Reggie: Wii makes $$$ immediately

Nintendo not waiting around for market share, production efficiency to make money on next-gen console; cash will be made "out of the box."

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The idea with most first-party gaming companies is to get a foothold in the market no matter the cost, even if that means selling hardware for less than what it costs to make. Microsoft has admitted to losing a significant amount of money for each Xbox sold--Microsoft's Robbie Bach believes the company's gaming division won't turn a profit until the 2008 fiscal year. He's not alone, as many industry insiders believe the PlayStation 3's guts and production costs are more than its $600 price tag.

The reasoning behind taking a hit in the wallet is that profit margin on software sales theoretically outpaces that of hardware. In addition, as manufacturing processes streamline and costs of goods are reduced, the price of making machines decreases drastically--however, companies need the financial security to survive the initial beating.

Nintendo, on the other hand, took a completely different approach, and didn't want to stay in the game only to take a financial loss from day one. Instead of focusing on high-definition graphics and some of the extras that make technophiles drool, the company opted to try to expand its reach through simplicity--that is, innovate and capture the attention of the mass-market crowd rather than the hardcore gamer who is willing to spend money on a console, HD setup, and other accessories.

The result of that choice, says Nintendo of America president Reggie Fils-Aime, is instant profit.

"We will make a profit on the entire Wii proposition out of the box--hardware and software," Fils-Aime told Reuters. "That really is a very different philosophy versus our competitors. We are a company that competes only in the interactive entertainment space, so we have to make a profit on everything we do."

Nintendo expects to sell 6 million Wiis through March of next year, but analysts expect even better numbers. Michael Pachter of Wedbush Morgan Securities told GameSpot, "I keep hearing that they will crush the 6 million unit number (by something like 2 to 3 million). That would be good for everyone."

It's not just the price of the hardware that gives Nintendo an edge in the money game. Development costs for the Wii are expected to be a fraction of development costs for the Xbox 360 and PS3.

THQ CEO Brian Farrell, whose company is supporting the Wii with four games by the end of March 2007, explained the financial advantage of making games for the Wii. "[The Wii] wasn't a whole new programming environment," Farrell said. "So we had a lot of tools and tech that work in that environment. So those costs--and again, I hate these broad generalizations--but they could be as little as a third of the high-end next-gen titles... Maybe the range is a quarter to a half."

The Nintendo Wii goes on sale in the United States on November 19 for the price of $249.99. Sony's PlayStation 3, which goes on sale November 17, will be offered in two specs--a lower-end $499 model and a high-end $599 model. Microsoft's Xbox 360, which has been on sale since November 2005, is currently available in $299 and $399 versions.

Discussion

463 comments
nate1222
nate1222

All three consoles rock for different reasons. Right now, I'm a 360 man. But the Wii makes me drool. The BC, access to Old School Classics and the fact that the development costs are so low that more companies will jump to create games for it. The guys at Nintendo probably played the SMARTEST strategy this-gen. Most 'hard-core' gamers are going to hate the Wii. By nature, they're 'tech-heads'. But, I believe, that graphics have become as good as they NEED to be last-gen (PS2/XBox/GC). Right now, games need to become cheaper to design, easier to pick up and give gamers access to the lengthy list of past (often great) titles. Most people are either 'casual' or 'core' gamers. 'Hard-core' gamers deny themselves sex and/or social lives. Most people enjoy gaming, but they don't want it to consume them. Movies and music are fairly cheap ($15 for a CD, $10-$20 for a DVD). If games don't become more affordable, it can potentially kill then off. Think about it: development costs are through the roof right now-if a title doesn't sell 2-3 million copies, the dev. and publisher takes a hit. Too many hits? Staff members are in UNemployment lines. A console that's pretty popular and cheap to develop for greatly reduces the likelyhood of a fall out. I don't believe that console gaming will "die". But I believe thay its existance will depend greatly on bringing its costs down and making gaming as 'normal' as music and movies. Nintendo is the only company even trying to do this.

Gamer_dude_666
Gamer_dude_666

rock on nintendo i mean **** graphics and stuff but with the WII controller your gonna have a much more fun expirence

saugh
saugh

Smart move, although it kinda hints that the Wii isn't such a technological leap as its said to be.

wanderer818
wanderer818

"Wii is good, ps3 is good, xbox 360 is good so stop complaining and get a life. I dont think any of them give a crap anyway, they just want a big fat profit in the end." uh, no **** they're called businesses for a reason, but you need to make good products to make a big fat profit in the first place.

HARRYericPOTTER
HARRYericPOTTER

Woot! Enough said. I'm getting a Wii, I'll gladly support their profit making ideas. ;-)

josephmadde2005
josephmadde2005

Man if theres one thing Nintendo can do it's print...er make money.

Myriam_D
Myriam_D

Read this, read some comments, and the big thing that's got me excited with ze Wii is that yes as someone stated, you can have much bigger budgets with more stuff if it costs less per thing. Still, one other thing is that I once heard a commentary (I think it was from the Monkey Island guy, then again, I've seen more than one) that stated that unlike other art industries like movies and books newer, first timers (think upper tier, lower tier) have it ROUGH making head way. (It's too risky to make good, original games if they could fall flat anyway, so they have to build themselves up on cheap clones and stuff (One big sales failure for them and they could topple). This could give them a leg up, meaning more fresh ideas on big consoles, meaning more good companies, means more good games, means PAAARTAAAYYY! Besides, less cost means less risk means people will worry less about lost money and FINALLY... That means people will move out of the norm in order to catch attention with little risk. Makes me wonder how many new genres might pop up out of this... Or old ones, I miss Duck Hunt. *pout* Well, that's my $0.02-Best to ya (all of you, even doubters and fans of other systems (P-S-Wii! P-S-Wii!) Myriam.

demancio
demancio

could nintendo be back on the way to the top with this smart market move?

cubelover38
cubelover38

affordable system, affordable games, exercise while playing i guess ill be sleeping in the car on the 18th

Shaoran_Lee
Shaoran_Lee

This is a good thing. Nintendo is thinking in a large number of possible customers, by selling this new interactive way to play games in a low price (compare to the other two consoles). I think Nintendo will sell the 6 million consoles and is going to be the beginning of a new gaming experience... Go Nintendo Go!!!!! Wii for everyone!!!

Science2000luke
Science2000luke

True, they are businesses, and they have done a hell of a good job making us think that videogame universes are worth thinking about. But the reason why we play and think of videogames is because they make us happy, so all the better if you can get happiness for $249.99! Heh, to think that glamorous computer gaming software can bring about joy...

cyborg100000
cyborg100000

Wii is good, ps3 is good, xbox 360 is good so stop complaining and get a life. I dont think any of them give a crap anyway, they just want a big fat profit in the end.

randombutter
randombutter

We will get Wii sports free (IIRC), which includes Tennis, Bowling, Baseball and Golf(?). I also think it was said that we will get one wiimote and nunchuck only, but I am sure Game, Eb and Gamestop will do package deals with more controllers and games.

asdzzx999
asdzzx999

I have two questions that is it ture that when we buy the WII, it will give u 4 free games, and another question is how many control will we have when we buy the WII?

megaman_legends
megaman_legends

[This message was deleted at the request of a moderator or administrator]

gam3r3OOO
gam3r3OOO

The thing I like about nintendo is they are the innovators. Here we have Sony and Microsoft who like to keep improving the graphics (almost exclusively as if that was the only thing that matters in games). Its like this: when you play your first FPS or RTS you've pretty much played them all (the games are the same but with a different plot). If you have a game with the same playing mechanics and controller once you get used to the graphics you get used to it. For a console to be awesome something has to be extrodinarily different from the last one. I remember the jump from SNES to N64 was pretty sweet. But now from xbox to xbox 360; I'm not seeing anything too revolutionary yet. Makes me wonder what they will come up with next for the system after the wii. Maybe people will come to expect that games have more realistic controls?

Mam00th
Mam00th

Blackblade_Inc Wow nice way to waste your time writing a comment this big... And humm sorry there are parts I still don't understand, horrible graphics? If that mean no 1080p HD for you fine but men the graphics are way better then your PS2 and your Xbox and the GPU have more power then the one from the PS2 and the Xbox reunited... And what goofy controller that no one wants? Wait humm half the ppl here will buy the wii because of its controller. Because frankly I'm getting tired of the same old thing. I mean wow Halo 3, MGS4 why not Diablo 3 while were still here huh? I mean change the goddam concept and thats why I love nintendo

stanislavski86
stanislavski86

Well there was always Atari big_fat, Nintendo is not the starter of things.

big_fat_bum
big_fat_bum

if the wii doesnt sell good, well im gonna be really disappointed in nintendo, afterall they WERE the first to do some gaming. they are the ones who started it all. with out nintendo, people wouldnt have their xboxes or ps2s!!! But with all the positive news that the wii is getting, there is a low chance of that going to happen

Karjah
Karjah

putting down development costs per game can only mean one thing. 1) more Big big budget gems like FF7, Halo etc 2) More games thus wii is probally going to have the largest library of all the new consoles going price wise. Ubisoft must be cheering right now on all the money they are going to make. Excuse me while I go buy some ubistock.

lannyboy334
lannyboy334

Blackblade_Inc I thought almost for a second that maybe you were just joking with me, that maybe u weren't as rock dumb as your article makes you sound. you must have totally missed the whole part where the Wii controller isn't JUST a controller, its fully interactive. there is a SIGNIFICANT difference from an Xbox 360 controller and a wii controller. you are interacting with the the controller, not just pressing buttons. go watch a few Wii videos, especially the overall one from New York. to say that those games are the same as any old button presser, as fun as they may be, you would have to be totally... IDIOTIC!

Goldthumb
Goldthumb

this is going to be good. the Wii baby! YEAH!

mlou
mlou

all i can say is Wiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii ^_^

Kbs64
Kbs64

Say it with me, M-O-N-E-Y

Gobo666
Gobo666

I hope Nintendo make boat loads of money. They deserve it, they did it first, and they did it best, it's time they reap the benifits.

DoubleDragon1
DoubleDragon1

I still think Sony will do well. This business is about cost and perception. People love NIntendo for it's many great franchises and all of the great memories they have given us. Sony has earned customer loyalty due to it's great franchises as well as it's 2 very successful consoles. Customer loyalty is very important in any business. Sony nor Nintendo hasn't really disappointed it's customers (well the N64 fiasco is the exception) so if disappointment WERE to arise from these 2 companies, customers are willing to give the chances. Nintendo will do very well i think just because of how much cheaper their system is. Think about the 40 something year old Mom or Dad looking to get a gaming system for their kid(s), 250 bucks is a lot more appealing than 599. Sony will still sell to it's hardcore loyal fanbase thats a given, Nintendo is reaching a much broader audience this time because they really don't have a choice, they have to. They can't afford to take the financial risks that Sony and Microsoft can. People often underestimate the great selling point that price has on ANY product. This factor is especially benifical to Nintendo because they are reaching to a broader, less educated audience this time, and will most likely use the price as a reason to buy their product over the competiton. The hardcore fans will have already made up their minds regardless. For myself personally, I plan to buy the WII at launch and wait on the PS3 until they have more units available in bulk. Besides the fact that first generation consoles (ie PS one and 2) have had issues in the past and Sony is using new technology in PS3 so there is bound to be problems. I plan to get the PS3 when they announce the launches of their more prominent franchises such as Tekken and Metal gear for example. I would only consider getting a 360 IF Ninja Gaiden and Shenmue 3 (i hope Sega really is planning something for the next gen with Shenmue and the same with Tecmo for Ninja Gaiden) were exclusive to it. Don't get me wrong, I want to get the PS3 now but there aren't any franchises I want at the moment. Plus the price is a bit much to swallow. I'd rather buy the WII, Zelda (game I want) and a few accesories and be able to pay rent at the end of the month without having to give up my first born. Sony is smart in one regard by knowing the have the loyalty of the consumer and making such a system and setting a high price point knowing that people will buy it. I just feel that they may be alienating the masses. I hope I'm wrong. Whether this system can do this or this system can display 50 billion of that, people need to remember that it's the games that sell a system, no the hardware itself.

ebax7588
ebax7588

"Plus Sony already announced a price cut down to 430 bucks for a 20 gig hdmi ps3." uhhh... no? PS Nintendo rules

Blackblade_Inc
Blackblade_Inc

I doubt wii will do as good as its OVER-HYPED to do. I mean Sony is a juggernaut in the industry as is and when people around the world want gaming sony is something they're already familiar with and love (ps1, then the ps2). Theres no real reason to convert Sony's been doing whats worked for them for years. Plus Nintendo might be a bit ahead of its time in a bad way. Its straying from the norm too hard and could alienate consumers (mainstream consumers the ones who dont visit gaming sites 24/7). Plus Sony already announced a price cut down to 430 bucks for a 20 gig hdmi ps3. Thats 30 bucks more then the xbox 360 premium pack (which has been selling greatly). Wii is 250, while a core 360 is 300. So the wii isn't really that much cheaper in fact its sort of a rip off. What are we paying for? A goofy controller no person over 30 would pick up? Horrificly bad graphics? Lack of 3rd party, except for ubisoft? I'll be honest I'm unimpressed people said when u play ds you'll never go back. I bought the ds and found it frustrating out of date, and most of the good games didn't even use the touch screen. Xbox 360 already has a year head start, Sony is a juggernaut and a household name with an enormous fanbase, Nintendo is a dying out company that focused on the child demographic far too long and even now isn't trying hard to change that. All wii is, is a gamecube with a controller ahead of its time, which could severly hurt Nintendo. All they know is that when they go to the store they can buy the Ps3, Xbox 360, and then something called a wii (which is a pretty big turn off for some people). Plus whats Nintendo doing thats so innovative? If you ask me all I see are gamecube games with a light gun controller pretty much? No graphical jump, no innovative networking jump, no new innovative ip's, Hell all I see is the same **** Nintendo's been putting out since the 80's with a new way to play them. So dont say Nintendo's innovative all they've done is make a new controller, something people wont care much for at the end of the day because people buy consoles for GAMES not controllers. And games are something xbox (halo, Gears of War, Mass effect, Ninja gaiden) and ps3 (Gta, Gt, Resistance, Mgs4, Dmc4) have and dominate with. Mario and Zelda cant save Nintendo if they want to survive they need to make killer apps and completely new Franchises, as well as get more 3rd party support.

runejedi
runejedi

wii will sell heaps its much cheaper than the ps3 , and I think once people have played the wii they will never want to buy a console like the xbox or ps3 again all sony and microsoft have done is made the graphics better .nintendo are foucusing alot more on making the games than the console and with the realease of the ps3 put back to 2007. i doubt they will ever sell enough to make up there costs. as for dvds being playable on the wii i have never seen the point of dvd playback on any console every one has a dvd or a computer with a dvd drive i would much rather be playing any game than watching a dvd

jmegasite
jmegasite

I think the Wii is going to do great in sales. It's nice and cheap, and has a different style of gameplay. I love it!!. PS3 is too expensive for me. :( I might buy it when it drops it's price to 350. By the time that happens, the PS4 is probably goona release...... :( Oh well, this is a Wii form, so I just wanna say, GO WII GO!!!

bubnux
bubnux

STEP 4 : PROFIT Somebody remind Micro$oft that they have forgotten step four for the sedcond time in so many generations.

Omnislush
Omnislush

For all of you out there who keep fussing about the Wii with no HD or DVD--get over it. I for one am excited that the Wii is going to provide me with an affordable, new video-gaming experience. The fact that Nintendo is making money on them makes things even better--it means they'll actually be around long enough to churn out more of their great first-party games! Graphics can be pretty and add to an experience, but they almost make some things too real. I play video games to get away from reality--and Nintendo really seems to understand that a majority of gamers are like that. Looks can only take a game so far--regardless of how beautiful the graphics are, if the game is not fun, then it is not worth the money you pay for it.

rennik_l
rennik_l

Here's my two cents: I was a sony fan throughout the ps2, now I've got the GC/PS2 combo. Nintendo is smart by doing this. Look at this way... What are the Xbox 360 and Ps3? Just updates of the original consoles, better graphics, same gameplay. The 360 and PS3 (Fine systems, I like em both, but probably won't own either) are just as their name sounds, Xbox 360 (Xbox 2) and Playstation 3, granted new versions of the same good stuff, but the Wii is a New Generation console, all new gameplay, updated graphics and sound and stuff like that, a new kind of good. I have always wanted to swordplay in video games by swinging things around, button mashing gets tiring after a while. So here we are, PS3 and 360 are next gen, Wii is the new gen. Also remember, (this is for all consoles, and anyone who takes this as being pointed at a specific console is an idiot) Crap with good graphics is just good looking crap. I play Zork still, NO graphics, and that game is fun. Wii is smart keeping their system that low. Also look at the other systems, the PS3 and 360 don't come with a game in the box, even if Wii-sports is a lame title, it's at least SOMETHING to do with your wii if you can't buy games right away. I'm going Wii/PC this round, though I do really like all three consoles, and I'm planning on getting Red Steel, Zelda, and possibly Call of Duty 3 on Wii purchase day. In the end, it's all opinion, but when someone insults things, or say something sucks, give some reason as to why you think that. I think the PS3 will lose this war because of the true hd thing, I don't have an hd tv, and I don't want to have to buy one to really get the fullest out of my console. That is my reason, aside from the price tag. Anyway there is my 2 cents. The Wii is a smart move by Nintendo, and I'll be experiencing the Twilight World in Zelda on the 20th of November (gotta spend the first day checking out the other features :) )

sinceps1
sinceps1

"i would have prefered hd gaming for my wii when its out but i can get that with my 360 and still enjoy the wii all the same" 40 dollars or so for a special cord(don't know exact names of these things)will get you 480P. So smoother video etc. I'd say it's worth it especially for the old gamecube games like Resident Evil 4. That game especially will look gorgous and that's even if you don't have HD!

kazooiethehero
kazooiethehero

find wii wWIIwiwiwiwiwiWIIwiwiWIIwWIIiWIIwiwiWIIwiwiwiwWIIiw YAY i win um........ you......i don't know ho to say this but YOU LOSE!!!!

MoldOnHold
MoldOnHold

it appears that nintendo is smarter than both of its competitors. low production costs + profits + multitude of first party titles + third party support + innovative gameplay + LOW PRICE POINT (yeah, ppl who bought a PSP for $250 and are now complaining about the wii's price tag don't deserve to talk AT ALL) + user friendly and wi-fi capabilities = great news for gamers, great news for developers, great news for nintendo. it's truly revolutionary. it's a nintendo wii

captaincoley
captaincoley

Wii!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

kridic
kridic

[This message was deleted at the request of the original poster]

FortuneC00kie
FortuneC00kie

What is this I keep hearing about Nintendo "not being able to keep up"? Like they literally did not have what it took to make their system HD, and give it all the same ridiculously expensive processors and video cards as the other consoles. It's not as if they would magically run out of money if they did the exact same thing that PS3 and 360 are doing. It's a choice they made early on, not something they were forced into. I'm not sure yet if Nintendo having their own market for gaming is going to be a good thing or not, but we'll see soon enough. Developers are going to be excited to work with the Wii, we all know that. Their gonna have a very organized group or people to design their games for. And because of many of the games are going to be Wii exclusive, the 3rd parties are going to have a field day. On one hand they have two systems which for the most part have the same specifications, games are being made on the same discs and being played with the same hardware, and lastly...their going to have the same games being played on them. I don't see where the 360 ends and the PS3 begins. All you have to do is choose one, because their so similar. But the Wii will have it's own games being made for it, so developers will have the priveleges of knowing who their customers are, knowing that their product will almost certainly be purchased, and having low development cost in contrast with the competition.

shadystxxx
shadystxxx

you can pick up a 32" hd ready tv for £500 not the best makes but for an extra £99 you can get a samsung hd ready tv or i bought a relisys 21" hd compatible lcd for £199 i get a great picture,then recently when i could afford it i went halfs with my g/f for a 32" samsung hd ready tv,some people said the hd years were 4-5 years away the hd is now and in 4-5 years most people will have hd and most companies will be offering hd channels more widely.in the u.s a big percentage of americans already have an hd tv and people are snapping them up every day in the north east of the u.k my g/f works at currys and she is amazed with how many are selling i told her we needed it(really i just wanted a bigger hd screen for my 360) but she loves it know and just forked out for the sky hd box and she loves it and iv been demoted to the 21" screen. so i definitly think the hd years are here and know anybody who really wants an hd screen for gaming will save,work or get credit to really get one, some people are happy with what they have but id i would have prefered hd gaming for my wii when its out but i can get that with my 360 and still enjoy the wii all the same

Reecosun
Reecosun

everyone knows that nintendo is gunna bring in the dough this time round GOOOOOOOOOOOO NINTENDO

shadystxxx
shadystxxx

i will buy the wii for weekends of drunken fun and my 360 will be for the serios gaming. i think people need to stop moaning and just enjoy the great things the are coming to the gaming world. leave the war to the companies any comments about your favs and what you hate got unheard by the top 3 companies and consumers will buy what they love some will be loyal with one company some will buy all.i planned on getting all 3 buy the ps3 has been a disapointment no games to make me want to buy one, iwas sure to get one at launch but nothing has drawn me in yet. maybe a year down the line when more games are out. for know the 360 with its amazing xbox live has me hooked and i cant wait for me wii to be delivered.red steel,excite truck and zelda will be great and wii sports for family and friends fun. the gaming worlds looking great at the moment cant wait for the tgs demos and vids on xbl