47 replies to this topic

[cannonshane]

Console makers generally do lose out on each system they make in the first sales period anyway, then the more they sell the cheaper the components become to buy so they start to make money off them, its as simple as that.

[Socalmuscle]

3DS only cost $101 to make supposedly

Not when it came out. and Nintendo admitted to selling it at a loss after the price drop. They were profiting at the higher price. but the price drop caused so much loss that Nintendo had to post an operating loss even after Iwata himself purposely took a cut in pay in order to mitigate those losses.

It was a huge matter.

New tech is always very expensive at first, no matter how good or bad it is.

Nintendo banked on a feature that is more or less "ok."

Edited by Socalmuscle, 01 October 2012 - 04:50 PM.

[Tricky Sonic]

Nintendo has made profit on every system they every made - they won't stop that trend now.

[Socalmuscle]

Nintendo has made profit on every system they every made - they won't stop that trend now.

They already have.

But the wording is tricky.

They'll profit off wii u hardware. Just not right away.

Similar to 3ds. But not as bad.

[Goose]

Nintendo has made profit on every system they every made - they won't stop that trend now.

This is true except for the one outlier. The PS720 will probably sell at a loss though but not by much (recession/losses on the PS3/ exc...)

[Desert Punk]

Remember these products are actually normally much cheaper to manufacture than stated but Nintendo's own costs like running the corporation and all its employee's etc is a huge financial burden. A product may cost $80 to make but Nintendo may have overheads that add maybe $40 to each product just to pay for costs with creating that product in the first place. If you look at a laptop you can buy a basic laptop with a good screen, pcb, keyboard, large lithium battery, hard drive, psu etc and have a licensed operating system but the manufacturer of that laptop may not have much in the way of R&D as its using off the shelf components. That laptop may be sold for £300 so at the same price as a wii u premium package and appear to represent greater value for the technology purchased even though that specific laptop will not sell in the same numbers as the wii u. However it doesn't represent the huge investment Nintendo has made in the wii u. I personally think the manufacturing costs for NIntendo products are vastly exaggerated but when you factor in Nintendo's own costs in addition to that, they are likely pretty close I would of thought.

[Socalmuscle]

While those numbers don't make sense,

The idea of payroll and the electric bill ate already factored in.

Also, much of that gets included in the R&D budget in terms of development. From there, the components are finalized and a sweatshop (like Foxconn...) is then contracted to manufacture for a dirt cheap labor cost.

Nintendo spends money developing the system. Then buying components. Then manufacturing.

They also Have to pay the marketing people, the administrative folks, the IT support, the programmers, etc. etc.

That's why taking a loss on hardware is a risk. One they've mitigated somewhat with the Japan pricing.

But Nintendo makes insane money on their games. Most of their games are multimillion sellers, and they sell for the price that others with much larger budgets do.

Now, they have an interesting strategy of making low budget games like Mario and larger budget titles to come. So they'll balance out. Plus, high budget Nintendo games with next gen graphics? Hot cakes.

They'll also stop taking a slight hardware loss early on. Factoring a hardware loss for a year, versus profit over the next 5 years plus thereafter, and it's easy to see how it's not an issue at all. This isn't an issue of Sony using all new tech for the sake of using all new tech (with no benefit in terms of games over its competitor, 360). There was no way Sony was going to get out of that hurt.

Nintendo was smart to have so many launch games. It will far more than offset the small hardware loss at the outset. In spit of that, they'll be in the red big time out of the gate.

[Alianjaro]

Pay attention.
I'm using logic.

All that's been said about the optical drive is that it won't play DVD or Blu-Ray movies, and it will read discs in a proprietary fashion.
By using logic, you can check the specs Nintendo did give against all other optical drive technologies.
Blu-Ray is the only one that matches up.
Nintendo can not logically afford to create their own optical standard alone, and in so little time, without a single word about it until the console was revealed.

LOL sad how you are being misunderstood by a lot of people! I understand what you are saying though!