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The W - Video Games - Nintendo: thriving or lying? (Page 2)
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Guru Zim
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Since: 9.12.01
From: Bay City, OR

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#21 Posted on | Instant Rating: 8.83
    Originally posted by Smackfiend
    EVERY company loses money on their systems, it's just a matter of how much of a loss they're willing to eat. They make their money on software sales and liscensing fees to 3rd party software devolpers.


This is a commonly stated opinion, but I've never seen hard numbers to prove it.



Willful ignorance of science is not commendable. Refusing to learn the difference between a credible source and a shill is criminally stupid.
EddieBurkett
Boudin blanc








Since: 3.1.02
From: GA in person, NJ in heart

Since last post: 3 days
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#22 Posted on | Instant Rating: 7.11
Looks like gamespy (gamespydaily.com) broke the news.

Here (biz.yahoo.com) is the official press release.

Apparently the mystery product is a dual-screened portable system named the DS. I don't think anyone had this in the pool...



Time to go kick more dark side ass, KotOR style!
InVerse
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Since: 26.8.02

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#23 Posted on | Instant Rating: 4.91
    Originally posted by Guru Zim
      Originally posted by Smackfiend
      EVERY company loses money on their systems, it's just a matter of how much of a loss they're willing to eat. They make their money on software sales and liscensing fees to 3rd party software devolpers.


    This is a commonly stated opinion, but I've never seen hard numbers to prove it.


Back when the GameCube first launched, I read an article where Nintendo was talking about how it was common to lose money on console sales, but having refined their sales model over the course of several systems, plus manufacturing their own hardware, they were turning a slight profit on GameCubes. This was at the $200 price though, so I'm pretty sure they're losing money on every ale at this point.
Jaguar
Knackwurst








Since: 23.1.02
From: Phoenix, AZ

Since last post: 115 days
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#24 Posted on | Instant Rating: 5.56
GC never sold at $200. They started at $150 and dropped to $99 once the X-Box dropped from $200 to $150.

-Jag



"I'm going to go now and demand beer money from my representative. We simply must deal with the problem of my sobriety." - PalpatineW
EddieBurkett
Boudin blanc








Since: 3.1.02
From: GA in person, NJ in heart

Since last post: 3 days
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#25 Posted on | Instant Rating: 7.11
The gamecube was released in November of 2001 with an MSRP of $199.95.

(Its hard to find a link on how much something used to cost. Saying that, I'm sure someone will find better proof that this (gamespydaily.com).)



Time to go kick more dark side ass, KotOR style!
Jaguar
Knackwurst








Since: 23.1.02
From: Phoenix, AZ

Since last post: 115 days
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#26 Posted on | Instant Rating: 5.58
    Originally posted by Peter Main
    "At a suggested retail price of $199.95, consumers can purchase NINTENDO GAMECUBE and two games for the same cost as rival, current generation game consoles alone. It's like getting two games for free,"


The two hundred dollar pricetag was a package deal, it was only $150 for the Gamecube alone.

-Jag




"I'm going to go now and demand beer money from my representative. We simply must deal with the problem of my sobriety." - PalpatineW
komarkaze
Mettwurst








Since: 9.1.03
From: VA

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#27 Posted on | Instant Rating: 3.00
Gamecube never had a package deal before. It came out at $199 while PS2 and Xbox were at $299. The first wave of price drops in 2002 resulted with Gamecube at $149, and the others at $199. Microsoft later decided to bundle 2 games free with the $199 Xbox. With lagging sales, Nintendo refused to drop the price of the Gamecube, but instead gave an instant rebate to one of a few select Nintendo games, so it was like the Gamecube was $99 and you bought one $50 game. In 2003, PS2 dropped to $179 to make way for a $199 network adapter bundle, and Xbox dropped to $179. It wasn't until Q3/Q4 2003 that Gamecube finally dropped to $99 and included the Zelda bonus disk.



Truth takes time
Jaguar
Knackwurst








Since: 23.1.02
From: Phoenix, AZ

Since last post: 115 days
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#28 Posted on | Instant Rating: 5.58
PS2 and XBox were both selling at $299? I don't remember that at all. Maybe I should get my brain checked.

Sheesh, at 300 bucks a pop, it's no wonder I didn't buy either of them.

-Jag



"I'm going to go now and demand beer money from my representative. We simply must deal with the problem of my sobriety." - PalpatineW
dMr
Andouille








Since: 2.11.02
From: Edinburgh, Scotland

Since last post: 23 days
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#29 Posted on | Instant Rating: 5.66
    Originally posted by Jaguar
    PS2 and XBox were both selling at $299? I don't remember that at all. Maybe I should get my brain checked.

    Sheesh, at 300 bucks a pop, it's no wonder I didn't buy either of them.

    -Jag


Think yourself lucky.

The X-Box came out over here at 300 of our English pounds. Pounds I tell you!

Thats like 400 and odd of you fine dollars.

If they never made a profit on the systems at THAT price then they never will.



EddieBurkett
Boudin blanc








Since: 3.1.02
From: GA in person, NJ in heart

Since last post: 3 days
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#30 Posted on | Instant Rating: 7.11
    Originally posted by dMr
    The X-Box came out over here at 300 of our English pounds. Pounds I tell you!

    Thats like 400 and odd of you fine dollars.

    If they never made a profit on the systems at THAT price then they never will.


They weren't. Microsoft NEVER made a profit on the X-Box console, even at its highest price.

    Originally posted by Jaguar
    Sheesh, at 300 bucks a pop, it's no wonder I didn't buy either of them.


Pity my girlfriend. She bought me the PS2 shortly before that price drop. Then, she got me a Gamecube right before they started offering a free game with the $149 price tag.

And hey, don't forget about the PS2 shortage when it first came out, and they were going on Ebay for upwards of $500.



Time to go kick more dark side ass, KotOR style!
dMr
Andouille








Since: 2.11.02
From: Edinburgh, Scotland

Since last post: 23 days
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#31 Posted on | Instant Rating: 5.66
    Originally posted by EddieBurkett
      Originally posted by dMr
      The X-Box came out over here at 300 of our English pounds. Pounds I tell you!

      Thats like 400 and odd of you fine dollars.

      If they never made a profit on the systems at THAT price then they never will.


    They weren't. Microsoft NEVER made a profit on the X-Box console, even at its highest price.


But how do you quantify the cost per unit of one of those things.

It strikes me that the overwhelming majority of costs are overheads in the form of R&D which are very hard to allocate on a console by console basis.

After that its pretty much just putting the same bits and bobs together and finding ways to do so increasingly cheaply. And if anyone has the buying power to get computery bits and bobs at low,low prices then it would be Microsoft.

It doesn't seem outwith the realms of possibility for Microsoft (and other console manufacturers) to say they never make a profit on their consoles to make people:

a) think how cheap they must be now or
b) think how grateful they should be that the company didnt make a profit even at the inflated price they paid when it first came out.

Incientally I don't subscribe to the notion that big business is evil and must be punished (I own both an XBox and PS2), I've just always thought it a little strange that companies would be so willing to have this information unchallenged in the public domain if there wasn't a little more to it.



Guru Zim
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Since: 9.12.01
From: Bay City, OR

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#32 Posted on | Instant Rating: 8.83
I bought my first PS2 as a bundle on Amazon.com for around $500. I got smarter before I opened it, though, and returned it.

I paid $300 for my second PS2 which is the one that I'm still using now.

I paid $179 for my Xbox and $149 for the Gamecube.

These machines are all using old technology at this point. The Game cube is less than 500mhz. The Xbox is a 733 if I remember correctly. PS2 is even slower.

Here's an emachines system for $399 with a keyboard, mouse, 40 gig HD, speakers, 256 megs ram, etc - way more than you get for any of the consoles.

http://www.emachines.com/ products/products.html? prod=eMachines_T2642

You explain to me how emachines, who have to redesign their models every 6 months, can do this so cheaply - but a design like the PS2 that uses older tech, has economies of scale, and has sold over 15 million units - HAS to be a loss for the company.

It's a friggin DVD drive ($30 retail), video card ($30 retail), CPU ($50 retail?), Case + Powersupply ($30 retail) and some custom bits. You are telling me that they can't fab this cheaper than $179 with the wholesale buying power of Sony (plus an almost 4 year production run of components?)

I just don't buy it. I know everyone says it, and everyone believes it, but the numbers don't add up in my opinion. If Sony, Nintendo, or Microsoft came out and broke it down on the record (since they are publically traded companies, and they would have repercussions for lying) then I would believe it.





Willful ignorance of science is not commendable. Refusing to learn the difference between a credible source and a shill is criminally stupid.
drjayphd
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Since: 22.4.02
From: Long Island

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#33 Posted on | Instant Rating: 6.95
Guru: Doing the math sez $140, not counting the custom parts. Then there's advertising, etc. We don't have the real numbers, so we can't say, but I can see them breaking even at best with that price point.



DEAN's Nuggets of Wisdom:

"A-Train could wear a Vampirella outfit and I would toast a load to it."
dMr
Andouille








Since: 2.11.02
From: Edinburgh, Scotland

Since last post: 23 days
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#34 Posted on | Instant Rating: 5.65
    Originally posted by drjayphd
    Guru: Doing the math sez $140, not counting the custom parts. Then there's advertising, etc. We don't have the real numbers, so we can't say, but I can see them breaking even at best with that price point.


But I think Guru was implying that with the overwhelming buying power of a Sony or a Microsoft you could easily knock, say 30% off that $140. Thats assuming they couldn't make the components in house (or don't already do so) for a lot less.

As for advertising, after the initial sales push, the majority is done through sponsorship (for example the Champions league) with TV adverts for games themselves ensuring that the brand is rarely off our screens.

Say even if they spent $500m on an initial ad campaign with a further $900m on sponsorship throughout the consoles lifetime, with 70m PS2's sold to date that still only tacks $20 onto the price.

I know theres a fair amount of guess-timation on some of the figures here, but even allowing for that I still don't see how they would never have made a profit. Especially with the Xbox and PS2 originally going for almost double their current retail prices.



jerm
Cotto








Since: 12.12.03
From: wangopolis

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#35 Posted on | Instant Rating: 6.56
I'm nearly certain Sony manufactures every part in their system, and would bet that Nintendo does as well, except for the ATI graphics chips. MS doesn't... If you look at their specs you'll see things like Intel CPU, Western Digital HDs and NVidia chipsets. Analysts were reporting that the XBox was losing from $20 to $150 on each sale... two years ago. Like Zim said, how much money could they possibly be losing on a machine that includes a 733 mHz processor, 64 MB of RAM, and a whopping 8 gb hard drive?

And as dMr pointed out... the brands are known enough now that they don't have to advertise.

(edited by jerm on 21.1.04 2250)
EddieBurkett
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Since: 3.1.02
From: GA in person, NJ in heart

Since last post: 3 days
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#36 Posted on | Instant Rating: 7.13
It doesn't feature a specific price breakdown, but Click Here (wired.com)

    Originally posted by Wired Article: page 3
    The Xbox will sell for $299 at retail - losing as much as $110 on every box sold - and Allard wants to get the retail price to $100 as quickly as possible.


Since then, MS has refined the manufacturing process to make it cheaper. Sony has done the same. I'd presume Nintendo has, but they had a large backlog of 'cubes to clear out, so they may not need to.



Time to go kick more dark side ass, KotOR style!
Socks
Landjager








Since: 25.6.02
From: Ottawa

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#37 Posted on | Instant Rating: 6.21
    Originally posted by jerm
    I'm nearly certain Sony manufactures every part in their system, and would bet that Nintendo does as well, except for the ATI graphics chips. MS doesn't... If you look at their specs you'll see things like Intel CPU, Western Digital HDs and NVidia chipsets. Analysts were reporting that the XBox was losing from $20 to $150 on each sale... two years ago. Like Zim said, how much money could they possibly be losing on a machine that includes a 733 mHz processor, 64 MB of RAM, and a whopping 8 gb hard drive?

    And as dMr pointed out... the brands are known enough now that they don't have to advertise.

    (edited by jerm on 21.1.04 2250)


That is all good and well, but what about R&D? What about paying there staff for development. What about Intel, WD, possibliy recieving a kick back in sales from every console that leaves the shelves?

Parts are cheap...fine. Why is it then a laptop is worth far more then a regular tower? Probably there is more that goes into developing a smaller, more compact system, then it would for a tower with almost 2 cubic feet.

What about cooling? Work that video card as hard as the consoles do, you are going to have to cool it....

Lots goes into it. I am sure you cannot just make an Xbox out of a P3 you have at home...



This Space For Rent...

Inquire within.
jerm
Cotto








Since: 12.12.03
From: wangopolis

Since last post: 2066 days
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#38 Posted on | Instant Rating: 6.56
Sony is a successful company, I'm sure they've figured it out. Microsoft is a rich company, if they haven't figured it out, they can afford to lose money.
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