Iwata: Wii U Will Be Sold At A Loss


Nintendo President, Satoru Iwata, has confirmed during a briefing with investors that the Wii U will be initially sold at a loss.

“The Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable.”

“In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability.”

This news isn’t exactly a massive surprise as products do tend to run at a loss at the beginning of their life cycle due to costs amassed through R&D, manufacturing and marketing. However Nintendo do usually attempt to run at a profit from the off; it seems the volatile market along with the massive competition from other consoles and even the mobile gaming market has forced Nintendo to set the price lower than they had initially wanted to.

So if you were expecting a 3DS-like price drop after a few months I wouldn’t hold your breath! It looks like the Wii U will hold its current price tag for a while yet.

There was something positive for Nintendo to take from the briefing however with the news that the 3DS is no longer being sold below the cost to produce which Iwata claimed hurt their bottom line last term.

[Sources: Eurogamer; Nintendo]

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Comments
2 Responses to “Iwata: Wii U Will Be Sold At A Loss”
  1. Well this is spectacular news and raises the stakes of this hardware release to a make or break statues for Nintendo. Really don’t know whether it’ll pay off or not. It all depends now on what the competition do. If we see new rival hardware soon after Wii U’s release or even an announcement of such, it could swing the balance against Nintendo.

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    • Andy Green says:

      Depends on a lot of things really, maybe they’re running at a loss on the first 5.5 million units and then hoping costs will have decreased after that allowing profit to begin again. Sony will almost certainly run at a loss at first for the PS4 so Microsoft have a decent chance of gaining some ground…

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