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Want to know how much your retailer pays for Wii stuff?

The guys over at Engadget got a hold on some pictures of the Wii end caps (display fixtures located at the end of an aisle) along with zany accessories such as Wii dog tags, lapel pins, and controller “gloves.”

Also revealed are supposedly the CompUSA markups for Wii systems, accessories, and games. 

Product

MSRP in USD

Cost in USD

WII CONSOLE

249.99

237.50

WII REMOTE CONTROL

39.99

32.00

WII POINTS CARD

24.99

17.00

WII CLASSIC CONTROLLER

19.99

14.50

WII NUNCHUK CONTROLLER

19.99

14.50

WII GPAK ORGANIZER&TRAVEL

29.99

18.95

WII RAYMAN RAVING RABIDS

49.99

41.2

WII THE LEGEND OF ZELDA:TW

49.99

40.00

WII RED STEEL REVOLUTION

49.99

41.22

Nintendo has stated that it will make a profit on every system sold, which is not the modern day norm where the system is the loss-leader. So clearly, Nintendo’s cost to produce, package, and ship the Wii is less than $237.50.

Still, a profit margin of just over 5% for the console is nothing compared to 25% for a game. 

This explains the increasingly popular trend for retailers to force bundles on consumers during a hot console’s launch – the profits are in the software, not the hardware.

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The Wii to go...
By lemonadesoda on 10/9/2006 10:45:56 AM , Rating: 4
For Wii to take over the World! they need to do something about the pricing.

Why do we all (ok, not "all") have so many CDs and DVDs on our shelf? Because a price point $10-20 is an "impulse purchase point". Just like browsing a bookstore, where you go in, haveing a vague idea of what you are looking for, and come out with more books than you expected: the price of the Wii games should be at a level where the consumer DOES NOT think, "OK, that looks interesting, I'll ask around and look at some review sites...". No, it has to be "WTF, I'll just buy it and see...".

With those kind of economics and that kind of purchasing behaviour, then we could see Wii in bookstores, supermarkets, etc. etc. It's the way to go.

The fact that PS2/3 and Xbox/360 didnt go this route is because of -ve profit on the console, and license fees and profit margins NEEDED on the games to recover the manufacturing losses. But with the Wii, if cost<price then they can get real aggressive on game cost and play the VOLUME and scale efficiencies of mass market.





RE: The Wii to go...
By blckgrffn on 10/9/2006 11:32:50 AM , Rating: 2
Give these titles six months or a year, and they'll be impulse buy cheap. Until then, we'll get GC re-releases with support for the new controller. Plus, online back library games will be sub $10. How easy will those impulse buys be? Just blow your nintendo points from your living room, nice and painless.

Sounds like a good strategy to me...


RE: The Wii to go...
By Vertigo101 on 10/9/2006 11:39:22 AM , Rating: 1
Meh...I've had all those games for years...why re-buy them to be limited to playing them on the Wii?


RE: The Wii to go...
By killerroach on 10/9/2006 12:49:55 PM , Rating: 1
From the prices that Nintendo has been quoting, it should be restated as "most Virtual Console games will be $10 or less". They aren't going to be as cheap as was first thought, but still in relative impulse buy territory at the same time.


RE: The Wii to go...
By kamel5547 on 10/9/2006 12:46:48 PM , Rating: 1
... And it costs more to produce these games than that $10 DVD that also happens to be 5-10 years old... Produces of products always seek to recoup the investment in the product before they slash prices, 3 years from now those games will be $10-$20. Anyhow its a poor comparison as most movies have long ago turned a profit by the time they hit DVD so any sales are just gravy. Music CD's have a very different cost structure... the artists survive off of concerts and merchandise mroe than sales of the product itself (unless they are selling at least 500,000 albums).


RE: The Wii to go...
By lemonadesoda on 10/9/2006 4:49:41 PM , Rating: 2
quote:
it costs more to produce these games than that $10 DVD
That is completely bogus!!! Any idea how much it costs to make a movie? Quite a lot. But some "art" movies cost peanuts to make. The same goes for games development, or indeed, just port'ing a game from one console to another (perhaps with controller and feature updates).

Do not confuse the cost of the media with the initial production cost.


RE: The Wii to go...
By MDE on 10/9/2006 7:44:06 PM , Rating: 3
Movies get to recoup millions when they're in theaters, DVD sales are pretty much just the icing on the cake (unless the movie completely bombs).


RE: The Wii to go...
By UserDoesNotExist on 10/10/2006 10:16:24 AM , Rating: 2
I agree. Having a game be fun is optional, and they should have the most expensive and unproven components to allow for movie playback, since I'm never going to use my game consoles for playing games. Also, anyone who downvotes me is a Wii fanboy who does not appreciate my witty use of "logic and rationality" (sic).


RE: The Wii to go...
By UserDoesNotExist on 10/10/2006 10:17:24 AM , Rating: 2
Yay, DailyTech attached my post to the wrong topic. Feel free to downvote me.


At least they make some money
By Novaoblivion on 10/9/2006 10:07:30 AM , Rating: 2
I was talking to someone yesterday at a local store and they said that they wouldn't carry the 360 this xmas because they pay $399 for it and sell it for $399. Plus they have to pay shipping on it.




RE: At least they make some money
By encryptkeeper on 10/9/06, Rating: -1
RE: At least they make some money
By Griswold on 10/9/2006 11:35:55 AM , Rating: 3
Eat more soup.


By 05SilverGT on 10/9/2006 12:02:43 PM , Rating: 4
Dude you need to get to the gym. The 360 isn't heavy and since it's not ment to be portable who cares.


RE: At least they make some money
By Novaoblivion on 10/9/2006 1:51:33 PM , Rating: 2
Actually I just ordered my 360 from Amazon, it gets here tomorrow so I have not felt it but the UPS tracking site says its 16lbs.


By encryptkeeper on 10/9/2006 4:12:53 PM , Rating: 1
Ok, so it's not 100 lbs but thats still pretty heavy compared to the PS2, Xbox or Gamecube, which were the only things out there when it arrived.


RE: At least they make some money
By Jedi2155 on 10/9/2006 7:11:18 PM , Rating: 4
UPS and shipping companies typically overstate the shipping weight so its probably closer to 10-12 lbs for the actual unit . Add on another 2-3 lbs for whatever packaging material too. So its not that heavy at all.

If you have trouble lifting a Xbox 360, then seriously, figure out whats going on. I have a huge Thermaltake Xaser 3 V1000 (around 40 lbs for the case) with a full complement of components 2 optical, 2 fan controllers, floppy, 3 HD's, full complement of expansion cards and at lease 11 fans. It's probably closer to 50 lbs and i'm only 120 lbs and I lift that sucker to lan parties by myself.


Gezee
By tuteja1986 on 10/9/2006 10:46:36 AM , Rating: 2
The Wii cost less than $200 to make ;( they are making some good profit ...




RE: Gezee
By KaiserCSS on 10/9/2006 10:59:53 AM , Rating: 2
I don't even know whether that's a good thing...


RE: Gezee
By bohhad on 10/9/2006 12:13:52 PM , Rating: 2
you don't know if making a profit on a product you sell is a 'good thing?' it would seem obvious to me... this is going to encourage nintendo to make upgrades to the console, i would think. since they don't have to subsidize getting the console into our living rooms


RE: Gezee
By zombiexl on 10/9/2006 12:20:27 PM , Rating: 2
My guess is that the poster means it may not be good that the cost is so low compared to the other consoles (360/ps3).

That would lead me to believe they are using old/sub-par technology. Of course from what I've seen (and I may be wrong) the Wii wont be an HD gaming system.


RE: Gezee
By GhandiInstinct on 10/9/06, Rating: -1
RE: Gezee
By GhandiInstinct on 10/9/06, Rating: -1
RE: Gezee
By lemonadesoda on 10/9/2006 3:16:40 PM , Rating: 2
Economics 101

Cost to manufacture
+ cost of marketing
+ shipping cost to distributors in each country
+ import duty
+ distributors stocking and warehousing costs
+ shipping to retails cost
+ retails stocking, sales and marketing costs
+ sales tax
+ "shrinkage" and "returns" and "repairs"

It doesn't look like a big margin for anyone if the Wii costs $200 to manufacture. In fact, at that cost, this thing will lose money.

I hope the manu. costs are more like $100-$150. Then there's a little margin for everyone and the manufacture-distribution-sales cycle can actually work.


Hmm....
By encryptkeeper on 10/9/2006 9:41:09 AM , Rating: 2
Anyone in the electronics hardware business knows how low the margins are on equipment. It would be great to know if this is true or not, plus some retailers costs on these items must be slightly different than others.




RE: Hmm....
By Myrandex on 10/9/2006 10:24:28 AM , Rating: 2
I know at best buy hardware was not marked up much at all. Especially laptops had a pretty low markup rate.


Points card markup
By Lazarus Dark on 10/9/2006 4:32:36 PM , Rating: 2
did anyone else notice the markup on the points card
17>25
I hope thats just CompUSA, their stuff is always overpriced.
Maybe walmart will have the cards for 20?




Ordered my PS3 today
By OxBow on 10/10/2006 12:55:51 PM , Rating: 2
This is a little off topic, but somewhat germaine.

I can't wait till my new PS3 comes in. I pre-ordered it at Gamestop this morning.

Sweet!




Still not sold...
By IceTron on 10/9/06, Rating: -1
RE: Still not sold...
By NotAok on 10/9/06, Rating: -1
RE: Still not sold...
By GhandiInstinct on 10/9/06, Rating: -1
RE: Still not sold...
By Kim Leo on 10/10/2006 9:58:53 AM , Rating: 2
well i think for people. not caring about expensive HDDVD, or Blueray.. like myself wii is a good console, however if you just want a fun machine and hate the gyro(or whatever) idea go buy a PS2 at half the price.. like i did :D, i like gaming to be done on my PC, and playing a game with friends for fun on my PS2 on the tellie:)


RE: Still not sold...
By UserDoesNotExist on 10/10/2006 10:40:13 AM , Rating: 2
I remember back when everyone said that the DS was going to bomb since because it was graphically underpowered and the touchscreen was a stupid gimmick that no game developer was going to develop for. I'm ashamed to say that I was one of those people. The DS is probably the most successful platform of all time (given the limited amount of time it has been out), and it is beating the pants off the PSP and its more advanced graphics, because Nintendo took the risk and went with it.

Another thing that, quite frankly, makes me ashamed to be a gamer is how conformist gamers are. Yes, I just said that. Every gamer get assigned into their own "console" camp, and they start spewing out the same arguments over and over and over again about why "MY SYSTEM IS BETTER LOL CHUCK NORRIS" and accuse everyone that disagres with them about being fanboys. And then everyone listens to the music that MTV has decided is cool and shops at Hot Tropic. Personally, you know what I see when I look at my computer, PS2, 360, and GameCube? A bunch of machines. Not some glorious boxes that must be protected with religious zeal. I just see a bunch of machines that I own and that, quite frankly, I could take apart and make a silly hat out of if I wanted to. They don't control my life. I don't go into frenzy mode when someone attacks "my console" or when DailyTech posts an article about "the other console". Am I looking forward to the Wii? Yes, I am. Am I looking forward to the PS3? Once the price tag drops, yes, I am. Do I love my 360? Yes, I do. But I don't need to invest my self-esteem into whether or not any of these consoles succeed or fail.

Finally, if you want a BR or HD-DVD player, go buy a BR or HD-DVD player. No one's stopping you. Just because Nintendo isn't putting a BR or HD-DVD drive in their system doesn't mean that you are legally bound to never purchase a BR or HD-DVD player.


RE: Still not sold...
By Kim Leo on 10/10/2006 11:17:37 AM , Rating: 2
of course, I agree with you a 100% I didn't mention that I only bought a console because I wanted a DVD player and a console for me and some bud's to play a game of some sort, built in to one box, it's up to the consumer how he/she buy's he's/she's stuff, most people I know have a console, DVD player, VHS, and probably also a media center hidden somwhere ;). So I don't hope it sounded like I hate HDVDV, or blueray, it's just not my cup of tea at the moment because of price, but I welcome all sort of new and inovative product as long as it make's sense like, cheaper to produce and easier to maintain :)


RE: Still not sold...
By Kim Leo on 10/10/2006 11:29:50 AM , Rating: 2
all these D's and V's confuses me :P and a lack of edit frustrates me:D


"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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