[Sigia-l] Game Console Business Model (Was: WhatsWrongWithU)

[Jared M. Spool]

Having many retailers as clients, I can tell you they don't make  
money on the consoles. They use them as loss leaders or, in the best  
case, small margins. The point is to get the profits on the games and  
accessories, which have huge margins.

Jared


On Feb 12, 2007, at 1:34 PM, James Melzer wrote:

> I doubt retailers have margins that fine. Most toy retailers double
> the wholesale cost to calculate their retail price. You gotta keep the
> lights on and pay the staff, after all. I don't know much about
> electronics retailers, but everybody in retail has basically the same
> overhead.
>
> ~ James
>
> On 2/6/07, Dave Chiu <dave at d4v3.net> wrote:
>> On Feb 6, 2007, at 5:02 PM, Timothy Karsjens wrote:
>>
>>> It is the business model of any console manufacturer to lose money
>>> on the hardware itself and like a previous poster said, make money
>>> on subscriptions and software.  Sony and Nintendo do it as well.
>>
>> Actually, I was surprised to find out that the Nintendo Wii has a per
>> unit manufacturing cost of under $200, which means Nintendo is
>> actually making money on their consoles, assuming a retail price of
>> $250.
>>
>> http://www.engadget.com/2006/12/15/wii-manufacturing-costs-ring-up- 
>> to-
>> just-158/
>>
>> Dave
>>
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>
>
> -- 
> James Melzer
> http://www.jamesmelzer.com
> http://del.icio.us/jamesmelzer
> ------------
> IA Summit 2007:  Enriching IA
> Rich Information, Rich Interaction, Rich Relationships
> March 22-26, 2007, Las Vegas, NV
> www.iasummit.org
> -----
> When replying, please *trim your post* as much as possible.
> *Plain text, please; NO Attachments
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