14 DAY TRIAL // There's no doubt that Nintendo is the big winner of this console cycle. The Nintendo Wii has consistently been outselling both the Xbox 360 from Microsoft and the PlayStation 3 from Sony in 2008 and it seems that lifetime sales will surpass those of all previous gaming devices. And, in the process, the company is making a whole lot of money.
David Gibson, who is an analyst for Macquarie Securities, told Forbes he believes that for each console sold at the moment, Nintendo is making a profit of 6 dollars. It might seem quite a low figure but considering the fact that there were months when 800,000 units were sold on the North American market, this would mean a profit of 4.8 million dollars on one market and in just one month. None of the three major manufacturers has disclosed the profit registered by each console. It is worth mentioning that Nintendo is making a lot of money from publishing first party titles for the Wii.
Also, console manufacturers tend to sell their products at the exact cost of manufacturing or even below that in the first few years, hoping that technology advances will make production costs lower and allow them to make a profit. Until recently, the Nintendo Wii was the lowest priced of the home gaming devices, with Microsoft now positioning the basic Xbox 360 Arcade as being the cheapest, after having got a price cut in September.
Nintendo has also benefited from the scarcity of the Nintendo Wii. At the moment, the console is hard to find in brick and mortar stores, while on auction site eBay, the Wii is being sold for a bigger price than the retail one, which shows that demand is not slowing down. Expect prices on the secondary market to go up as Christmas draws near.