Ben Gilbert: belief

Transcript context

…Much better. In the intervening two years, all the revenue and profits that Nintendo of Japan, Nintendo Co Ltd, the parent company, was making allowed the whole company to be in a much better position to whether the investment they're going to have to make to re-educate the American market when they do launch. Just to put some numbers on that for the first couple of years of the Famicom in Japan, not only are they selling every piece of hardware that they can make. Every console that they sell has what comes to be known in the industry as an attach rate, the number of games that are sold with it, going up to 11 or 12 games per console, not per year, but for the life of the console. I couldn't actually find what the retail price of Famicom cartridges were in Japan at that time. Let's assume they were comparable to the US, which would be ¥7000–¥10,000, half-ish of the price of the console. If you're selling 12 games at half the price of the console, you're making another 6X the console revenue at 80% gross margins. It's just a cash flow spigot. That attach rate is high even relative to the big consoles today. I think PlayStation and Xbox, it's different with the subscription stuff today, but target a seven-game or eight-game attach rate. What did you say at 11-game attach rate? Eleven to 12.…

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