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Nintendo said to profit on Wii production

Consoles costs under $160 to manufacture?

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Nintendo may well be making so much profit on its Wii console it can well afford to replace broken Remote straps. According to a Japanese publication's assessment of the machine's innards, the console costs the videogames company less than $160 to assemble.

In a report published by Japanese business weekly the Toyo Keizai and relayed by Japanese-language site WiiInside, the most expensive component inside the Wii is the DVD drive, which, the paper estimates, costs $31. Next comes ATI's 'Hollywood' graphics chip, at $29.60. The IBM-designed and made CPU, 'Broadway', costs $13, the report reckons.

Add these items to the other components, roll in an assembly cost of $19.50 and you get a manufacturing cost of $158.30. The Toyo Keizai estimates that Nintendo's wholesale price is a cent less than $196. The consoles costs the consumer - if he or she can find one available to buy right now, of course - $250.

So, if the Toyo Keizai is right, Nintendo's making the best part of $40 for every console it sells, and by most accounts it's sold well over a million of them worldwide.

Don't forget, though, it has to cover the development cost, the money spent creating the Wii's on-board software, and the physical distribution and marketing costs, but it nonetheless establishes a nice pattern for Nintendo, which does very nicely out of games sales, whether Wii-specific titles or older ones made for previous consoles that the company can now sell again as downloads. ®

Read Reg Hardware's Nintendo Wii Review here

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