Gizmo Cafe Blog

Nintendo Wii Already Showing Big Profits

If you’re still hesitant to call the Nintendo Wii a massive success, then recent reports of the company’s cost in producing the console may just change your mind.  In contrast to Microsoft and Sony’s growing pains, Nintendo is already in the black, reaching a profit of nearly $100 for every system sold.

Not long after Sony’s PlayStation 3 launched (just days before the Wii) we reported that the company was losing about $240 US on every console that leaped off of store shelves.  Most of that cost was from the internal Blu-ray player and the sheer power of the Nvidia graphics card, with both driving up the console’s worth.  It’s made the PS3 a real bargain – for those that can afford it. 

For those keeping track, Microsoft lost about $71 on every Xbox 360 it shipped during the winter of 2005.

Enter Nintendo, who are clearly showing their expertise at this whole home console business.  Not only is the Wii appealing to consumers for its low price, $249 US, but it’s also costing the company very little.  In fact, just $158, stemming mainly from the lack of common media features (HD games, HD movies, heck, standard DVD movies). 

However, keep in mind that the Wiimote and Nunchuk are not included in these numbers, as the study only considers the cost of the console itself.  Even then, however, it’s likely Nintendo would still show a tidy profit for every Wii sold.  Compared to the systems from Microsoft and Sony, that alone is fairly impressive.

Can Nintendo keep it up?  Microsoft now makes a profit off the Xbox 360, and Sony will likely do the same in about a year’s time (or less).  It’s up to Nintendo to keep the Wii from becoming a wham-bam-thank-you-ma’am Christmas craze.

Wii Stuff at Gizmo Shop!

Published Tuesday, December 19, 2006 12:51 PM by Brando

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Kevin said:

I've seen this report elsewhere, I think you've mis-read it somewhat. The report shows a gap between the listed parts and the total cost of $158, which we can assume includes the controllers, possibly Wii Sports too. The wholesale price is listed at just shy of $200 which means Nintendo pulls around $40 or so in profit, not $100. To get to the $250 retail there's still shipping and markup involved. Just my 2¢.
December 19, 2006 11:13
 

Brando said:

You're right, and that's why we admit the cost doesn't include the Wiimote or Nunchuk.  The profit when those are thrown in is around $40, but it's still pretty apparent that Nintendo is doing good business with this recent console.
December 19, 2006 11:37
 

Dooger said:

$40, $100. Whatever.

The point is clearly that MAKING money (times the millions of systems sold) is a lot different than LOSING money.
December 19, 2006 1:01 PM
 

snOWMan said:

I LOVE THE WII AND THE OTHER SYSTEMS SUCK I BOUGHT MY WII TODAY
December 19, 2006 11:01 PM
 

Kevin said:

An excellent point which I agree with entirely - I am impressed with Nintendo's ability to turn a profit, unlike their more conglomerate oriented competitors. I must say I think the difference in wholesale and retail pricing being what it is, there's a great incentive for retailers to push the Wii over the other consoles, especially a little later in the picture when all systems have greater availability. Are the other consoles making as much for the end seller or are they loss leaders for games there too? Good moves by Nintendo all around this time... now if they can keep the software on schedule they've got an excellent shot at top dog again :)
December 20, 2006 10:23
 

Gizmo Cafe Blog said:


We’ve been covering the launch of two consoles this holiday season.  That means some pretty in-depth...
December 20, 2006 11:28
 

xntrk said:

Kudos to all of you who are keeping up with this underdog phenomena.  Nintendo will always live on as the king to a broader market of players.  Their history alone is the proof of concept and as gaming enthusiast back in the 80s and 90s progress with time, it's always nice to come back home and have a little Mario Mayhem every once in a while. Nintendo's demographic speaks for itself and despite their Mammoth-egotistical competitors, Nintendo's release of the Wii (aka Revolution) has kept true to what is important to their fans ... Game Play!
December 21, 2006 7:01 PM
 

Gizmo Cafe Blog said:

The Entertainment and Devices division of Microsoft was the “star” of recent revenue gains.  
January 26, 2007 8:26
 

Gizmo Cafe Blog said:

After a strong holiday 2006 for the company’s newest system, the Wii, Nintendo has officially phased out the production of its GameCube.
February 23, 2007 10:40
 

Gizmo Cafe Blog said:

The rather sneaky move by Microsoft has some gamers, especially those who have modded an Xbox in the past, wondering if it’s a wise move.
March 7, 2007 9:37

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About Brando

Brando's been gaming a long time. From Atari to NES to Genesis to, sigh, Game Gear, to PC to N64 to PS1 to Xbox to PS2 to Xbox 360, he's wasted a lot of time. But, isn't that the meaning of life?