Wii manufacturing costs ring up to just $158?

We snuck a peek awhile back and found that Target itself was only making $12.50 per Wii it sold, and we knew the big N wasn't taking any losses on console sales at launch (unlike Microsoft and Sony), but is it really making money hand over fist? Per a shakily constructed Japanese comparison, it seems that Nintendo's brainchild is only costing $158.30 to manufacture, before you consider the Wiimotes and whatnot (not to mention marketing and distribution costs) that end up being bundled with it, while the 20GB PlayStation 3 clocks in at a whopping $805.85 (saywha?). Interestingly, there's a less-than-understandable $195.99 figure that mentions a "wholesale price," which could be a more realistic figure of how much Nintendo is shelling out when taking external costs (like Reggie flying all over the world) into the equation. Regardless, one thing's for sure -- Nintendo stands to make a sweet profit from the sold-out status its console is in, while Sony continues to fall deeper into a hole they hope will be redeemed with game / accessory sales. Of course, your Wii could end up costing you quite a bit more, especially if you don't have that recently-recalled Wiimote strap looked at.

[Via Digg, thanks Mike]

[kudos @ Dec 15th 2006 1:44PM]

360 and ps3 are selling at losses.

wii is the only one making a profit on the console? wow...


nintendo is our savior

[KineticOnline @ Dec 15th 2006 1:57PM]

The 360 is just about making a profit now, but it will be a while before they recoop the losses during the launch.

[Gil @ Dec 15th 2006 1:48PM]

Nintendo is your savior? You want to a manufacturer to make the price bigger? You're one screwed up consumer.


Those calculations don't factor in R&D costs. In the case of the Wii and the PS3 those are HUGE.

[kudos @ Dec 15th 2006 2:10PM]

"nintendo is our savior" is a signature reflecting their comeback all together, as well as their philosophy for this generation, not a comment reflecting the price.

[Christopher @ Dec 15th 2006 1:49PM]

Nintendo have somehow managed to pull off a minor coup imo - even with this spate of (pretty serious, if it happens to you) wrist strap failures, it still hasn't tarnished my opinion of the console. I still want one! they look like they're so much fun to play... And it's sad that, even with its higher-spec and game studio exclusivity deals, I'd rather have an X360 over a PS3.


Nintendo have played a very clever hand with their console, plus they released it just at the right time. Might be the first Nintendo console I buy since my (beloved, and totally worn-out) N64!

[JinKazama @ Dec 15th 2006 2:03PM]

Considering that these are probably List prices for the components you can subtract 20-30% from the cost listed to get Ninty's actual cost and 40-50% if the component is manufactured in house.

Nintendo is out to make a profit and they aren't interested in being a loss leader to do it...they want their money up front. I just hope they don't go the gamecube route, get the money up front and slowly let the console die by only putting out a good game every 3 to 6 months.

[Matt @ Dec 15th 2006 2:10PM]

Nintendo still should've charged $200 for the Wii. $50 for R&D and developing Wii Sports.

[Geoff Gibson @ Dec 15th 2006 2:16PM]

I just have to add this in.

"Your Wii could end up costing you quite a bit more, especially if you don't have that recently-recalled Wiimote strap looked at."

Nintendo has time and again stated that this is NOT a recall. Media outlets keep calling it that but a recall is where the company knows their product is defunct, so they call them all back in to get it repaired. Nintendo is not doing that. They are OFFERING free of charge a replacement strap to those who know they will be over-zealous with their wiimotes. Under normal circumstances the strap does work fine.

[Andir3.0 @ Dec 15th 2006 6:11PM]

Last time I checked the recall notice on my car, it said it was optional and they were paying for any repairs. Does that mean it's not a recall?

I mean it says they will replace my engine if needed at no cost to me if I want to bring it in to see if mine could potentially have the same problem. It sounds like the same thing to me.

[kaztm @ Dec 15th 2006 2:16PM]

What is shakily constructed is your article.

Why is the "Japanese comparison" shaky? Because it does not include marketing costs?

[Mr. B @ Dec 15th 2006 2:17PM]

Sorry but this article is total bull. It leaves out some components and, does not include manufacturing costs, maintenance of manufacturing facilities or possible bulk discounts on parts.

[Sha66y @ Dec 15th 2006 2:47PM]

Making anything on the console is good biz. The licensing is the high margin so it's all gravy on the hardware.

[Dave @ Dec 15th 2006 2:49PM]

I think people are forgetting something. Xbox and Playstation are flagship models for the huge companies Sony and Microsoft which gives them good-will and big marketing for their other products. Nintendo has only the consoles and the games, which means that they HAVE to make a proper profit from the start. Of course Playstation and Xbox will make profit in the end, but it is not AS important as for Nintendo.

[Gordy @ Dec 15th 2006 2:53PM]

Why is it when Apple's products are dissected the comments here don't point out R&D costs not being considered?

[Mike @ Dec 15th 2006 3:07PM]

To those that say the Wii should have a lower selling price:
So what if the parts of it costs significantly less than what the selling price is?

As a few have mentioned, yes, they do need to recover R&D costs. But there is a lot more to that.

Nintendo has many salaried employees. It has many more waged employees. It has to advertise and distribute the products. It has to pay rent and utilities. While I'm not too familiar with how things work in Japan, I don't believe that they give companies free access to warehouses, offices, and electricity.

All of these costs are allocated in one manner or another to the products they produce.

By covering these costs and then some, it allows Nintendo to gain a profit. This profit can be used for further R&D, whether it be new games or future consoles. If they cut the margins on their products so consumers could pay less, it could hurt Nintendo. The same is true for most companies in competitive industries. It could also hurt the consumers. Let's say the DS was a flop and didn't sell. Nintendo wouldn't have those profits to rely on. Then, lets say the Wii also did bad. What, then, if Nintendo turned into Sega? We would be left with Sony and Microsoft making consoles. Less competition is rarely a good thing for consumers.

Wow, I said way more than I needed to, I'm sure no one will read it. Oh well.

[mike @ Dec 15th 2006 4:02PM]

"Why is it when Apple's products are dissected the comments here don't point out R&D costs not being considered?"

That people aren't factoring in overhead costs is absolutely LAUGHABLE... if Nintendo makes 30 bucks on a console, fine, that's great... these 'cost to make' things are retarded.. how much money did they spend figuring out which of the 93483 controller designs to go with?

*checks title

Oh, I see, manufacturing costs.. great.. soooo... basically, that number is meaningless. Thanks

[M. Rod Von Hugenstein @ Dec 15th 2006 4:30PM]

Who cares what is costs. The Wii will sell for whatever people will pay for it. If you don't like that a private company is making money then don't buy a Wii.

Also, don't forget that the raw materials and components are a small percentage of any product. Labor, design, distribution all have to be factored in when calculating the total cost of a product.

[Gunn Salelanonda @ Dec 15th 2006 4:52PM]

Actually, FWIW, the XBOX360 is *barely* profitable (more likely break-even) since it's estimated to only cost $323 to manufacture. The longer they can hold out without a price break, the better off they'll be.

http://www.2old2play.com/News/Xbox_360_Drops_40__in_Manufacturing_Costs

Good luck, Sony.

[Andy @ Dec 15th 2006 5:16PM]

Actually, the $158 seems a little high. Since they don't factor in the Wiimote, I would've expected manufacturing costs to be around $120. After all, this is basically Gamecube hardware with more memory.

[blake @ Dec 15th 2006 5:32PM]

The cost and profit of these units is really based on the number of them sold. The more they sell the bigger the profit margin, because the cost of development is constant. Similar to any other high tech item, in a few months the Xbox 360 and PS3 price will fall to remain competitive.

Based on this poll many people are picking Wii over the PS3: http://todayspolls.googlepages.com/home4

[KC @ Dec 15th 2006 5:46PM]

OMG. CPU + GPU + DRAM is less than $50.

Isn't it ironic that even with their lower cost of manufacturing, they can't keep the shelves stocked with Wiis?

[Gaget Extremist @ Dec 16th 2006 4:30AM]

"OMG. CPU + GPU + DRAM is less than $50."

It just goes to show how nVIDIA, ATI, AMD, and Intel are really jacking up prices. What ever happend to high end CPU's costing around $500 and high end GPU's $300 (9700 pro at launch)? It seems that they can charge double if they slap the words Gamerz or Gamer on the package, those words aint cheap to print!

[Vince @ Dec 15th 2006 8:38PM]

"Shakily constructed" is right. The component costs listed do not add up to the complete cost, let alone the whole sale cost. In the case of the Wii, the component costs are about $40 less than the $158.30 total cost claimed. In the case of the PS3, that difference is about $200.

Personally, I don't care that the indirect costs aren't factored in, those would be meaningless to include anyway, but if you're going to make a table like this, at least be sure that the listed prices and totals add up to the same number. geez...

[MultiPlayer @ Dec 16th 2006 10:06AM]

http://www.multiplayer.ro/2006/12/16/wii-manufacturing-costs-ring-up-to-just-158.html

[E71 @ Dec 17th 2006 7:13AM]

Hope those smug b******s over at Nintendo end up paying for Wii-remote accident lawsuits. That should level the playing field!

[zen @ Jan 9th 2007 10:21AM]

Of course they are making a profit. They suckered everyone to buy a previous generation console with a new controller. Basically you are getting bargain basement old crap with a shinny new controller.