price for Nintendo's Wii video game console was likely insufficient to cover its fixed and variable costs.However,the price of its video games was set high enough to cover the video game console loss and deliver a handsome profit for the entire Nintendo product line.This example illustrates Nintendo's use of

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Nintendo used product-line pricing by setting the price of the Wii console lower than its costs while setting the price of video games high enough to cover the loss and generate profits for the overall product line. This allowed them to attract customers with a low-priced console and then make up the loss through the sale of high-margin video games.

Price for Nintendo's Wii Video Game Console Was Likely Insufficient