Author Topic: Wii console sales give retailers a higher profit margin than competition (Read 6677 times)

GoldenPhoenix · « **on:** October 16, 2006, 11:12:36 AM »

Supposedly this is what Comp USA will get profit wise for Xbox 360 and Wii. It doesn't list PS3, nor am I sure this is legit but interesting none the less. So I guess when we try to determine the "worth" of the Wii as it pertains to development costswe should look at the 237$ figure and not the 250$ one.

Kairon · « **Reply #1 on:** October 16, 2006, 11:38:41 AM »

Bah.

~Carmine M. Red
Kairon@aol.com

Arbok · « **Reply #2 on:** October 16, 2006, 12:29:37 PM »

Quote
Originally posted by: Kairon
Bah.

Insightful...

Anyway, if true, this sounds really good. One thing that the Gamecube suffered from was the retail push, which Microsoft had in spades. In fact, there were tons of stories told of employees at outlets like EB convincing customers out of buying a Gamecube and toward an Xbox. Penny-Arcade has a pretty good comic about that "time" in fact:

http://www.penny-arcade.com/comic/2001/09/21

So this can only be a good thing for Nintendo.

NinGurl69 *huggles · « **Reply #3 on:** October 16, 2006, 12:30:42 PM »

That's nice and dandy, but Nintendo Power still sucks. Nintendo should focus on disbanding the outfit or actually bundling cool stuff with the mag.

EFFING STRATEGY GUIDES DON'T COUNT FOR ANYTHING

Arbok · « **Reply #4 on:** October 16, 2006, 12:41:05 PM »

Quote
Originally posted by: Professional 666
That's nice and dandy, but Nintendo Power still sucks. Nintendo should focus on disbanding the outfit or actually bundling cool stuff with the mag.

EFFING STRATEGY GUIDES DON'T COUNT FOR ANYTHING

You mean like the "Smashing Live" CD? I wish they would toss in soundtracks and what not more often, or just offer "demo" discs with the subscription to make it more worthwhile (wonders though what Nintendo Power has to do with the topic in question...).

Smash_Brother · « **Reply #5 on:** October 16, 2006, 12:47:42 PM »

If NP had demo discs, I'd subscribe, though with WC24, that might be a non-issue now.

couchmonkey · « **Reply #6 on:** October 16, 2006, 01:21:51 PM »

Derailathon!

I think this is good news. Sure, as a consumer I'm all like, "give me DEALS" but I see where this benefits Nintendo. And what's good for the goose is good for my stock portfolio.

Crimm · « **Reply #7 on:** October 16, 2006, 03:59:49 PM »

Quote
Originally posted by: Smash_Brother
If NP had demo discs, I'd subscribe, though with WC24, that might be a non-issue now.

If they had demos, or soundtracks, or hell even stuff 1/5th as cool as Japan gets I'd subscribe.
I don't know if WC24 takes out the need for demo disks. 512 MB might not be much when it comes to demos.

Smash_Brother · « **Reply #8 on:** October 16, 2006, 04:12:27 PM »

That is true, but personally, I plan to connect a massive USB device to the Wii, post haste. You can get a 200GB drive for around $150 these days.

I'm sure they'll have the ability to download demos for both the Wii and the DS.

Ceric · « **Reply #9 on:** October 16, 2006, 04:39:12 PM »

Hey If Nintendo Power would go back to what it was around episode 39 or so where they had no advertisement(In the traditional sense), Nester, 2 Game related comics, and Poster. Yeah I be all over that no problem. When they ditched the comics and became another magazine full of ads I stopped reading.

I think this is a good strategy for Nintendo. I also thought that the article was interesting. Getting the Retailers to want to push your product lends to having less out of you advertisement budget and more variety in advertisement due to the retailers wanting to differentiate themselves for the sale.

Smoke39 · « **Reply #10 on:** October 16, 2006, 06:27:48 PM »

Every once in a while NP has a cool poster. Like that one a while ago with one of my favorite concept drawings of TP Link. <3
And sometimes they have cool articles about developers, like that one where every month they had someone from the TP team blather for several pages about their job at Nintendo.
But neither of these are very frequent, so I let my subscription expire again. :<

trip1eX · « **Reply #11 on:** October 16, 2006, 07:14:40 PM »

The retailers basically aren't making money on any of the consoles if those numbers are true.

Strell · « **Reply #12 on:** October 16, 2006, 07:52:45 PM »

So it's profitable for Nintendo and gives bigger profit to retailers?

You know, there's something wrong or off here, but I am not in the position to speculate upon it effectively.

TrueNerd · « **Reply #13 on:** October 16, 2006, 08:48:12 PM »

Two ways to look at this.

One way is it means retailers will hopefully try and push Wii's to people since they make more off of it. The more people that have it, the more games that will be made for it. Good for us.

The converse of that is wouldn't more people simply want it if it was $50 cheaper?

GoldenPhoenix · « **Reply #14 on:** October 16, 2006, 09:47:00 PM »

Quote
Originally posted by: Strell
So it's profitable for Nintendo and gives bigger profit to retailers?

You know, there's something wrong or off here, but I am not in the position to speculate upon it effectively.

Well we have to remember it really was never confirmed that the Wii was profitable for Nintendo, Reggie's statements could have been interpreted differently, maybe in reference to the cost of materials without taking into account the money that is lost on the bundled game. Nintendo 64 seemed to be profitable for Nintendo though, and I have no doubt that retailers also made a small profit as well, yet no one complained. There is absolutely nothing wrong with this in a business sense, it happens in about every technology where the manufacturer makes a profit and the retailer does as well, ESPECIALLY for companies who have products that are trying to diffentiate themselves from the competition which required a greater investment in R&D.

GoldenPhoenix · « **Reply #15 on:** October 16, 2006, 09:55:11 PM »

Quote
Originally posted by: TrueNerd
Two ways to look at this.

One way is it means retailers will hopefully try and push Wii's to people since they make more off of it. The more people that have it, the more games that will be made for it. Good for us.

The converse of that is wouldn't more people simply want it if it was $50 cheaper?

Perhaps at 50$ cheaper NIntendo would be taking a 30$ loss, would that be good? As of now we don't know for sure how much a Wii costs to produce, there are so many variables this time around than before. Not only is the Wii more powerful than the GC but it is also vastly more condensed, it also includes built in Wifi along with the controller which I have no doubt in my mind is more expensive to produce than the GC's. Not only that but you get all the other functions with Wii that GC did not, so once again I think the price is justified.

I also want to throw this out, how many of you have iPods? Do you honestly believe they cost close to 200$ to produce? There is no way they cost that much, and guess what the technology is not that advanced in the 200$ models, so do you feel "cheated" if you own an iPod, or is there something more to it that gives you "value"? Like the iPod originally did, Nintendo is trying to do the same with Wii which is to create another market within the gaming industry through differentiation (iPod was quite unique at the time) and also like iPod these fights are won through abstract value along with its uniqueness to hopefully create a new market for others to follow suit. Now I don't know what the materials cost in the original iPod but I am willing to bet they made profits on each system sold yet people still bought them even with all the other competing digital devices which may have done more. This paraells the Wii in that it is competing within the console industry but has done something different to set it self apart hoping that this new take on gaming will create a new market within that will hopefully grow.

thejeek · « **Reply #16 on:** October 16, 2006, 11:11:37 PM »

Quote
You know, there's something wrong or off here, but I am not in the position to speculate upon it effectively.

Yes - they're bribeing retailers with our money! The horror!

Realistically, how else are they gonna persuade shops to sell it - shops aren't in the business of selling items at a loss, on the whole.

Ceric · « **Reply #17 on:** October 17, 2006, 06:44:54 AM »

iPod

Notice that the lowest end Video iPod costs only a 99¢ less than the Wii. I know for a fact that they must make a lot on those iPods. None of the technology in them could be considered cutting edge or R&D intensive anymore. Apple has always made money off of their hardware. I know for a fact that retailers more then likely don't get 5% from Apple. There stingy like that. Also they have locked you into iTunes to get your content guaranteed. Almost no one gets a piece of the pie except Apple and the content creator out of that.

So we established that Apple has a similarly priced product that doesn't offer the same amount of features. We've also established they are targeting two separate markets. Apple is keeping more of the revenue generated from there product then Nintendo, retailer cuts on content and hardware, including WiiPoints (Which I hope come on cool collector cards). With Nintendo you receive roughly 5 hours of content, I figure it take at least an hour on average to get bored with each WiiSport game. I'm not sure how much comes with an iPod really. I know some does at least. You get little games as a bonus on your iPod and on your Wii you get Weather, News, and Internet Access, at the moment. Which is the better deal?

If you are looking for a portable Music Player: iPod
If you are looking for a game console: Wii
If you are just looking at features versus price: Wii
If you are looking to make the producing company the least amount of money with your hardware purchase: Wii

Thats how I think it stacks up. So Who here thinks that an iPod is worth the price and that the Wii isn't?

couchmonkey · « **Reply #18 on:** October 17, 2006, 06:55:06 AM »

I started out arguing about the price, but that's so played-out, I'll just skip to the point:

I'm not crazy about the price, but Nintendo offering more profit per unit to retailers is a good thing, business-wise. Retailers will be more likely to buy systems, and they'll push the product harder because it makes more money. I'm glad to see Nintendo taking steps to make everyone happy, and I hope that this same type of thing is going on with third party developers and publishers.

PS: Interesting you should bring up iPod, Ceric, I was considering using it as an example of a high-priced product that sells like crazy anyway, before I stopped arguing about price.

Ceric · « **Reply #19 on:** October 17, 2006, 06:58:00 AM »

You know I wonder what ATI/AMD and IBM cut is? Nintendo normally gives them a cut of each game sold and each console sold plus what they pay for parts, which is lowered because of those.

Smash_Brother · « **Reply #20 on:** October 17, 2006, 07:57:06 AM »

FYI, the Wii display is being set up at THE VERY FRONT of my local GS, not the very back like they typically do for Nintendo hardware.

Coming from an age where the GC always, always sat at the back, I'm glad to see such Nintendo enthusiasm.

Ceric · « **Reply #21 on:** October 17, 2006, 08:04:30 AM »

You wouldn't to happen to know when as well Smash... You be holding out on us?

JonLeung · « **Reply #22 on:** October 17, 2006, 08:06:44 AM »

It could also be because there's probably more room up at the front, and the spectacle of someone playing would entice people to come in regardless.

Smash_Brother · « **Reply #23 on:** October 17, 2006, 08:42:03 AM »

Quote
Originally posted by: Ceric You wouldn't to happen to know when as well Smash... You be holding out on us?

For Wiiosks, I've heard the end of Oct, but that's just through someone I know who works at GS.

News:

Author Topic: Wii console sales give retailers a higher profit margin than competition (Read 6677 times)