iEntry 10th Anniversary Home Reviews




Nintendo Making Bank On Hardware

Money

Like the crows say in Dumbo, ‘I dun seen about everything’ , is how I felt after reading this article by Forbes.com. It’s the usual ‘Why The Wii Is Successful’ piece, but one interesting statistic popped out.

Nintendo is not only selling the most consoles of the big three (Nintendo, Microsoft, Sony), they’re making money off those consoles as well. This is a rather amazing statistic because generally speaking console makers lose money on hardware. Traditionally, the lost money on hardware is made up through accessory sales and software. Nintendo doesn’t have to worry about that route as they’re making $6 a unit for the Nintendo Wii.

So, let’s do some numbers. $6 x 35 million units sold = $210 million. While these are just analyst numbers, they are more than likely accurate. Because all you really have to do is figure how much the hardware components for putting together a Nintendo Wii cost.

It’s not hard to see how Nintendo is able to accomplish this feat. While Microsoft and Sony completely bank on technological behemoth hardware specs, Nintendo has tried a different approach. Lessen the specs, power wise, and make their console more readily usable to a larger group. Needless to say its paid off, as $210 million is quite a bit of money. That’s not even tallying up software, and accessory sales which have even a better margin than their hardware.

Bet you wished you would have invested in Nintendo stock during the Gamecube era? I know I do, I was just too poor then.

2 Comments

  • 1
    December 2, 2008 - 11:04 am | Permalink

    Cha ching!

  • 2
    December 9, 2008 - 2:57 pm | Permalink

    The Wii is more about playing in REAL space rather than just VIRTUAL space, so they are probably making a lot of money on the extra controllers and equipment for all the various PHYSICALLY interactive games.

  • Leave a Reply