Tuesday, February 4, 2014

How much does Consoles really cost?



We have already seen in the last year several sites and articles discussing how much are Console manufactures making out of their latest consoles, and the result are manufacturing costs near to break even or even turn on a profit next to the Retail Price of the consoles.

Yet most sites seem to fail in the same mistake, the retail price is not how much money Sony, Microsoft or Nintendo get out of Each console sold, as this price includes a cut for the retailers, name it Amazon, Gamestop, Bestbuy, etc, in charge or sell the console to the population.

So to calculate actually how much are companies is Profiting (P), or not, out of each console, we need to calculate how much is really Earning (E) for each console sold at retail, so we will find out the Retailers Cut (RC) and subtract it from the Retail Price (RP), and then obtain the different between Earning and Manufacturing Cost

Saturday, February 1, 2014

Should Nintendo buy Capcom (Opinion)



"We built up cash reserves when earnings were strong. Because the entertainment industry ebbs and flows in wild swings, Mr. Yamauchi insisted it is vital to have deep pockets. Without savings, we could not have recovered from a single failure in game systems. Even now, we can afford many options because of our robust financial standing."

"We should abandon old assumptions about our businesses. We are considering M&As as an option." said Satoru Iwata, President of Nintendo, in an interview with publication Nikkei on the last days.

M&A refers to Mergers and Acquisitions, which mean Nintendo is considering acquire (buy) more studios/ Publishers to expand their work force (and IP portfolio) and/or create partnerships with other Companies that share their interests.
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Now what studio could buy Nintendo that could create a mutual benefit for both parties? I say Capcom is the perfect option.