Chapter 978

In Iwata's slightly skeptical eyes, boss Jia completed the first half of the contract negotiation with Nintendo.

First of all, boss Jia's Daqian has determined the contract to produce 5 million N64 within three months. If the task cannot be completed, we need to pay liquidated damages of US $100 per N64.

Reasonable, the penalty is fair, not too high.

In order to help Daqian's production, Nintendo needs to fully assist Daqian's production, such as providing a full set of drawings, parts only available to Nintendo, ordering channels for various parts, and 20 front-line production engineers.

At the same time, Nintendo also needs to help Daqian purchase more than 100 professional equipment. These equipment can't be bought with money. Nintendo must come forward to get them.

Anyway, in a word, Nintendo should provide all possible help to Daqian. Boss Jia believes that Nintendo will do it. After all, they are in urgent need of N64, and they will not destroy Daqian's production.

"Mr. Iwata, the details of the contract have been very perfect. We have no opinion, but we don't know how much price Iwata is willing to give!" after talking about the details of the contract, there is the most critical pricing problem left.

Boss Jia asked faintly.

"Well..." Iwata hesitated, because Nintendo has its own production plant. Before, the production tasks of the host were completed by Nintendo itself.

Although about 60% of the parts are purchased from suppliers, there is no doubt that these mainframes are produced by Nintendo itself.

So Nintendo has never had the experience of OEM the whole machine to others. Naturally, it doesn't know how to quote.

So Iwata began to calculate the cost of producing an N64, which was $152.75.

The price of the N64 is $199, so an N64 has a profit of $46, which seems pretty good.

But this is just an illusion, because the price N64 gives dealers is not this price. After all, dealers also want to make money, so the actual ex factory price is $169.

It seems that there is still a profit of $16, but if you add various taxes such as consumption tax, value-added tax and customs tax, the profit of $16 will be almost consumed, and Nintendo will even subsidize the price of nearly $10 for each machine.

It can be said that Nintendo will lose money every time it sells a machine.

In fact, Nintendo could have set the price higher, but the price of PS is $199. If Nintendo is higher than this price, it will not be competitive in price.

So Nintendo can only keep the price down to $199 to compete with PS.

Of course, you don't have to think Nintendo is stupid to do so, because the profits of this industry have never been on game consoles. Almost all game consoles have been sold at a loss since ancient times.

After all, the real profits of the console industry are in the game itself.

Every time the N64 sells a game, Nintendo can get a profit of about $10, that is, as long as it sells a game, the missing cost of an N64 will come back.

After that, every more game sold is Nintendo's net profit, and it is obviously impossible for players to buy only one game for one game console, so as long as the game console can be sold, Nintendo can make a lot of money.

Cough, let's get down to business. When it comes to the price, Iwata Cong began to think about it. With Nintendo's technology and equipment and the ultimate cost compression strategy, the cost of each machine is nearly $153, so I'm afraid it's difficult to achieve this price.

Daqian obviously won't do the business of losing money.

Or give him $160?

Iwata Cong muttered in his heart, but in this way, the cost of N64 will increase by $7. Yamauchi Pu knew that he might not want to kill himself alive.

However, even the purchase price of $160 is estimated to be low, because if they give this list to other enterprises, they may offer a price of more than $200. After all, not everyone can reduce the cost as much as Nintendo.

But if the price is $153, Daqian must not do it. Hey, how to give the price! I'm too hard!

Iwata Cong's heart turned back and forth for a long time. Finally, he decided to quote according to his own production cost. If it's too low, we'll talk again.

"We can offer 152 dollars for each machine!" finally, Iwata said.

"It's too low!" boss Jia immediately wailed. "Mr. Iwata, you know, we started to produce game consoles for you from scratch. We have to spend money to buy new equipment. Your price of $152 is too low. We can't make money at all. We have to lose money!"

"Sure enough, the other party refused..." Iwata Cong sighed and felt that his price was too much, so he bit his teeth and fought for the consequences of being scolded by Pu in the mountain "That's $155, which is the highest price I can give, otherwise I really... Hey, Jia Jun, to tell you the truth, the production cost of $152 is Nintendo's own production cost. The price I give you is even higher than our own production cost. We are already very sincere!"

"So..." boss Jia pursed his lips and seemed to be trapped in extreme thinking and calculation. Finally, he said, "OK, we can barely accept the price, but Nintendo must promise us that after the order of 5 million is completed, we must continue to give us N64 orders, and the number of orders must not be less than half of the total sales of N64."

"Otherwise, if I buy the equipment for the production of N64, I will be blind and put it there as air!" boss Jia sighed.

"This......" Iwata Cong hesitated for a moment, then said "If so, the price must return to the price of US $152, and the order price must be recalculated every six months. After all, the price of international electronic components is falling, and the cost will continue to fall. Our purchase price must also change. We can't lose the original N64 forever."

"OK, I can promise you!" boss Jia thought for ten minutes before finally agreeing to Iwata Cong, but Iwata Cong still needs to ask for instructions from Pu in the mountain.

Iwata Cong thought that when Yamauchi Pu saw this contract and the purchase price was even higher than his own production price, his eyes would be angry.

However, I didn't expect that shannei Pu agreed very calmly. He wanted to come to shannei Pu and understood that time is the most important cost. He didn't want to waste time, so he promised so readily.

So the next day, the two sides happily signed the contract. Then boss Jia left Nintendo in a hurry and said he was going to arrange the purchase of equipment and raw materials. He also had to negotiate with suppliers to try to keep the price down again.

What Iwata didn't know was that after leaving Nintendo, boss Jia sat directly in his car and ordered his secretary to distribute the already prepared production plan to the companies under the Daqian group army.

Finally, these companies will send the finished products to Tianxing machinery, which will be responsible for the final production and assembly.

No way. With the development of these enterprises, everyone is crying for food. Many companies have no meat to eat. Boss Jia, as their big boss, must be responsible for finding food for them.

"Chairman, our production cost has been calculated!" a few days later, the secretary gave a report accurate to five digits after the decimal point to boss Jia. Boss Jia looked down and the final total production cost was "98.3254 US dollars"

"It's still too high!" boss Jia sighed and shook his head "For the following companies, we still need to find a way to reduce the cost by $10. After all, all the chips are given to you by the head office at the cost price. They can't play tricks with me. I think there is at least $15 in the price. You can't be too dark. Don't think I'm the boss and you can bully me!"