Wii U hardware discussion and investigation *rename

[liolio]

Do you actually believe they're selling the console at a loss?
Or that they would be losing money if they sold the "Premium" version for $250?

They're not. The BOM in this thing should really low. One can tell from the tiny ICs made on an old process, the small-ish screen with a really low resolution, the single-touch resistive panel (there are multi-touch capable resistive panels BTW), the tiny heatsink, the tiny fan, the license-less optical drive, the smal amount of slow mass storage, the tiny battery in the controller, etc.

Any claim from NIntendo saying they're losing money on each Wii U sale is either complete bull or they're counting with R&D, marketing and distribution costs (which makes it a completely bull statement either way).
There's no way the BOM on that console is over $200.

Well they stated that they make money once they sold one game hence that is why everybody think they are just below the "grey" on the system alone.
And I agree, that level of performance should be manageable for a system either cheaper or that is not sold in the "~ grey" (slightly below it seems).
But look at the 3ds, they said they loose money when they drop it to 150$, on the other hand Archos ships a superior product (imho not that disputable even though content is not there...) for 150$ and they are making money (few but their business is selling hardware, margins are low on those competitive markets).
Truth is not all companies are equal at designing "things". Quiet a few pages ago, I was wondering about how a company like Nintendo that release few products (if you compare to many CE company that ship many laptops, tablet, etc on a yearly basis) can remain competitive and maintain the level of competences necessary within its team. It's a business school case.
I'm not sure they can and possibly that what we are seeing now.
The US CEO stated (Aime something don't remember is full name) that based on their estimations the system should keep up for quiet a few years. Is he lying? Possibly, but having worked in big companies (even though at not relevant positions) I can confirm that big companies can be everything but efficient. The other option is that he is not lying and the execs got fed not "up to date"/accurate information. The result is obvious, the system doesn't keep up but more than that it may never see a port of the FB2 engine. That is bothering for them, and I'm not sure that, if he were allowed to state his mind freely, Aime would be particularly happy about that. I'm not sure either that "in private" he would put the burden on EA for that decision, but as the CEO, in public relation, poker face rules.

The thing is that the system is not that cheap to develop for, as possibly FB2 could be ported, same for the Metro engine, but in both cases with quiet some rework and trade off. Both imply extra work as you don't want to ship too sucky products and get hammered by the gaming press and the comparison made between platforms which has now become a standard (and that is new those tear down on a pretty technical basis of games running on different systems didn't exist before this gen or on a completely different scale).

The system would be cheap to develop if anything that run on a ps360 or a low-mid end pc runs without much efforts on the system (thus leveraging efforts made on other platforms with higher user base for cheap). That is not the case.

 

[Shifty Geezer]

Do you actually believe they're selling the console at a loss?

Looking at the hardware, no. But Nintendo have gone on the record saying they do, and they certainly aren't pricing themselves competitively. If they have to drop their price to encourage sales like 3DS, they'll have effectively told their shareholders that they are losing lots per unit. If that's not the case, they would have been better off keeping their mouths shut.

I'm decidedly unclear on what the costs of Wuu is (BOM is the total picture).

 

[TheLump]

Looking at the hardware, no. But Nintendo have gone on the record saying they do, and they certainly aren't pricing themselves competitively. If they have to drop their price to encourage sales like 3DS, they'll have effectively told their shareholders that they are losing lots per unit. If that's not the case, they would have been better off keeping their mouths shut.

I'm decidedly unclear on what the costs of Wuu is (BOM is the total picture).

Its difficult to ascertain the cost of the product as we only have the retail price.

Selling at a loss means Nintendo are selling the units to retailers for a loss.We need to know what those retailers are paying before making any assumption imo.

Guestimation time: So lets say the basic WiiU on Amazon, sans VAT is priced at £199. Lets be generous and say Amazon markup by 10%, which means they paid around £180* for the product. If Nintendo are making a 'small loss', is it safe to assume that Nintendo probably spend about £190 building each WiiU? If so....

Does anyone have a breakdown of what they think all the components in WiiU cost wholesale to Nintendo?

I'm not denying that it might be true, I'd just like to know the figures which backing up claims that "there's no way it's sold at a loss" etc. Again, no saying its untrue - I just like to know the facts and this forum generally has them


*I'm ignoring shipping costs etc

 

[Azgoodazdead]

If the ports on the Wii U have been a bit rushed I would say, then doesn't that already tell us that hey the Wii U can possibly handle today's current games like Assassin's Creed 3 and Mass Effect 3 almost no problem? Makes me believe that the Wii U probably has more up it's sleeve than what we know it can really do. PS3 had horrible ports when it first came out because of the Cell processor. Now, games looks absolutely better.

Also, I hear the Wii U could do native 1080p resolutions so I am glad to hear this. Thx for the replies back, btw.

 

[This Way Out]

The thing is that the system is not that cheap to develop for, as possibly FB2 could be ported, same for the Metro engine, but in both cases with quiet some rework and trade off.

Doesn't the latest Need for Speed run on FB2? That's heading to the Wii U next year some time and that should give us a glimpse of how it performs. And if Critereon have been tasked with the porting duties, they did the Vita version afterall, then I suspect it should give us a good idea of how viable to engine is on the console going forward.

Its difficult to ascertain the cost of the product as we only have the retail price.

Selling at a loss means Nintendo are selling the units to retailers for a loss.We need to know what those retailers are paying before making any assumption imo.

Guestimation time: So lets say the basic WiiU on Amazon, sans VAT is priced at £199. Lets be generous and say Amazon markup by 10%, which means they paid around £180* for the product. If Nintendo are making a 'small loss', is it safe to assume that Nintendo probably spend about £190 building each WiiU? If so....

Does anyone have a breakdown of what they think all the components in WiiU cost wholesale to Nintendo?

I'm not denying that it might be true, I'd just like to know the figures which backing up claims that "there's no way it's sold at a loss" etc. Again, no saying its untrue - I just like to know the facts and this forum generally has them


*I'm ignoring shipping costs etc

Well, just tp throw some more numbers your way, a couple of people in the US have had to go out to Nintendo to get replacement Gamepads and are being charged $85 for the priveledge. So it makes up less than 1/3 of the retail cost over there.

Also, in terms of wholesale cost, I'm not sure Amazon are getting them that cheap. Hardware is typically sold at a loss by retail outlets so they can gorge customers with additional games, and more importantly, accessories that carry much higher markups.

I've come across one wholesales price list online that was selling Wii U Basic at £254ea per 50 and £252ea if bought by the hundred. Premium were £306ea for 50 and £304ea for 100. Those prices include VAT though.

Still, doesn't leave too much room for maneuver by retailers including those with superior buying power who are probably getting slightly better deals.


And that was my first post of hopefully many more - looking forward to chatting and learning.

 

[BRiT]

Enough with the blind beliefs and unsubstantiated feelings. Those will put you on the fast train to a posting vacation.

 

[liolio]

Doesn't the latest Need for Speed run on FB2? That's heading to the Wii U next year some time and that should give us a glimpse of how it performs. And if Critereon have been tasked with the porting duties, they did the Vita version afterall, then I suspect it should give us a good idea of how viable to engine is on the console going forward.

I'm not aware that Criterion would have used FB2 for their last Need for speed, need for speed: most wanted 2012. I have read nothing that would let me think that they do (quiet the contrary).

Actually a few days ago I read that the team in charge Dragon Age 3 moved to FB2 but that seemed to be a first example of deployment of FB2 outside of Dice within EA.

I would expect Criterion to continue using their Chameleon engine, which is quiet optimized and successful at what it does (by the way NFS:most wanted 2012 runs on the aforementioned engine).

In any case comparison will be none the less interesting.

 

[This Way Out]

I'm not aware that Criterion would have used FB2 for their last Need for speed, need for speed: most wanted 2012. I have read nothing that would let me think that they do (quiet the contrary).

Actually a few days ago I read that the team in charge Dragon Age 3 moved to FB2 but that seemed to be a first example of deployment of FB2 outside of Dice within EA.

I would expect Criterion to continue using their Chameleon engine, which is quiet optimized and successful at what it does (by the way NFS:most wanted 2012 rus on the aforementioned engine).

In any case comparison will be none the less interesting.

Actually you're right. Seems it was used for the previous NfS which had nothing to do with Citereon and quite possibly the next one too, amongst a few more of EAs 2013 and beyond line up. Shame as it would have made for a nice comparison given the relative newness of the latest iteration of the engine plus the the fact that the Wii harware is now final, and they won't have been rushing to hit launch... though the last two points still stand making it still worth keeping an eye on it for curiosity's sake.

 

[Shifty Geezer]

Its difficult to ascertain the cost of the product as we only have the retail price.

Selling at a loss means Nintendo are selling the units to retailers for a loss.We need to know what those retailers are paying before making any assumption imo.

PS360 have exactly the same costs. If a £200 Wuu is £170 cost for Nintendo, a £200 PS3 or XB360 would cost ~ £170 to MS/Sony. Thus the relative price is still expensive for Wuu, unless retailers are slapping a massive markup on the boxes.

 

[tongue_of_colicab]

A quick google shows that ps360/wii had a maximum of 5% margin for retail.
http://www.dailytech.com/+XBOX+360+Retailer+Margins+Revealed/article4558.htm

For arguments sake lets take 10%, so a 350 euro wuu is still 315 euro at retail. Now just look at what kind of pc hardware you can get for 315 euro's at retail prices (the actual price for parts used by Nintendo in a console would be much, much lower) and to me I just can't see how Nintendo could possible lose money on the wuu.

 

[Grall]

Makes me believe that the Wii U probably has more up it's sleeve than what we know it can really do.

B3D isn't the kind of place for beliefs and wishful thinking. You'll just draw the ire of forum moderators with that kind of talk, so please don't.

Also, I hear the Wii U could do native 1080p resolutions so I am glad to hear this. Thx for the replies back, btw.

It's supposed to be able to, but no games that I know actually use it, and even the menu/miiverse screen doesn't run in 1080P I believe.

 

[XpiderMX]

Xbox 360 and PS3 can do native 1080p games too.

 

[Rangers]

A quick google shows that ps360/wii had a maximum of 5% margin for retail.
http://www.dailytech.com/+XBOX+360+Retailer+Margins+Revealed/article4558.htm

For arguments sake lets take 10%, so a 350 euro wuu is still 315 euro at retail. Now just look at what kind of pc hardware you can get for 315 euro's at retail prices (the actual price for parts used by Nintendo in a console would be much, much lower) and to me I just can't see how Nintendo could possible lose money on the wuu.

if they do it must just be "new thing being manufactured one off" type of cost. I cant imagine it to be the case for long. granted, the wuublet is probably being underrated as a cost driver imo.

A quick google shows that ps360/wii had a maximum of 5% margin for retail.
http://www.dailytech.com/+XBOX+360+R...rticle4558.htm

Correct. A lot of people seem to have this mistaken idea that consoles are sold at a loss by retail. I strongly doubt (other than crazy BF type sales) a retailer ever sells much of anything at an actual loss.

Having worked in the past in retail and checked the actual wholesale cost of an x360, ps3 etc, I can vouch they are sold at a small profit. I dont recall the exact numbers by SKU anymore, but I can comfortably say a 199 4GB 360 costs the retailer something around $180. Which is 10% markup not 5% like that article says. Markups may be somewhat lower in percentage terms on the higher priced SKU's, again I dont recall exact figures. A $10-$20 retailer profit on a 299 console isnt much in profit terms, so it's not exactly lucrative, but consoles are definitely sold at profit.

 

[TheLump]

PS360 have exactly the same costs. If a £200 Wuu is £170 cost for Nintendo, a £200 PS3 or XB360 would cost ~ £170 to MS/Sony. Thus the relative price is still expensive for Wuu, unless retailers are slapping a massive markup on the boxes.

Ok, but we dont know the difference between the two is my point I guess. We know a developer found it difficult to get their game running on the CPU - but that still doesn't tell us much about it or what it costs to build each CPU. We also don't know exactly what the GPU is yet, or how much whacking it all plus eDRAM on an MCM costs.

A quick google shows that ps360/wii had a maximum of 5% margin for retail.
http://www.dailytech.com/+XBOX+360+Retailer+Margins+Revealed/article4558.htm

For arguments sake lets take 10%, so a 350 euro wuu is still 315 euro at retail. Now just look at what kind of pc hardware you can get for 315 euro's at retail prices (the actual price for parts used by Nintendo in a console would be much, much lower) and to me I just can't see how Nintendo could possible lose money on the wuu.

I also think its important to note the initial cost of any technology (whether its cutting edge or not) is inflated. There's no off the shelf parts in the WiiU as far as we know, its all probably newly fabbed even if its using old technology so the lead in costs are higher than say the costs this time next year. Its certainly higher than the costs of a 7 year old console, even if the on paper specifications are comparable. 360 & PS3 components have been manufactured probably a hundred million times to date, & their costs will be through the floor by now as the voolume of production has been enormous - so its hardly coparable directly with WiiU fabrication costs yet.

Comparing it to retail PC parts is also pretty futile imo. Your not taking into account the cost of integrating all those parts onto silicon, and in this case the cost of putting it on an MCM package with the eDRAM. And even if we forget that part, I don't think I'd be able to build a PC which could run Trine 2** as it looks/performs on WiiU for £200 (Basic pack retail cost before tax), could I? I'd then have to manufacture it and sell it on top of that. Is that really doable? It might be I dunno (I'm seriously asking here!), but we'd have to know exactly what the CPU & GPU is before making that call imo.

**I'm not saying this is the greatest looking game in the world, its just one which we know runs particularly well on WiiU


I think, if it is being sold at a slight loss, then that won't last for very long at all. Once production kicks into high gear, the cost will plummet and the retail price wont go down nearly as quickly.

 

[tongue_of_colicab]

Tru but hardy, if any of the stuff nintendo uses is high tech. They are not going to save a lot of money on the plastic case or a psu. Chips are already small and ''easy'' to produce as well so I dont see massive savings like ps360 there either.

I bet you can make a pc that runs trine much better for those 200 pounds. 200 pounds is about 250 euro's. In the Nintendo design thread I posted this:

you can buy a A6-5400k (with a igp that is probably better than what the wuu has), a 7750HD 1gb, 4gb ram, a mainboard and a case+psu for 250 euro's at retail.

These are Dutch prices with 21% tax. Now cut out retailer prices (i'm assuming Nintendo is it's own retailer). Plus this includes profits for everybody from the designer to the store selling it, so that would cut the price even more for Nintendo and a lot of the hardware isn't needed in a console design making it even cheaper. Production costs of the above hardware will be less than 150 euro's for sure. That leaves atleast another 100 for the rest of the hardware the wuu needs to sell at break even for the cheapest back including taxes. Would the controller and the wireless signal chip really be that expensive? Doubt that plus wuu hardware is likely cheaper to build than the hardware I listed.

 

[Arwin]

Ask yourself how much power that 250 euro PC would use though.

Digital Foundry did an Assassin's Creed 3 face-off by the way. From the looks of things, the Wii U version is nearly identical to the PS3 version (which just a very slight additional drop in framerate).

 

[tongue_of_colicab]

Probably tripple of what wuu does. But I don't see how that is completely relevant. If you can keep a 35watt i5 cool in a 2cm or so thick cheap 500 euro laptop I don't see how you couldn't get rid of 90watt in a 4.5cm thick wuu without resorting to expensive cooling solutions.

 

[TheLump]

Tru but hardy, if any of the stuff nintendo uses is high tech. They are not going to save a lot of money on the plastic case or a psu. Chips are already small and ''easy'' to produce as well so I dont see massive savings like ps360 there either.

I bet you can make a pc that runs trine much better for those 200 pounds. 200 pounds is about 250 euro's. In the Nintendo design thread I posted this:



These are Dutch prices with 21% tax. Now cut out retailer prices (i'm assuming Nintendo is it's own retailer). Plus this includes profits for everybody from the designer to the store selling it, so that would cut the price even more for Nintendo and a lot of the hardware isn't needed in a console design making it even cheaper. Production costs of the above hardware will be less than 150 euro's for sure. That leaves atleast another 100 for the rest of the hardware the wuu needs to sell at break even for the cheapest back including taxes. Would the controller and the wireless signal chip really be that expensive? Doubt that plus wuu hardware is likely cheaper to build than the hardware I listed.

Might make it cheaper for the parts, but not necessarily cheaper to manufacture.

Re: the rst of your post:

Looks like I'm grossly overestimating the cost of PC components!! Thats a pretty cheap bundle right there I have to say. Would that genuinely outperform a WiiU though? Plus does that include a case, psu and BD drive? Like you say, the two N-Wifi modules probably dont cost alot, plus the Bluetooth one. I guess its only the DSP, eDRAM and ARM processor to factor in, but again I assume they are of minimal cost. I just figured its the cost of putting it all on one peice of silicon (plus anothe rpeice technically for the MCM ) would also contribute here? You're getting an O/S there too, but thats I'd be clutching at straws to include that.

Edit: Just to clarify, its really two separate debates here: 1) are Nintendo selling at a loss (& if they are, how) and 2) Can you build a better PC for £200

 

[BRiT]

If Nintendo is indeed selling each console at a loss, then it's likely the yield of the chip with the eDRAM is rather shit. That seems to be the biggest unknown in terms of costs.

 

[Laa-Yosh]

Actually a few days ago I read that the team in charge Dragon Age 3 moved to FB2 but that seemed to be a first example of deployment of FB2 outside of Dice within EA.

They've started the project on that engine. And the Mass Effect team uses FB2 for their next game, too.