Console sales have long been a painful exercise where the manufacturer takes a monetary hit on every unit sold. They then cross their fingers and hope to make up the difference on first party software titles and licensing fees–not a bad bet considering the low cost of printing and distributing games and the high cost at the point of sale.
The gaming press has long portrayed Nintendo as the exception to this rule, but only just recently has Forbes placed its money at its media mouth and estimated the Wii’s console profit margin at $6. Given that the Wii has a comparable market penetration to Sony’s Playstation 3 and about half that of Microsoft’s Xbox 360, Nintendo must be sitting pretty on that profit margin.
This news comes at about the same time as a gamesindustry.biz observation that the Wii is the hottest thing on Ebay since the terms of use made it illegal to sell and ship fire. The console is currently asking $100 over its MSRP on the popular auctioneering site. It’s almost as though Nintendo is stepping on its own long tail by starving the American market so close to the holiday sales season.
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Tags: Forbes · gamesindustry.biz · Nintendo · Wii2 Comments
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Pretty sure the Wii’s market penetration is slightly greater than the 360′s, and about double the PS3s. As for starving the US market they have doubled their manufacturing capacity about every 4-6 months since the console released so it’s less that and more just plain not being able to keep up with the monster they have created. It is crazy that the thing is still selling for that much of a premium on ebay over 2 years after release.
You know, I normally pull those stats from whatever article I’m reading at the time, but they very rarely reconcile. I wish journalists would cite their sources when it comes to things like that.