[quote name='PittsburghAfterDark']Please explain to us simpletons how Game Cube made money using off the shelf processors and chipsets just as the Xbox did but the Xbox lost money using the same strategy you claim Nintendo used to make money.
Yes, I'm baiting him. Yes, he won't be able to answer the question. I just need a good fanboy statement I can laugh at if he answers.[/QUOTE]
First, I never called anyone a simpleton. Ur implication that I believe I am smarter than u is your own conceit. I am no smarter than anyone else here, and I have been wrong about many things before (just ask Dafoomie), and I am entirely willing to admit it (are you able to do the same?).
Second, I
can answer your baited question, and with a full slate of evidence. In this particular case, I just happen to be well read, and good with Google.
The off-the shelf parts are not the same on each console. XBox had used an advanced custom developed Video Card, where the GameCube used an ATI card that was already on the way to market -- MS spent their own research dollars, while Nintendo licensed a card that was ready for launch. The XBox's hard drive and DVD compatibility added additional cost, being added in the days before DVD players could be bought for $30.
Check out:
http://seattle.bizjournals.com/seattle/stories/2003/09/22/story7.html?page=3
According to filings with the Securities and Exchange Commission, Microsoft's Home and Entertainment group, where the Xbox resides, lost $924 million last fiscal year, up from an $874 million loss the previous year.
http://nintendoinsider.com/site/EEEZuAypVuTuOJPzyb.php
Though Microsoft doesn’t announce how much it costs to make an Xbox, analysts have put the system at over $300 – some say $375, while more conservative analysts put it at about $325. While it is true that the price of manufacturing lowers over time, and it may have dipped below $300 by now, Microsoft is now selling the Xbox cheaper than it did at launch -- $150, compared to $300. Microsoft is losing at least $100 per system sold, and possibly more, and coupled with other expenses, as you’ll see below, they haven’t exactly been able to make up for it.
Sony is facing a similar situation with PlayStation Portable (and the PS2 before that, but the PS2 was able to overcome this obstacle very quickly because of strong sales). A recent Bloomberg report says it costs 30,000 yen to make a PSP, or roughly $275. Sony is selling the PSP for $250 in America, so a $25 loss is not bad at all. But the system goes for a low 19,800 yen, or roughly $185, in Japan, meaning a $90 loss per system. Sony does say the price of manufacturing should go down soon, though, once the outsourced companies making much of the system’s parts see the system is successful.
In the final corner, Nintendo has it much better. When the system wars began, Nintendo GameCube was actually making money for each system sold, as Nintendo didn’t bother with all the extra non-gaming functions of its competitors, like DVD movie playback. The system was still making Nintendo money at $150, and it wasn’t until its $99 price tag that it was estimated Nintendo was losing money – but only in the single digits.
http://www.gamepro.com/nintendo/gamecube/games/news/22820.shtml
http://www.red-mercury.com/mmceo/mmceo05_20_2002.html
http://www.theregister.co.uk/2004/07/30/nintendo_q2_results/
Quote:
A surge in sales of its GameCube console pushed Nintendo's second-quarter income almost 100 per cent over the same period last year.
For the three months to 30 June 2004, Nintendo achieved a net income of ¥22.6bn ($202m), 96.5 per cent up on Q2 2003's ¥11.5bn ($103m).
Driving the gain was a 712.5 per cent increase in unit shipments, from 80,000 in Q2 2003 to 650,000 this past quarter.
And finally, let's not forget the XBox had no pre-existing user base at launch, and Nintendo's user base is legendary.