Nintendo Wii production cost has fallen 45 percent

Credit Suisse analyst Koya Tabata said in a recent note that the production cost of Nintendo's Wii console has dropped 45 percent since its launch about 2.5 years ago. This gives Nintendo plenty of room to cut the price of the console to boost sales, while still making a healthy profit. Additionally, Tabata also thinks Nintendo could introduce a low-cost version of the Wii in emerging markets.

That sales of Wii hardware now depend on game launches may be an indication that the novelty of its controller – which measures motions by the player rather than button presses – has faded, at least in Japan.

Analysts, however, remain optimistic about the Wii’s prospects. Koya Tabata of Credit Suisse said in a recent note to clients that the cost to Nintendo of producing a Wii has fallen by 45 per cent since its launch. That would give Nintendo the scope to cut the price of the console if needed to stimulate sales.