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Wii gives its outsourced companies tremendous profit boost |
Listed in: Wii Tags: Epic Games, Mitsumi Electric
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We all know that the Wii is now the fastest-selling console to date, but what about the companies that Nintendo outsourced for the Wii's innards? According to Soichiro Fukuda, an analyst from Nikko Citigroup, Nintendo's suppliers and the companies who pitch in the Wii assembly effort has seen their profits rise quite dramatically.Mitsumi Electric, the company that supplies the Wii's LAN module and Nintendo DS parts can attribute 40 percent of its profit from Nintendo. Another outsourced outfit, Tabuchi Electric, had its profits spike up to an astounding 492 percent since they started manufacturing AC adapters for the Wii.
It's nice to hear that the companies the Nintendo tapped for Wii production is getting their own chunk of success and saving on production costs at the same time, like what Epic Games is benefiting from outsourced Chinese game studios.
Of course, happy companies mean better output. Analysts in Tokyo noted that Nintendo won't have any problems with increasing production to meet high demand. Said an analyst:
Nintendo's strategy has always been to have more than one supplier for the same part so there are no shortages. This way, Nintendo always gets the best price and production is not an issue.
It's no surprise, considering that Nintendo is now making a big profit per Wii sold. Wiis sold in the US haul in a nice US$ 49 profit from each Wii console, while Japan and Europe net about US$ 13 and US$ 74 respectively.
Via Financial Times
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Comments
come on!
if ur selling straps for stuff like random noname ones your profits is gonna be bad. but if u get a contract with like sony for the psp or with nintendo for their controllers NO ***** ur profits gonna go up! because ur margin is so much greater!
PLUS THE WHOLE POINT FOR THESE PEOPLE OUT SOURCING IS FOR THEM TO SAVE MONEY BY RIPPING THESE OTHER FORIEGNERS OFF BECAUSE THEY DON'T WANT TO GIVE AMERICAN EMPLOYEE'S INSURANCE AND HEALTH COVERAGE, OR A HIGHER PAYCHECK THEN THEY CAN GIVE TO SOME GUY LIKE IN INDIA who will gladly take like 10 bux compared to an american looking for 100.
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Second thing : They're outsourcing the production of the different parts of the Wii, but "Mitsumi electric" and "Tabuchi electric" are Japanese companies. Granted, they may have factories in China or India to reduce production cost, but nothing in the article gives you clues about this. The only thing outsourced to China in the article is Epic's dev studio... -_-
That being said, moving industries to "cheaper" countries definitely sucks, but unfortunately I don't see things change any time soon. >_
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