Originally Posted by ShawnPeters
I think it's entirely feasible that Nintendo would sell the GameCube hardware at a small loss at this point in the system's life. The reason being that most people buy the system to play Nintendo games, and Nintendo knows they'll easily sell at least a couple of their own titles per system sold. At this point, each game sale is almost pure profit - therefore, overall profit on a system sale, even at a hundred smackers.
Of course, none of this has any numbers to back it up, but it seems logical to me.
Solid theories up until
|At this point, each game sale is almost pure profit
Unless they have indentured servants Nintendo must pay their artists, programmers and developers. They then need to pay for the disks, printing of instructions and packaging. Then they must pay to have the product shipped to retailers. And of course they market these games in television and print.
Thats all eating into the retail of the game sold. We are not talking about 5+ million or even 2+ million sellers here. For all the time, effort and expense put into a Nintendo first party game we are looking at sales of 100K+ to almost 2M. Sure the 1.5M games like SMS probably make a tidy profit but what about Pikmin 1 and 2? What about Luigi's mansion and F-Zero?
Many of these produced units will go entirely unsold or sold off for $5 to $10 in clearance. There will be no profit from these. (Pikmin 1 and 2, FZero and Metroid were all part of the recent $10 sale Toy's R Us did to clear out old inventory they could not move)
On the GB side Pokemon Red and Green alone sold 2.6M copies and certainly cost less to deliver to market than any of the under 2M selling GC titles.
Again the entire linup of first party games does not equal the sales of the big two on N64. (SMB64 and OOT sold just shy of 20 million units!) that means even if they were "pure profit" then the profit for GC is a tiny percentage of the N64 profit and that can't help the GC be considered a 'success" very much.
The GC is a speed bump in Nintendo's history. Given how many AAA systems they have released (NES, GB, GB color, GBA, SNES, GBA SP, DS and N64 (Slightly lesser extent than the others but nobody was expecting Sony to come out so strong) having two lemons (VB and GC) is hardly a long term problem.
HOLY SHOOT! Another number to put the sales of GC first party titles into perspective:
Thats the number of units for Famicom Mini version of Super Mario Brothers in Japan only. A TWENTY year old game released 6 months ago has outsold most GC first party titles!
Not quite the 40M the NES version sold but hey a damn good number for 2005/2006.