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Nintendo comments on Wii manufacturing costs, not planning price cut
Following Credit Suisse analyst Koya Tabata's estimation that Wii manufacturing costs are down 45 percent, Nintendo has come out from its corner swinging, ready to put down any and all speculation that a price cut for the console is due soon. In speaking to Edge, Nintendo said the depreciation of the U.S. dollar and British pound is also a factor, as from "launch in December 2006 to December 2008, the value of the pound fell by 43 percent against the yen," and, in the same period of time, the U.S. dollar and euro fell against the pound 22 and 18 percent, respectively.Ed Barton, analyst for Screen Digest, thinks that if Nintendo is to cut the console's price, it could first happen in Japan if "supply has truly equaled demand." Barton points to Nintendo's next financial earnings report, where any and all reduction in manufacturing costs should be evidenced in the company's operating profits. Though trying to gauge an improvement in Nintendo profits is kind of like finding a giant needle in a stack full of giant needles.
Analyst says Wii manufacturing costs down 45% since launch
Since the Wii released in November of 2006, it's progressively become a more profitable venture for Nintendo. Not just because it has been constantly flying off retail shelves, but because Nintendo has managed to drastically cut down manufacturing costs during its life, Koya Tabata of Credit Suisse suspects. In fact, Tabata says costs are down a whopping 45%, which could mean Nintendo is banking much more than the previously reported $6.Of course, any talk of reduced manufacturing costs is inevitably going to lead to talk of a price cut, which Tabata says is a real possibility. Emerging markets could be the first to see a price cut, Tabata commented. With Sony hoping to take market share away from Wii with its $99 PS2, it might be the right time for Nintendo to trim some fat.[Via Eurogamer]
