Nintendo have stated that all Wii U SKUs are being sold at a loss including the $350 version with Nintendoland. Now, whatever end of the scale that you happen to fall on when it comes to your opinion on the power of the Wii U, we can all agree that there isn't anything substantially better than the current gen consoles in there. The controller itself uses a 480p resistive IPS screen and contains no advanced processing hardware unlike cheap sub $50 chinese android tablets (which in fact even manage to pack in a capacitive multitouch screen). How are they doing this? I'm struggling to think of any possible way that they're managing this without any creative accounting. Is the Nintendo engineering team really that behind that they're unable to compete with even the smallest electronics companies?
How is Nintendo selling the Wii U at a loss?
- Thread starter datadigi
- Start date
The popular BOM estimates go under $200, which is about what you'd expect. I doubt they're paying more than $50 to have the CPU + GPU MCM made, the RAM is highly standard and probably < $10, BR drive probably under $20, and the PCB + assembly are pretty simple. I can't see the console itself costing more than $150, and the tablet is probably under $50 like you say. Some of their component prices will be higher than Chinese counterparts due to Nintendo's tendency to source Japanese parts where possible.
This is true, I bet retail is taking $10-20 on each unit sold, then there is shipping/packaging
Also Nintendo tends to over engineer everything, which is why their consoles are so reliable (for the most part). A simple example of this is while they could use any old wire for their controllers, they always use really durable braided and cored wire, which will stand the test of time.
Sure, but retail margins are close to non-existent for gaming hardware and shipping is highly amortized with even Wii U's volume. I don't know where their factories are but you'd think it wouldn't make sense for Nintendo to not at least perform final assembly and probably plastics production in major locations in America and Europe, to save on having to ship everything from Japan. Not sure what localization costs would scale per-unit.
http://www.costco.com/Nintendo-Wii-U-32-GB-Deluxe-Set.product.100021626.html
http://www.costco.com/Nintendo-Wii-U-8GB-Basic-Set.product.100021629.html
They are clearly taking a bath on existing stock to get it moving. "No pricecut" Yeah..
http://www.costco.com/Nintendo-Wii-U-8GB-Basic-Set.product.100021629.html
They are clearly taking a bath on existing stock to get it moving. "No pricecut" Yeah..
The savings on the $300 unit is in fact $55, but yes, I think many people will do this with the expectation that they'll save in the future with the membership. That may or may not actually happen. Then they won't bother to cancel it and it'll renew over many years..
$349-$299= $50. Am I missing something?
The 8GB model is $5 cheaper.
Anyway you look at it retailers cutting the price at this point is not good news for Nintendo.
You're not looking in the right place.
http://www.costco.com/Nintendo-Wii-U-8GB-Basic-Set.product.100021629.html
It's $244.97, $55 cheaper than the standard $300 price.
On the contrary, it's great news for Nintendo if the amount Costco pays them hasn't changed..
Capitalized R&D costs??
I believe Nintendo's word that at launch, they lose $10 on the 8GB model. I don't buy that for the 32GB model however, and I think they should be able to cut those costs very quickly to get rid of that $10 loss. But it will be a while before they have cut the cost enough to be able to drop down more than that.
That said, I think they will have strong internal and external pressure to get the cheapest model to 249 as soon as possible.
That said, I think they will have strong internal and external pressure to get the cheapest model to 249 as soon as possible.