my thoughts exactly.
Speculate Wii's BOM
- Thread starter Shifty Geezer
- Start date
my thoughts exactly.
Yeah, but the design of the Wii looks nothing like a toy, or maybe children have more "avant-garde" tastes these days and i'm just too old to tell the difference ?
Not that simple. Nintendo's price point could be primarily market dirven with demand being higher than supply for 2006 at the $249 price point, which is also notably cheaper than either of the competition.
So my question: If Nintendo can make a profit on < $100 GCN hardware, what constitutes a $100-$130 increase in BOM? (And as general new technology doesn't necessary scale linearly in cost, i.e. after 5 years of cost reduction on Console-X you may be able to build a faster console at the same or lower price than a shrunk Console-X, thus things like 4x the memory may not cost 4x as much).
Um, if you're embedding 88 MB of RAM, that's going to raise your chip fab cost WAY up. So no, $50 for CPU, GPU, and RAM is too cheap. You still have all the ports and WiFi listed at $0. Don't forget that using WiFi and Bluetooth includes licensing fees to the IP owners. Might want to throw in a bit for the packaging.
According to Nintendo, the $99 Gamecube was being sold at a small lost. Have fab costs gone down since 2003? That sort of thing tends to bottom out, you know.
According to Nintendo, the $99 Gamecube was being sold at a small lost. Have fab costs gone down since 2003? That sort of thing tends to bottom out, you know.
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Yeah, but the design of the Wii looks nothing like a toy, or maybe children have more "avant-garde" tastes these days and i'm just too old to tell the difference ?
But how does the austhetics change who a large portion of their market will be? Nintendo learned last time that kiddie lunchpales won't necessarily appeal to all demographics. Since few children buy consoles directly or make decisions based on casing style (like some adults would in consideration of matching and theming their AV setup) creating a design that is appealing to a wide cross section of consumers is important. Going with simple design may not incite lust in children, but it also won't raise disdain from adults. Also, all things are relative: Which looks like a machine children should play with: Wii, PS3, or Xbox 360?
We've got a fair bit of info. Processor counts are proportional to die size. We have a die size for the CPU, and we can guess a die size for GPU based on Flipper that we know it's a derivative of. Okay, we're not anywhere near accurate, but we can get a highest possible BOM, no? Can you see any reason why Broadway and Hollywood combined would cost more than $50?
In my intial post I did quote $30 for odds and sods. And in my last post, there's $70 worth of extras that can be added before hitting my conclusion that they're getting at least $50 profit ($130 for chips+drive+controller, $250 pricepoint).fearsomepirate said:
If I reverse engineer your costing list, you say 1,3 and 13 are accounted for and the rest comes to $28, right? So...
2. 88 MB 1T-SRAM
4. 512 MB flash memory
5. 4 Gamecube controller ports.
6. 2 USB ports.
7. 2-way digital/analog A/V port.
8. Higher quality, glossy case (incl mobo, heatsinks, and fan).
9. PSU
10. Stand
11. 1 SD card port
12. Connect24 service
14. Wii Sports
15. WiFi
16. Bluetooth
17. Sensor bar (don't forget diodes, housing, cable, fab cost, and any silicon needed)
is $30 worth, which leaves $220 to cover
1. Gamecube-ish CPU & GPU
3. Dual-format slot-loading drive
13. 1 Remote + Nunchuk
Either there's some very expensive components there, or Nintendo are definitely on for a profit.
The only area of cost I can appreciate could be covering software developmentfor networking and various features, but typically these costs are born out in the products being sold over them. I think it more likely Nintendo invested their existing cash with a view to returns on downloaded content, rather than on a view to charging that into the intial purchase. Well, you could count it as charging that into the final product if you consider $50 'profit' for the hardware, as all profit is reinvested. It depends what you measure by profit! In this case, extra earnings above what it cost to create and release the hardware.
OK, I'm probably wrong on that.
If we know that at $99 the Gamecube is sold at a small loss, maybe we can work up from that?
Since retailers and the government don't care about the loss Nintendo is willing to absorb, it's leaving the factory at no more than $80.
What's the difference between a Gamecube and a Wii? Controllers ($50?), sensor bar ($20?), new chips (okay, $20 over the 'cube, no more), slot-loading 120 mm vs pop-open 80 mm optical drive (about the same), Wi-Fi & Bluetooth (max $10, USB wi-fi and bluetooth dongles are a dime a dozen...), 512 MB flash RAM (max $10, 512 MB of flash in the form of a memory card, e.g. SD, are $15 at retail). Adds up to $110.
Sounds about reasonable to me - something like $20 for the retailer, and the rest is "profit" for Nintendo, going towards research costs, free online, Wii sports, marketing etc.
Nintendo makes the most sturdiest systems out of the bunch, and they last far longer than any other competitor.
Retailers making money on the hardware would be a first.
nothing happened. just that as we're trying to pull a BOM out of thin air here, i don't think that the exact type of that 'external' 64MB pool would make such a difference here anyway. *shrug*
Here's what Iwata himself said on the pricing:
http://www.beyond3d.com/forum/showpost.php?p=830972&postcount=263
From that quote it seems to me they're pricing as low as possible.
http://www.beyond3d.com/forum/showpost.php?p=830972&postcount=263
From that quote it seems to me they're pricing as low as possible.
Indeed, but then there is something very strange with the price.
Wrong. By the way, 14 x 2 = 28, not 30. What I said is that even if the rest of the parts only average $2 apiece, that's $28 left to cover, which your $130 estimate totally neglected. However, I think estimating an average of $2 apiece for each of those is absurdly low.
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Sounds that way, but then wouldn't our BOM estimate get closer to that $250 than I'm getting so far?
Is there anything particularly wrong with me rounding up? You wanna argue over $2??
Er, yes, I know. I spelled out exactly what the estimate covered
CPU : $10 - estimate
GPU : $40 - more of a guess
DVD : £20 - estimate
Controller : $60 - retail price
Total for above - $130
And earlier I mentioned $30 for the rest, no? And that $30 estimate is similar to your $28 'estimate'.
For sure, $2 a piece is bound to be wrong. But look at it from the flip side (which you missed last time I tried). The $130 estimate above is the basics, right? That leaves $120 to cover the rest of the costs. If we accept that your list of items covers $120 worth of expenses, how would you divide that up amongst the components? A lot of those are going to be low cost. eg. The Sensor bar is 8 diodes. There's nothing else to it. The jiggery-pokery is in an IR camera at the front of the Wiimote.
The 'big ticket' items in your list I count as the RAM, which we should be able to guess at but I was really hoping someone with more knowledge would have comented by now!, PSU?, and Wii Sports. The rest certainly looks to me like <$5 components.
But is it a good estimate? I'm not convinced of that.
Except $250 is the MSRP. Retailers pay $237.50, which makes it sound like Nintendo is selling these things FOB destination (seller pays shipping).
But you have quite a few of them. And fab costs may not always be less than or equal to the cost of clearance goods on pricewatch.com. In the supply chain for we have:
1. Individual part fabrication costs.
2. Shipping costs.
3. Assembly costs.
4. Packaging costs.
5. Licensing costs.
None of those are negligible, and depending on how they're done, they can really add up. Taking everything into account, $237.50 being Nintendo's selling price seems not too far out of the question.
I dunno. I don't see many people contributing to guesses though
. What do you think's wrong with those estimates?Thank you, im glad someone finally posted how much retailers were making in profit from the 250 price tag. On top of that nintendos profit is really not as large as people are estimating. I recall reading that it was somewhere around the $10 mark
Furthermore i can't believe people are trying to base their estimates of nintendo making a small loss when they first dropped the GC price to $99 (if that is even true). Around about this time last year Nintendo posted reduced profits. Why?? The strong sales of the DS were unable to cover the deficit left by the reduced sales of GC.
My initial guess is that the cost of the machine minus nintendo and retailer profit and wii sports is between 190 - 200 including the controllers. Because the controllers aren't being sold separately i dont think their value in the package would be close to $60 retail that they would cost separately. They'll also more likely than not, cost less than the retailers price.
I really dont think anyone seems to be considering the possibility of the software that comes packaged with the system as a cost either. I mean the Mii stuff and the photo/video editing and some of the other built in online/offline components that you can't exactly extract money out of their use as they are being sold and used as "free"
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Retailers do make a small amount on the hardware.
I think the 399 Xbox wholesales for like 384. It's not a lot but that type of thing.
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