Wii U: Nintendo to Sell Console at a Loss
For those interested in the new offering from Nintendo, it may interest you to know, that according to a statement today released by the Japanese industry giants as revealed that the game changing console, the Wii U, will actually be retailing at a loss for the company from launch.
The announcement comes in an investor briefing and is partly in response to yesterday’s revelation that the company’s annual net profit has been reduced. Selling hardware at a loss has become a staple practise of Nintendo of late. The handheld console, the 3DS, was also sold from launch at a loss, however this is no longer the case.
CEO and President of Nintendo, Satoru Iwata, said in a statement to the company’s investors today:
“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. 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.”
Yesterday’s shock profit announcement, that saw Nintendo announce a loss of $351 million in the first have of the financial year, should be too much of a concern for the company. Early sales predictions pit the Wii U at 5.5 million units sold, and add to that the prediction that software sales for the console will be around 24 million units all before March 13. Leading retailer GameStop announced last week that they had taken 250,000 Wii U pre-orders in the USA alone.