The Wii U Is To Be Sold At A Loss
Despite rumours of it being profitable at launch, the Nintendo Wii U is to be sold at a loss according to the Japanese gaming giant.
Nintendo’s Satoru Iwata confirmed the news during Nintendo’s last financial meeting where it was revealed that the 3DS sales are lower than expected despite wiping the floor with every other gaming handheld on the market. ”The Wii U hardware will have a negative impact on Nintendo’s profits early after the launch,” said Iwata, ”because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable.”
In a report by the Washington Post, managing director of Nintendo Yoshihiro Mori added confirmation to that news.
Unlike Sony and Microsoft, Nintendo’s always been pretty good at selling it’s products at a profit from launch. The 3DS price-cut last summer however, did boost sales at the cost of having the 3DS remain non-profitable last summer. This did lead to Nintendo reporting their first every yearly loss. Rival manufacturer Sony has only just started playing catch up with the PlayStation 3 which launched 5 years ago.
Nintendo had in the past said that the Wii U would be profitable from the beginning of the consoles launch next month. “As a philosophy, we believe in making money on our hardware, even if it’s small amounts of money at the start” said Nintendo of America president Reggie Fils-Aime in an interview with Games Industry. “We don ”We don’t believe in losing a lot of money on hardware. I brought up 3DS – after the price cut, we were losing money on 3DS hardware and that’s what led to our posting our first operating loss ever as a public company.”
Iwata explained that Nintendo’s bank balance this year most likely won’t be seeing “Nintendo-like”profits. “Although we expect our financial performance to be revitalised, under these circumstances, unfortunately we cannot say that we will achieve ‘Nintendo-like’ profits within this fiscal year,”. As for shipped units, Nintendo expects a number of 5.5 million Wii U units shipped with a further 24 million games for the Wii U by March 2013. Despite Nintendo’s financial report filed yesterday said that these totals were sales expectation and not shipped, Iwata still referred to the figures as “shipped”.
It’s still too early to say what will happen with the Wii U, but it’s future may not be so glum, Gamestop has reportedly sold out of it’s Wii U pre-order shipment and has a further 250,000 on a waiting list to pre-order the console.
George Sinclair is an editor for Analog Addiction, the home of the latest news, reviews and previews. You can follow George on Twitter and his blog on IGN. Don’t forget to follow the OFFICIAL Analog Addiction Twitter!