Wii U Will Sell at a Loss
Nintendo revealed during investor briefing.
When the Wii U launches in November, it will be selling at a loss Nintendo revealed during an investor briefing.
Nintendo President and CEO Satoru Iwata stated that the console is selling “below cost.” Meanwhile, the 3DS is no longer selling at the loss it once was.
“In addition to the yen’s continuous appreciation, 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,” Iwata said in a statement. “Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve “Nintendo-like” profits within this fiscal year.”
Iwata also noted during the briefing that over 250,000 Wii U pre-orders have been taken at GameStop alone.
“we selected [a price] that consumers would consider to be reasonable.”
Some may say that it will sell “at a loss.” I see this as a wise business move: take the hit early so more people buy over the holidays, which will ramp up your sales in the next financial year. Considering consoles upgrade every eight or so years, it’s not a huge blow.