Quoting cmaeditor:

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Quoting nolesrule:

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And would HD DVD really be cheaper if Toshiba wasn't taking a loss on every player sale in order to increase sales volume? It's an unsustainable economic model where even the cheap off-brand Chinese manufacturers can't compete for a profit.

Isn't this the same model Sony is using by losing money on every PS3 sold. Sony taking a los on every PS3 sold to give themselves the largest install base of Blu-Ray players and it's no big deal, but if Toshiba decides to use the same tactic it's an unsustainable economic model to increase sales volume and unfair competition? Pot meet Kettle.

The video game business is all about selling the hardware at a loss for the first few years and making your money on software sales. Every gaming console has always lost money when it came out. Be it Nintendo, Sony or Microsoft. It's the nature of the beast.

Where this differs from DVD/HD DVD/Blu-ray players is that you have other CE's that want to make money, not lose money. Well, in the case of HD DVD, there is really only one CE (Toshiba) to lose the money. As for the others, the only CE with a studio is Sony, so they are really the only company that can recoup their losses on siftware sales. The other CE's have to rely on the hardware sales to profit. With Toshiba going so low, what other CE's would want to lose money on going HD DVD?

Quoting pplchamp:

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The video game business is all about selling the hardware at a loss for the first few years and making your money on software sales. Every gaming console has always lost money when it came out. Be it Nintendo, Sony or Microsoft. It's the nature of the beast.

I guess Nintendo didn't go to the same marketing school as Sony and MS

http://www.gamesindustry.biz/content_page.php?aid=21218
http://arstechnica.com/news.ars/post/20060915-7752.html
http://www.reghardware.co.uk/2006/12/18/nintendo_wii_profit_on_production/

Quoting Nadja:

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Not quite, Overseer, the Wii was certainly released at a loss to begin with, however Nintendo managed to turn this around with uncanny speed due to the demand outstripping the supply so.

Please read the links by RossRoy above you.

Quoting Nadja:

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Not quite, Overseer, the Wii was certainly released at a loss to begin with, however Nintendo managed to turn this around with uncanny speed due to the demand outstripping the supply so.

Overseer and RossRoy are correct.  The Wii was making money right out of the gate.  It is the only console that can make that claim.

Here is a link that is not a 'Nintendo says' article.  I have included the important bit below,

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Nintendo President Satoru Iwata promised from the very beginning that the Wii console would generate a profit on day one. While 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.

Quoting Agrare:

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Also, the third article listed by RossRoy wasn't 'Nintendo says' either

-Agrare

Yes I did acknowledge that when I first typed a response, but didn't add it back when I edited it before posting. That one was a report of what another magazine had worked out about the hardware costs compared to retail price. Again it didn't acknowledge anything in terms of R&D or labour costs etc...