Credit Suisse Analyst: Manufacturing Cost of Wii 45% Lower than Launch

Jacob Mazel

According to an article in the Financial Times , Wii now costs 45% less to produce than it did when it launched in November 2006. The context of the article implies that Koya Tabata an analyst at Credit Suisse is referring to Japan, but production costs for Wii in western markets have probably followed a similar decay rate.

The analyst noted the drop in Wii production costs mentioned the drop because he believes that if the PS3 run of hardware success continues, Nintendo has the option of dropping the Wii price while retaining a profit on every Wii it sells in Japan.

A 45% drop in Wii manufacturing cost, using the current Yen-Dollar exchange rate, means that Wii costs no more than $137.50 to make, even though the system sells at $250 (25,000 Yen) in Japan. Nintendo has always sold the Wii at a slight profit, so it is likely the system costs even less than that to make.

Contact Vgchartz at jmazel@vgchartz.com

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