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article imageRetailer Mark-ups on Xbox 360 and Nintendo Wii Revealed

Published Oct 16, 2006, by Allan
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DailyTech reveals the cost and markup of Nintendo Wii and Xbox 360 at Comp USA. Turns out: Xbox 360 has slimmer profit margins but a greater net profit than Nintendo Wii.
The results:
XBOX 360 Premium: $399.99 (MSRP in USD), $384.21 (Cost in USD), 3.9 % (margin)
XBOX 360 Core: $299.99 (MSRP in USD), $292.09 (Cost in USD), 2.6 % (margin)
Nintendo Wii: $249.99 (MSRP in USD), $237.50 (Cost in USD), 5.0 % (margin)

Another source found on the page listed above gives you an explanation of pull strategy vs. push strategy (http://www.joystiq.com/2006/10/16/explainer-wiis-push-xbox-360s-pull/). This explains why some retailers get a greater margin (Nintendo Wii) as an incentive to "push" the product. Xbox 360, on the other hand, uses a "pull" strategy to increase demand through marketing and draw people into the stores to "pull" consoles off shelves.

Interesting read if you're curious about the upcoming console wars during the holiday season.
Source: dailytech.com external
article:40024:4::0

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