Lonnehart

Inkmonkey

Lonnehart
I wonder how much of the cost for every console they sell are Sony and Microsoft swallowing. As far as I know (I could be wrong) Nintendo has so far made money from every console they make while the other two lose money and have to depend on their games to make up the loss...

Yep, Nintendo's been selling the Wii at a profit since day one. I think it's only a dozen or so bucks at a time, but I'm probably wrong by now (parts get cheaper regularly, and I heard this number a few years back). Meanwhile, PS3 and Xbox are basically losing about $50 a console, give or take. When parts do start getting cheap enough for them to conceivably make a profit they generally do a price drop. Even as sales increase, Nintendo's still the only console maker who has room to move comfortably with their pricing. They're also the only people making real profit off of software on the Wii, which is probably going to result in a bunch of Nintendo execs dying from an overdose of Money one of these days...

However, they're still losing money on their consoles. I still don't quite understand how this strategy is supposed to work. You lose money on every console you make, but you expect to make it all back by selling a lot of games. To me it's a risky way to do business; what if most of the games turn out to be duds? And does this mean the games are a little overpriced to make up for the losses? I'm sure that strategy worked once, but I doubt it will work every time. I could be wrong though...

Well, it's the way things have been going on for years. They do inflate the prices of games, especially now that they're on CDs, which cost pennies to produce. The physical medium is the cheapest parts of gamese these days, though I'm not sure how much is made back for the cost of producing a game.

Even if it is a dud, though, it's genearlly the developers who suffer more. They have to pay the console manufacturers just to have the game on their system, so they're always getting paid.