and Blu-Ray has dropped dramatically in price -- it was at $400 before the 65/65 switch and blu-ray drops), but the Nintendo cost-to-make number seems way too high.

:-O

nintendo has been replacing the cheap internal parts with gold flecked parts, and diamond encrusted cpus 

Good thing Amazon sold me the 80 GB PS3 at cost by giving me a $100 rebate over MSRP.

Why can't Nintendo shrink everything down and make the Wii cheaper as well?  They could probably make room for a hard drive in there.