Funny I didn't know an online store had a door...anyhow I can play the speculation game as well, Walmart did this deal because they hate Japanese people apparently and love American products. Amazon sees their patriotism and doesn't want to be outdone. AMERICA!!! F**** YEAH!

All I'm going to say is that wasn't a flat out denial.

I was under the impression that video game hardware is "generally" sold at cost for a long time, and then at a slight profit, by the retailers. Their money is made off of the software.

markups are at most 15% max

It makes sense. Walmart gets people sitting with $100 gift cards, right upon Black Friday. You get them back into the store doing their Christmas shopping at Walmart because they have that card already, so the average per person might be a $200-$300 purchase on that gift card. Who thought MS was behind this? Retailers do things like this all the time near or on Black Friday, and it's typically their decision to do so.

Pretty smart move on wal-mart's part.

manufacturers take the loss, but why would retailers pay $300 for the system only to sell it at that amount and risk losing that entire $300 if it doesn't sell.  retailers could simply sell the games and make the profit from them and let someone else sell the systems.  I don't know how much they make from the systems, but they make something worth their while to carry them. that's just the way retailers work.

The Wii and 360 Arcade are big items at Wallmart... and the DS... the PS3 and PSP are looked at as a more high end item.  Walmart most likely accounts for a larger percentage of Wii and Arcade sales then it does 360 Elites and PS3s.... that's how it was explained to me anyway

If MS had nothing to do with it and it was just a motivation to make people to spend another 100 bucks at Walmart then why not extend the offer to all consoles? It doesn't add up. These sort of deals will always have some hidden monies going to and fro. It's more probable when the deal is tied to one product. If it was all consoles, much easier to believe Walmart was the sole driver.

Wow.. so much nonsense piling up..

1. Manufacturers certainly don't take the loss for mass manufactured products. For obvious reasons. Manufacturers only make the stuff they are ordered to make, they do not care what happens to the stuff once it leaves the factory. The manufacturer margin may be extremely low (in the harddisk business, usually a few dimes per hd), but to stay in business, they obviously have to make a profit.

2. Apparently consoles are sold at around cost in the USA as has been said here in various threads. Note that USA =/= the world. The markup for those consoles basically is around the same markup for home electronics in this price range (which varies from country to country). In central Europe, this equates roughly to 16-26% (obviously, this is confidential information). No retailer in Europe would sell durable goods outside these margins.

3. WalMart certainly pays way more than $100 for an Arcade (unless MS loses a sh*tload of money on every transaction - and pisses of regular shops that pay regular prices) . The arcade is basically a PS3 sans harddisk/wifi (and minus quality). So if Sony loses about $30 on every PS3 currently sold then it is easy to estimate that manufacturing an Arcade costs roughly $200.

4. It is unlikely that MS did not know about this deal and is not in some way involved directly or indirectly (they have to have all the additional consoles for WalMart in inventory in the first place). If some blogger calls MS and wants to know the inner secrets between MS and WalMart, don't expect anything but a zero-content reply. If you read content into a content-free reply, then that is the problem for the thread-opener, not MS or WalMart.