A Japanese analysts claims Nintendo's Wii console is pretty profitable. He claims that with the current currency conversions the firm is making about $74 per Wii in Europe, $49 in the U.S. and $13 in Japan.
hile Nintendo has not disclosed exactly how much it costs them to make the Wii console, a new report in the Financial Times cites Nikko Citigroup analyst Soichiro Fukuda who estimates that Nintendo's gross profit per console is 1,500 yen in Japan, 5,600 yen in the U.S. and 8,500 yen in Europe. That equates to about $13, $49 and $74, respectively.
Fukuda says that Nintendo is able to make more money on the console in the U.S. and Europe because of a slightly higher retail price and the bundling of the Wii Sports software. While the Wii is a profitable endeavor for Nintendo, the company's rivals Microsoft and Sony have yet to make money on their new platforms. Microsoft is aiming to make a profit in its Xbox division in 2008, while Sony likely won't profit on the PS3 until the following year.
In the meantime, the Wii has surged, reportedly taking the #1 position worldwide with 9 million units sold. And following comments by Nintendo of America President Reggie Fils-Aime that Nintendo would have "unprecedented" supply this holiday season in North America, analysts in Tokyo expressed similar sentiments that the company would have little trouble ramping up production. "Nintendo's strategy has always been to have more than one supplier for the same part so there are no shortages," said one analyst in Tokyo. "This way, Nintendo always gets the best price and production is not an issue."