The financial times just ran an interesting story, which said:

"Nikko Citigroup games analyst Fukuda estimates that gross profit accumulated for every Wii console sold in Japan equates to 1,500 yen ($13), while in the US and Europe the figure is much higher due to greater retail prices. In the US and Europe, Fukuda estimates gross profit per console stands at 5,600 yen ($49) and 8,500 yen ($74) respectively. "

http://www.next-gen.biz/index.php?option=com_content&task=view&id=7180&Itemid=2

Basically, Nintendo is estimated to make...

$13 profit for each Wii sold in Japan (no pack in)

$49 profit for each Wii sold in the Americas (pack in allows higher price)

$74 profit for each Wii sold in Europe (pack in allows higher price)

Nintendo is expecting to ship 16.5 million Wiis from April 1 2007 to March 31 2008, on top of the 5.84 million shipped to retail by March 31 2007.

Lets say profit was ~$25 on average through 5.84 million/March 31 2007.  Wii hardware resulted in $150 million in profit.

Now, if Nintendo ships 5 miillion units to Japan, 6 million units to the Americas, and 5.5 million units to Others this fiscal year you get...

(6 million x $49)+($74 x 5.5 million) + ($13 x 5 million) ...$766 million in profit.  Not bad.

I don't think it is impossible for Nintendo to ship 18 or 20 million Wiis either.  Add an extra 1 million shipped to each region and you get another 136 million in profit.

Looking back at Nintendo's forecast shipment data, expectations are for 26 million DS units.  DS has been out for years now, so profit is likely $20 or more per DS - which adds at least another $60 million in profit.

This means Nintendo likely will make ~$1,000,000,000 in profit just on hardware.

Looking at software expectations in Nintendo's financial report, Nintendo expects to sell 212 million units of software.  It is quite possible Nintendo will beat this projection - since the Wii hardware forecast in June accompanied no software boost.  At $10 profit per piece of software, Nintendo would add another $2.12 billion in profit.  Note this may not include virtual console sales.  It certaintly does not include accessories or 3rd party liscencing fees.

Overall Nintendo expects ~$3,000,000,000 in profit, but I predict something more like:

Wii:

hardware shipped: 6/7/6 = millions   (6)($13)+(7)($49)+(6)($74)

DS:

hardware shipped: 30 million x $20 

Total software shipped: 

software: (250 million)($10)

Accessories + Liscencing profit: $500,000,000?

Estimated Profit: $60,000,000 + $500,000,000 + $2,500,000,000 + $865,000,000 ~

Estimated Profit: $3,925,000,000

So overall, I expect Nintendo to beat their own projections for profit.

I think you may be a bit on the low side for software profits and like you mentioned accessories which are extremely profitable. 3rd party licensing is also a pretty big number. Although I think you're margin is a bit high for the European consoles, since there are things like VAT and other things that drives up the cost.

Overall, good attempt. Nintendo's estimates have always been overly conservative, so beating them is not a high hurdle. One of the biggest factors will be the value of the Yen, but that affects Sony just as much.

This is an oversimplification based on a series of assumptions.

Source, if they did that it would almost equal the profit gained by the entire Sony Family (as per SDF) since their inception in just one year.

of course it is an oversimplification. i just wrote it in five minutes.

Can you compere this to Microsoft and Sony? It will give a much more sight if this is very very good for Nintendo

Ofcorse he is simplifying it.  He is writting it so that we can understand it.

If Nintendo has all this hard cash around then why don't they spend it and get good third parties under the Nintendo Name. Do they not care that Sony and Microsoft have all the big third party games. Do they not care that their system cannot match what the PS3/360 bring to the table. Do they not care about their fans and want to bring big games to the wii.

My god there profits are huge ... and if we think that a couple of years ago Nintendo was estimated at only slightly over 2 billion $ ... man times change :( ( sad for Sony , happy for Nintendo that is ) .

There's at least one factual error in there... That 212M software forecast includes 3rd party software.

How can you make a guess like $10 per software sold? Nintendo's margin on different games probably varies between $30 (a $50 game with no advertisement or development costs attributed to 2007) and less than $1 (a third party budget DS game MSRPing at $10). If your $10 estimate has even a $2 margin of error, software profits could be between $1.7B and $2.55B on those 212M units.

These numbers are just empty.

BTW, Wolfenstein, these numbers are INSANELY good for Nintendo. Microsoft and Sony are losing billions in the videogame industry right now. And no one has ever made even 2B in one year in the videogame industry, let alone 3B or 4B.

What did Nintendo make in 2006?