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Posted by Aaron J. Bossig on 01/19/07 18:46
"Nomad" <user@#notme.com> wrote in
news:NWYrh.12881$w91.12005@newsread1.news.pas.earthlink.net:
>> Retailers don't make much profit on video game hardware, so the
>> sticker price you see for any given console is probably going
>> directly back to the manufacturer. Like anyone else, they make their
>> money on the games and accessories.
>>
>> So, comparing the retail price to what MS claims is the production
>> cost is, actually, a very fair analysis. The only other factor is
>> the shipping cost from the factory to the retailer.
>
> True, retailers don't make much profit on video game hardware but that
> doesn't mean they don't make ANY profit, especially major chains such
> as Best Buy.
The profit on most game consoles, if any, is significantly less than
the 5% you suggest later in your post. And yes, retailers often do
sell consoles at a loss, simply as a matter of status quo. They *have*
to sell the consoles to get people to come in for the games. To not
carry such a popular item would give them a bad image. But, the store's
cost on the product is extremely close to the sticker price. (IIRC, the
margin on my last two Nintendo systems was less than 70 cents. I checked.)
--
Aaron J. Bossig
http://www.GodsLabRat.com
http://www.dvdverdict.com
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