Report: Nintendo banks $6 on each Wii sold

Forbes says console maker's budget-line console earns slim operating profit on each of the nearly 35 million consoles sold.

189 Comments

For this generation of home gaming consoles, Nintendo exited the technological arms race that had fueled the industry since its inception. Rather than opting for the bleeding-edge tech specs adopted by rivals Sony and Microsoft, Nintendo built the Wii using dated technology and an innovative motion-control input scheme. The gamble, of course, has thus far paid off in spades, with the Wii's nearly 35 million units in global lifetime sales easily outpacing the Xbox 360's nearly 23 million systems and the PlayStation 3's nearly 17 million units. (GameSpot initially reported inaccurate PlayStation 3 sales figures provided by Forbes, which underestimated sales by 4 million. GameSpot regrets the error.)

Nintendo's little money maker.
Nintendo's little money maker.

In stark contrast to Sony and Microsoft, Nintendo also reaps the added benefit of making a profit on each Wii sold. Citing Macquarie Securities analyst David Gibson, financial news magazine Forbes reports that the publisher makes a $6 operating profit on each Wii sold at its $250 asking price. (Forbes incorrectly lists the Wii's price point at $260 and the PlayStation 3's price at $300.) Nintendo had not responded to GameSpot's request for comment on this figure as of press time.

Forbes goes on to note that Nintendo is besting its competitors in other ways, as well. Nintendo will reportedly be responsible for 60 percent of the 220 million games sold for the Wii this year. That stands in marked contrast to Microsoft and Sony, who respectively stand to publish 30 percent of 125 million Xbox 360 games and 15 percent of 120 million PS3 games expected to sell in 2008, according to the financial magazine.

Nintendo's operations may be hampered by a strengthening yen in the global economy, but the Japanese gaming company is still pulling in gobs of cash. Reporting on the first half of its fiscal year in October, Nintendo announced net income of ¥144.8 billion ($1.55 billion) on sales of ¥836.9 billion ($8.98 billion).

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Avatar image for daabulls23
daabulls23

Six dollars is more than Sony or Microsoft makes on each of their consoles (I think). Maybe not. Who really knows? Apparently Forbes can't really be trusted with figures anyway.

Avatar image for ACEGamer89
ACEGamer89

I'm sorry, since when does the inability of developers to use a console's full power make hardware worse. Ask a PS3 fan, and the first thing they'll say about why the graphics are insanely better than the 360 is that people don't know how to write for it...so tell me how the fact that Wii and PS2 games look "similar" (an opinion at best, since GC games looked better screenshot for screenshot than PS2) has nothing to do with the hardware. And again, since people can't read, it is NOT a cube with a new controller, so since the hardware is different, it had to be developed. I'd also like to point out that I believe the Forbes article is implying not just after hardware cost, but also labor, packaging/shipping, AND most importantly, R&D for creating new hardware, Nintendo pockets on average $6 from each Wii sold. That number does make sense.

Avatar image for shadowblade99
shadowblade99

$6 is alot when you are selling 35 mil consoles.

Avatar image for Rect_Pola
Rect_Pola

That's all fine and good, but unless the Wii's successor lets control with thought it has to step up graphics, and doing that is going require some form of hard disk (actually, any Wii that goes online could use one). Thankfully hard disks of tremendous space are getting cheaper everyday. Hopefully the cost of graphics worthy of a next step will go down by then. It wouldn't be a big surprise since they don't really have that far to go.

Avatar image for jmartin1016
jmartin1016

I don't believe they are making only $6 profit on each console. They are making more profit per console than that.

Avatar image for warlord454
warlord454

$6 x 35,000,000units = $210,000,000 yeah that is such a low profit!

Avatar image for deactivated-57fce817a4cf5

Hopefully with all this profit Nintendo will be able to bring us even more exiting new products in the future. I'm hoping for a massive budget Zelda with an enormous world and takes so long to complete that I will have to drop my course just to finish it.

Avatar image for deactivated-57fce817a4cf5

@PandaBear86 - Phew, I'm so glad you posted your comment, backed up with financial facts, reports and evidence because I before that I thought the above report was accurate. I'm glad you put the world straight there...

Avatar image for raghraghragh
raghraghragh

I'm pretty shocked about how expensive it is to manufacture the Wii. I mean really, it's not that much different from a Gamecube/Xbox.

Avatar image for PandaBear86
PandaBear86

There is no way the Wii costs $244 to make. Its basically a recycled GameCube with a new controller!

Avatar image for Gamingcucumber
Gamingcucumber

To those who don't think 6$ is anything. Take a look at what loss Sony sold their PS3 at. Somewhere around 200$ per console.

Avatar image for xdeiri
xdeiri

GameSpot regrets the error OH for god sake how many error you should be

Avatar image for janderdarkmoon
janderdarkmoon

I would have gladly paid an extra 50-100 bucks for some more horse power in the wii. Not that it really matters though since mine has just been collecting dust the last couple months anyway.with the crap storm of games released lately.

Avatar image for hatieshorrer
hatieshorrer

Some people complain about the Wii costing more then the hardware its made of now you can see your gripping over a measly six dollars. I hope your happy cheep skate.

Avatar image for Norgavue
Norgavue

Dang just 6 dollars? Still better to make 6 than nothing.

Avatar image for chikahiro94
chikahiro94

@ mark_unix They've always been profitable or at least breaking even, even when in last place.

Avatar image for mark_unix
mark_unix

that's a pathetic amount of profit for Nintendo. i guess they have to re-earn all the losses made on the N64 and the gamecube which both failed miserably.

Avatar image for Great_Ragnarok
Great_Ragnarok

what a bunch of bs!

Avatar image for metalisticpain
metalisticpain

This report is rubbish. Forbes has already been cited has having incorrect infomation twice in the one article. once on estimated PS3 sales and then on plainly obvious selling points for consoles. So everything in this article can be taken with a grain of salt.

Avatar image for chikahiro94
chikahiro94

@Arlondiluthel In Japan the Wii sells closer to $200, but doesn't come with Wii Sports like the US version does (that sells pretty well over there by itself). Typically consoles are sold very close to the actual wholesale price, with the games and accessories (controllers, battery packs, game guides, etc) being where the real money is for retailers. Now, its entirely possible that the Wii Sports pack-in helped Nintendo US jump the price up MSRP wise and give a better profit margin on the Wii itself for retailers - that would encourage retailers to stock the Wii even more, promoting it over other systems. *sigh* Pity Nintendo won't tell us exact numbers and practices - I'd bet that would be interesting reading.

Avatar image for Arlondiluthel
Arlondiluthel

With regards to what finaleve said about the Wii only costing $200 to make, you also have to take into consideration the cost of the manual and packaging, plus the cut the retailers take, which would account for the other $44 per console.

Avatar image for chikahiro94
chikahiro94

The Wii should be less than $200 to make - the 360 Arcade/Core is $200, and I don't think Microsoft is losing any money in hardware subsidization (could be wrong).

Avatar image for Grantsplace2004
Grantsplace2004

whats the percentage of wii games that are half finished garbage, minigames, or came with the console. i know the figure for the last one, or at least wii sports. about 13.6% or 30million wii sports that are counted as sold even though they come with console.

Avatar image for finaleve
finaleve

THizzle7XU > Wait for when Conduit is released. That game is being pushed to its limit on the Wii. Wasn't it reported that the Wii itself costs 200 to make?

Avatar image for THizzle7XU
THizzle7XU

"And just as a correction, the hardware in the Wii is about 2x as powerful, graphics card and processor, as in the Gamecube, so no, it's not just a cube with a different controller. It is different hardware. A little less hyperbole would make your arguments more compelling...oh wait, no..." That's sure not coming through from the games considering the PS2 versions often look the same or even better than the Wii.

Avatar image for crix3
crix3

Looking at the mistakes Forbes made just alone cited in this article, I feel hesitant to believe anything that they may claim or report.

Avatar image for Turkeysoup1
Turkeysoup1

Nintendo already said they make the console for less than $200. So they are making more than $6 per console.

Avatar image for goldeneye_basic
goldeneye_basic

From the above article. "(GameSpot initially reported inaccurate PlayStation 3 sales figures provided by Forbes, which underestimated sales by 4 million. GameSpot regrets the error.)" and "(Forbes incorrectly lists the Wii's price point at $260 and the PlayStation 3's price at $300.)" I am surprised that Gamestop is quoting Forbes on anything after two errors like that. I don't trust anything in this article, especially when Forbes gets something obvious such as console prices wrong. It makes me wonder what else Forbes mis-reports.

Avatar image for subyman
subyman

Lol, Forbes doesn't know what the hell they are talking about. If they can't even get the prices and numbers sold right how the hell do we know if the 6 dollars on every unit is right?!?

Avatar image for KWHCoaster
KWHCoaster

jcouch2020 - "ive had my wii for about 9 months now, i only use it for porn......" Stop beating your Wiimote

Avatar image for ACEGamer89
ACEGamer89

And just as a correction, the hardware in the Wii is about 2x as powerful, graphics card and processor, as in the Gamecube, so no, it's not just a cube with a different controller. It is different hardware. A little less hyperbole would make your arguments more compelling...oh wait, no...

Avatar image for ACEGamer89
ACEGamer89

quincy0191... Fantastic. You're getting a round of applause right now. Bravo!

Avatar image for hedge_hog21
hedge_hog21

thats nice, too bad their money is made off cheap temp workers like the Big M. I work as a temp worker in their repair division and after 2080 hours you are forced to take 2 months off per NOA policy so they don't have to hire ppl

Avatar image for rockstar_88
rockstar_88

I'm glad Nintendo now has a large foothold on the industry, especially since I still have fond memories growing up with them. But unfortunately Nintendo hasn't given me a good reason to turn on my Wii in the last eight months (the last time was SSBB). Please Nintendo, do something for us hardcore gamers; you can tout all the numbers you want, but where your strength lies were providing hardcore gamers games worth gaming. Nowadays, I look at a Wii game and I cringe at the thought that it might be too casual for my taste...

Avatar image for joke_man
joke_man

Now think about this lawn mower guy. By the time you have paid for the gas, oil, the lawn mower itself, put your own time into actually mowing the lawn(time that is probably worth more working a real job), and just like a car you are putting constant wear on the mower and there is overall depreciation of the mower from its constant use, you are probably making nothing mowing the flippin lawn. Just like Nintendo, when they figure out how much they make per Wii, they include all the technology costs and develpment of the console, all marketing, cost of production, cost of labor, shipping worldwide, etc. That is when they finally get the 6 bucks and for everyone's information, that isn't that bad. Granted most companies are making a 15-30% profit on the hardware they sell (computers, stereos, etc.), for consoles, that is pretty good. Microsoft has sold both the xbox and xbox 360 at below cost! Its actually pretty normal for console producers to lose money when they sell consoles and get money from third party development and first party games. The fact that Nintendo is dominating in console profits and game profits is very impressive. FYI, I don't personally own a Wii, nor do I plan to, but you can't argue with the facts that Nintendo knows how to market!!!!!

Avatar image for sh1vers
sh1vers

wow i figured they would be making alot more on them considering its only a gamecube with motion controls

Avatar image for quincy0191
quincy0191

Lindbergh2007: "the games are not selling" "220 million games sold for the Wii this year" FAIL "Novelties are fickle things" "the Wii's nearly 35 million units in global lifetime sales easily outpacing the Xbox 360's nearly 23 million systems and the PlayStation 3's nearly 17 million units" FAIL "Nintendo has already abandoned thier base" "Nintendo will reportedly be responsible for 60 percent of the 220 million games sold " First-party=base, so FAIL "folks will soon get burned out on Wii" Good luck finding one for Christmas. FAIL. "it will die as being remembered as a "novelty console"" PS3 incorporating motion sensing tech after Wii controller announced+Xbox ripoff of Miis+Nintendo's ENTIRE HISTORY=FAIL "lack of decent third party support instead of a great console." Nintendo has nothing to do with third-party support, so it can't be blamed for the glut of crapware on the Wii. FINAL FAIL.

Avatar image for KhanhAgE
KhanhAgE

@Port5 You can earn six bucks mowing your neighbour's lawn? Good for you. But do you think it would be worth it to mow 35 million lawns to earn the same amount that Nintendo just did? Seriously (please) think about it.

Avatar image for ctg867
ctg867

I sincerely doubt it's that low. The tech is last generation stuff, and the added stuff like Wi-Fi and Bluetooth is being built into more and more phones. I call BS on this one, especially given that the cost to make a PS3, which is much more technologically advanced, is close to that of it's selling price.

Avatar image for VenomRitual
VenomRitual

lol of course 60% of the games sold for the wii are by nintendo. nealy every other game is shovel ware. that 60% is mario, zelda, metroid, wii fit.

Avatar image for lamprey263
lamprey263

well, they're also making money on their games, and from what I've heard/read the only games that seem to be selling on the Wii successfully are Nintendo published ones... not really a console for 3rd parties anyhow, I'm done with Nintendo published Wii games, I was all for playing Metroid Prime 3, Twilight Princess, Mario Galaxy, SSBB, but now it looks like all Nintendo has left up their sleeve is to port every GameCube game to the Wii with motion controls

Avatar image for cloud_strife007
cloud_strife007

Port5-Mow 35 Million neighbor's lawns, then come back and make that argument

Avatar image for kurpeanut18
kurpeanut18

@TacoJelly: Uhh no. Making any profit at all on console sales is actually pretty rare

Avatar image for Toastman923
Toastman923

@port5: But imagine mowing 35 million lawns.. lol just kidding

Avatar image for SonicTheMonkey
SonicTheMonkey

Well when you multiply that $6 by 35,000,000, that adds up to quite a bit of scratch.

Avatar image for chikahiro94
chikahiro94

Just did the math: given those numbers ($6 x 35 million), that's $210,000,000 made before games, game royalties, accessories, etc. I'm sure some of that money is spoken for already (R&D, investors, etc), but man... Profit through volume... gotta remember that @_@

Avatar image for Port5
Port5

that really doesn't seem worth it. I can earn six bucks mowing my neighbor's lawn

Avatar image for Neilo_
Neilo_

man, when you look at this out of context, $6 is a very feeble amount. idk what the overall average is for entertainement hardware and software, but nintendo ftw in context

Avatar image for xcollector
xcollector

You think with all that money Nintendo could actually make more games for the system or are they waiting for Wii 2 HD?

Avatar image for AntoniustheGrey
AntoniustheGrey

What do they mean by "pocket"--is that like going back into retained earnings or is that revenues or gross profit or what