Nintendo nets $6 profit off each Wii

Videogame giant bucks loss leading trend set by rivals Sony and Microsoft

Nintendo secures an operating profit of USD 6 off of each Wii unit sold, according to an analyst at Macquarie Securities.

Analyst David Gibson explained to Forbes that while Sony makes a loss on each PlayStation 3 sold and Microsoft has the potential to break even with the Xbox 360, Nintendo makes a profit.

The Wii is expected to sell more software than any other console this year, with a target of 220 million units, compared with 120 million for PS3 games and 125 million for Xbox 360 titles. On top of this, the article details how Nintendo capitalises on its position by selling 60 per cent of Wii games itself, compared with 30 per cent for Microsoft and 15 per cent for Sony.

Part of this success is placed upon Nintendo's practice of keeping price down, with the console itself retailing for around USD 250, compared to the PS3 at around USD 400, while Wii games are priced around USD 50 rather than USD 60 on the other two consoles.

Hiroshi Kamide, director of research at KBC Securities, Japan, commented: "The key thing about Nintendo is they want their things to be at price points that anyone can respond to."

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Latest comments (1)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.13 years ago
Makes for an interesting 3rd party sales debate if you do the math.

Wii - 40% of 220 million = 88 million units
X360 - 70% of 125 million = 87.5 million units
PS3 - 85% of 120 million = 102 million units

Can't leave out revenue.

Wii - 88 million x $50 = $4.4 billion
X360 - 87.5 million x $60 = $5.2 billion
PS3 - 102 million x $60 = $6.1 billion

If these estimates hold up, it should be very nice for 3rd parties no matter which (hopefully all) console they support.
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