Nintendo’s Wii U Console Will Be Sold At A Loss

By Ishaan . October 24, 2012 . 10:40pm

Nintendo president, Satoru Iwata, confirmed at a financial results briefing today, that the company’s upcoming Wii U console will be sold at a loss at launch.

 

“In addition to the yen’s continuous appreciation, the Wii U hardware will have a negative impact on Nintendo’s profits early after [its] launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable,” Iwata said to investors.

 

He then confirmed: “In this first half of the [fiscal] 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 [manufacturing] cost.”

 

The Wii U will come in two bundles—Basic and Premium—in the U.S., Japan and Europe when it launches. Pricing for all three territories is as follows:

Basic: US$299.99 | 26,260 yen | €299.99

Premium: US$349.99 | 31,500 yen | €349.99

 

Nintendo hope to sell 5.5 million Wii U consoles by March 31st, 2013, and Iwata says that pre-orders of the Premium bundle are doing particularly well.

 

The Wii U console being sold at a loss will be a similar situation to that of the Nintendo 3DS, which, too, was sold at a loss until recently, following its price cut late last year. Due to this, Nintendo will not be able to achieve “Nintendo-like” profits within this financial year, Iwata says.

 

However, he adds, Nintendo will aim to return to high profit margins next year by launching Wii U successfully and continually adapting their business in line with the times.


Read more stories about & on Siliconera.

  • drproton

    It makes sense. Those controllers are probably very expensive to produce, even if the component cost is not very high.

    • http://altsune.com/ Ovada Bey

      A pokemon! *throws a dusk ball*

      • ShawnOtakuSomething

        Try throwing one at me~I Dare you

        • Mister_Nep

          OMG a Kratochu! *throws master ball*

          • http://www.facebook.com/profile.php?id=100001531081700 Vale LN SkreiHolme

            OMG SUPERDEFORMED MOEBLOB

            KILL IT WITH FIRE

        • SLick123456789111

           Lol

      • puchinri

        The face matches so well too. Actually, both your avatars’ expressions. . .

  • Suicunesol

    They’re probably going to mention this in the Nintendo Direct tonight.

    Pretty delicate situation. What would happen to Nintendo if its home console business failed?

    • http://www.siliconera.com/ Ishaan

      They’d probably have to lay off their hardware staff (*sniff*) but they’d make mint as a pure game development company.

      • Wake

        That’s a sad thought. Makes me think of Sega. Dreamcast 2…

        I’ll never stop believing.

        • http://www.siliconera.com/ Ishaan

          I doubt Nintendo at even their lowest would be anywhere near Sega. They’re too savvy a company to let themselves fall into ruin like that. 

          • Abend

            even titans can fall all it takes is one little mistake.

          • sd28

            like sony

          • http://www.facebook.com/profile.php?id=100001531081700 Vale LN SkreiHolme

            Yeah Sony’s new controllers are pineapples

        • XypherCode

          They take pride in their hardware. I don’t think they’ll let go of the hardware business anytime soon or maybe ever.

        • xxx128

          You know… SEGA had too much style to call it “dreamcast 2″ anyway. And i firmly believe that one day SEGA will make a glorious return with a new gaming machine. *Until then weeps into a pillow*

          • Wake

            Yeah. Plus, that Shenmue launch game is going to be perfect.

      • WizardoftheBlueOrder

        I think that ignores how Nintendo functions. Nintendo does so well with software because it’s all done on their own hardware. Having to jump through hoops of specifications of other companies would probably diminish their quality. (Or in other words: We couldn’t get it to work exactly as we liked.)

        So “make mint” I think is a bit of an exaggeration. They’d do okay, much like Sega is doing okay.

        Also, didn’t Iwata go on record stating that if their hardware fails, they’re just pulling out entirely and will try to find some other direction as a company to go in?

        • http://www.siliconera.com/ Ishaan

          Well, it would certainly bring a halt to their innovation on the hardware front. Things like StreetPass would be gone, controller innovation would be gone. I’d feel bad about the latter in particular because I think they did some wonderful things with the Wii Remote.

          But as a software developer, Nintendo are very, very savvy and market aware. I’m sure they’d make a killing no matter what hardware they develop on. When it comes to reading and understanding market data and trends, they’re the best in the industry.

          I’m sure Iwata will fight tooth-and-nail before he ever lets things reach such a point, but the industry is changing rapidly and crazier things have happened. I’d never want to see Nintendo driven out of the hardware business; I’m just saying that, even if they were, they would still be a kickass developer.

          • Mrgrgr and Unacceptable World

            This is only a dream of mine though, but if Sega is handled by Iwata, do you think they had chances of coming back to their golden era there?^_^

          • http://www.siliconera.com/ Ishaan

            Well, one of the advantages that Nintendo have as a developer is all the money they have saved up and their most valuable asset, which is their IP. That and profits from their hardware innovation affords them the ability to take certain risks that they wouldn’t be able to otherwise. Sega don’t have either of those advantages. Sonic is pretty much the only reliable franchise they have left.

      • Suicunesol

        I’m not sure Nintendo’s software departments/studios could continue operating the way they do now if their hardware went under. Correct me if I’m wrong, but Nintendo’s primary operating costs stem from its successful hardware sales. If those disappear, it would mean less money to develop games with. And considering they’re just entering the HD console market, it will cost even more money to make games. Which means Nintendo might take fewer risks when it comes to developing games, which means fewer new IP and more “safe” games like Mario.

        • http://www.siliconera.com/ Ishaan

          Well, a lot of Nintendo’s innovation has been on the portable games front, too, so all of that would very likely remain intact. But yeah, if their operating costs take a hit due to the lack of hardware revenue, console games would likely be considered more carefully.

        • Peeka Chu

          Well to be fair, its not like they have been cranking out new IPs by the boatload.  I can think of a few 3rd party, cooperative projects that they did last gen (Last Story, Xenosaga), but almost everything else was a Mario or previously known IP.

          • brian yep

            Last Story was this gen unless you consider Wii to be last gen.
            Xenosaga was a mostly Sony/Namco thing, but we did get Xenoblade and even then I think that was second party because Nintendo owns most of Monolith.

          • sd28

            they actually have quite a few new ips just that people conveniently ignore them and and only pay attention to mario zelda or pokemon. from what i have  seen any way.

            here is a list http://kyoto-report.wikidot.com/forum/t-469495

          • Peeka Chu

            Looking at that list and at the Wii, their last flagship home console, there’s 17 games listed there most of which are party/ lifestyle crap.  We got about two or so of those on Western shores too.  Even MS has a more diverse IP portfolio than that.  

          • sd28

            at peeka chu 

            you not like them doesn’t stop them from existing  which was the point i was making also i like how you ignored the new stuff on 3ds .

            and your comparing all of microsofts offerings to just nintendos new ips I think you need to realise they have more ips than just the new ones . 

          • Peeka Chu

            Pretty sure that hardly anyone liked them, were we to examine the sales.  I’m not sure how listing a bunch of obscure party games and shovelware builds the case for a manufacturer having strong support for new IPs.  Especially when 90% of those never made it onto a Global market (outside Japan).  I listed MS because they are notoriously harranged for having the least amount of 1st party exclusives on their system, but if you eliminate the trinity of Mario/ Zelda/ Pokemon, Nintendo clearly lags.  

            I ignored the 3DS stuff, because this article is about a HOME CONSOLE.  The Wii U.  Therefore we should compare it to Nintendo’s previous home console and the IP support it received, no?

            I’m not trying to argue, but that list you produced only substantiates my point.  

    • Herok♞

       Nothing Nintendo is easily the company where that will never happen because did you know that on a year basis Sony and Microsoft lose money from their gaming departments and Nintendo has enough money to survive until 2052 even if their stuff fails. link:http://www.gamesradar.com/nintendo-doomed-not-likely-just-take-look-how-much-money-its-got-bank/ The only console maker I can see dropping out of the race is Microsoft because they don’t innovate or have enough franchisees to justify purchase if you already own a ps3 and wii, nor do they have a handheld they can ride the sales if things get bad.

      • Suicunesol

         Never say never. If what you say is true, then regardless of how rich Nintendo, Sony, and Microsoft are, they’re still all losing money. No company wants to stay in a business that causes them to lose money. Nintendo might exist for a while to come, but that doesn’t mean they’ll keep making the trademark games we love until 2052.

        Microsoft is the least likely to drop out, I think. They’re a general software manufacturer and can very flexibly change their business strategy because they have such influence in the international market. Even if they don’t release another Xbox, they’re still selling PCs and will continue selling PCs for the rest of the century.

        They might release a powerful mobile gaming phone too. I don’t see Nintendo doing the same since that’s just not what they do. So I see Nintendo having lots and lots of trouble in their mobile games department.

        • Herok♞

          If Mircosoft stops making hardware then thats what I mean by dropping out, leaving the console race, I have no doubt that they will keep making pcs forever.

  • Xmas Lopez

    Well, nearly everything’s being sold at a loss recently so I’m not surprised

  • http://altsune.com/ Ovada Bey

    You know what else is sold at a loss? Porn. 

    They just give it away for free! 

    • puchinri

      Nooo. They do not give it away. It is usually uploaded freely by people who buy it or get a hold of it, but did not have any part in creating it and are making losses for the creators. ^u^;

      But yes, there is a lot of free porn. But, also because a lot of it is pirated. Interestingly enough. . . just like games. Hmmm.

      • http://www.siliconera.com/ Ishaan

        You seem very knowledgable on the subject, puchinri. :o

        • puchinri

          Ehehe. . . 0v0

          I, uh, tend to try to be well-informed on topics of interest to myself. >u>;; 

          • Göran Isacson

            But of course, no need to be ashamed of that! It is the responsibility of every citizen in this day and age of information to keep themselves informed of a great width and breadth of subjects, if only for their own sake. Sure, it’s hard and tiring work to penetrate the fog of ignorance and apathy that the modern world constantly soaks you in with all its complexity and high demands, but if you don’t take responsibility to educate yourself, to stimulate your mind to new heights and plumb the depths of data that exists, then who will?

            Sure, maybe not EVERY bit of information will blow your mind, and maybe you’ll jump a gun every now and then, you know, leap before looking and figuring out how things really work… but it is my belief that only through experience can you develop the lasting ability required to get ahead in todays world. You need both stamina and technique in order to truly become a well-educated denizen of the information age, and the best way to learn those is to keep ones eyes open and take in every opportunity to learn new things. So no need to be ashamed for keeping yourself well-informed puchinri, because after all- you are just doing your civic duty and should feel proud of yourself!

            Feel proud… all night long.

            And the day after that, because pride in ones self should stand up for itself longer than just a single night.

          • puchinri

             . . .Well put. You deserve a clap for that. Hehehe. Thank you, very much, Göran Isacson. I will never be ashamed of my love forinterest in pornography again. (I’m kind of unabashedly open about it anyway, but if someone ever tried to shame me, wouldn’t work now.)

          • Göran Isacson

            No need to thank me, just doing my job.

            Which is apparently to figure out a way to make posts as full of innuendos as it gets without crossing into borderline sexual harrassment.

            What can I say, it’s a living.

          • puchinri

             It was so eloquent, it never came off as sexual harassment. I quite appreciated how strong the innuendo was without being at all crass. A lot of writers could learn from you~.

          • Göran Isacson

            Aww, now you’re making ME blush. Personally felt that it sometimes got a bit too far-fetched to be funny, but hey: that’s what feedback and improvements are for!

  • http://twitter.com/ruby_parfait Charlotte M

    So wait, $300 for the US, but the equivalent of $390 for Europe? Well it seems the European market is making up a considerable amount of the ‘loss’ then…
    When will companies realise that dollars and euros are not the same value?

    • http://burnpsy.wordpress.com/ burnpsy

      They let retailers set the prices, so I’d blame Europe itself for high European prices.

    • DiosFancifulRomp

      Multiple language support isn’t free, nor is shipping what I imagine would be fewer units. Consider that the Wii U will probably sell harder in NA than EU. Also consider that their marketing departments KNOW the regions, so they KNOW what’s a good price point. Lastly, who says that the manufacturing costs are lower than $390 USD? No one.

  • kupomogli

    There’s a first time for everything huh?  

  • XypherCode

    I even thought that 300 bucks was ok and putting a 250 price tag on the Wii U was a loss. So $300 is already a loss for them. I hope they do well next year. :)

  • http://www.facebook.com/Everwanderer Zehari Kiel

    I’m sure they won’t be selling at a lost here in mexico,with the premium bundle being near $600 USD. And no, conversion rates don’t justify it being sold at double the price in NA.

    Hell, the mexican price is even more outrageous than Japan!

    • http://profile.yahoo.com/IPAHDFC3ZSTQTJX5S55O6FEDDE John

      get your homies to steal one for you

  • http://profiles.yahoo.com/u/HAEBCODVH3BGFIHE47BKNDXD2I Jonathan

    when is a new console ever sold at anything but a loss for the first year or two?

    • DiosFancifulRomp

      I’m pretty sure Nintendo hasn’t sold a console at a loss until the 3DS. Someone can correct me if I’m wrong, but I do know the Wii was sold for a profit.

    • http://twitter.com/ChestnutBowl Chestnut Bowl

      Both the Gamecube and Wii sold at profit at launch.

  • Elvick

    I hope it tanks, because Nintendo as of late is too cocky and needs to be taken down a peg.

    • Domii

      Wut!??

    • sd28

      its sad that people want others to lose there job because there not happy with the company they work for

      • Elvick

        I don’t want people to lose their jobs. Where did I say that?

        Oh right, I didn’t. It’s sad that people put words into another’s mouth.

        Although, I wouldn’t mind Reggie being replaced with someone else.

    • puchinri

      Wow. That’s a lovely mentality. 0u0;

    • SLick123456789111

      I dunno.

    • http://profile.yahoo.com/IPAHDFC3ZSTQTJX5S55O6FEDDE John

      whats wrong with making money?

    • Mrgrgr and Unacceptable World

      Wuttt???

    • http://profile.yahoo.com/5UFEVTPDTXD33NSMUFMX4TEAMQ Mike

      ??????

      how are they “too cocky”?

      I don’t think selling at a loss means your “too cocky”.

      seriously whats your reasoning behind this?

  • ShawnOtakuSomething

    Just like Regigigas, Nintendo is going to have a slow start  therefore  it must  wait five turns instill  it can Profit on the Wii-u. *Wow That didn’t come out the way I wanted it to.*

  • kira_aotsuki13

    I’m really hoping this does well, the fact that Nintendo is trying to make the price “reasonable” is a nice shout out for fans. I mean remember when the Playstation 3 came out? that sucker was over 600-700 dollars. Imagine what Sony is gonna charge us for the PS4

    • Domii

      I don’t think Sony can be that stupid to make the same mistake twice. Although you never know, crazier things have happened.

    • http://twitter.com/ChestnutBowl Chestnut Bowl

      The difference is that the initial PS3 was backed with new and expensive tech and Sony tries to implement hardware solutions to media. It played Blu-rays, CDs for music, Super-Audio CDs for music, Playstation 2 games, DVD movies, and so on.

    • Tianyu Wei

       Btw, even at 600-700, SONY was ALSO selling for a lost. Standalone Blu-Ray players at that time cost 400 for entry level models.

    • Fango

      lol ignorant nintendo fanboys.

      You’re comparing the WiiU, which is quite late into the generation, to the PS3′s release 6 years ago when the technology was still new.

      • SLick123456789111

        A Sony defender who admits the Wii U’s tech is on par / stronger than the PS3 ?
        This is to good to be true.
        (Because lets not forget the tech/features that Wii U has that the PS3 doesn’t.)Ex:MiiVerse.)

        • Unlimax

          No he’s Right and he should defend himself from these kind of Unconscious Nonsense !
          Its just stupid how you compare Those two completely different things in launch Price or quality or even Specifications when the current generation consoles is about to receive the next gen consoles , you have to admit it Whether you a Nintendo fan or not .. every company has a policy !

          Also .. Why Nintendo fans Hate’s Sony so much ?

          • SLick123456789111

            Unlimax:” Why Nintendo fans Hate’s Sony so much ?”.
            -Welp :O
            I play on whatever system is fit for me. I support good business decisions (Ex:Platinum Games & Namco Bandai) & da*m bad ones , no matter which company is performing them. (Ex:Capcom & EA.)

            Second , Nintendo fans don’t hate Sony , it’s laughably the other way around. Why would Nintendo fans pick fights with Sony fans ? What makes Nintendo fans so salty as to go out of their way to bash Sony ? What does Sony honestly offer in terms of gaming that Nintendo fans “need” ? Nothing. And of course I’m speaking about pure Nintendo fans , most of us own both a PS3 & Wii , but still  , the fact remains that there is not a gaming feature that would provoke a pure Nintendo fan to be salty about not having a PS3. (Hi-End graphics does not count as a legitimate excuse to purchase a PS3 , because graphics are irrelevant to the overall experience.)

            Third , I’d imagine Nintendo fans go hard in debates against Sony fans because Sony fans feel that they (& their company) are in the same league as Nintendo & poke those Nintendo fans. Like Sony & it’s fans has the same prestige & legacy as Nintendo & it’s fans. Got news for them , Nintendo has been doing this years before Sony had the inkling of a thought to create a Playstation. Nintendo has made a legacy out of it’s IP’s that no other gaming company in the world can touch to this day. So there is absolutely no question as to who leads this industry , who offers more quality & who has more experience. We could even go as far as to say , their those who mainly built this industry up to a mainstream point early on. (With a little competition from Namco , Square Enix & Sega.)

            Unilmax:”Its just stupid how you compare Those two completely different things in
            launch Price or quality or even Specifications when the current
            generation consoles is about to receive the next gen consoles”.
            -It’s not about hi-end tech , it’s about where we should be taking & keeping the industry & that’s something that Nintendo understands & Sony & Microsoft don’t. Which is another fact that Sony & Microsoft blow jobbers will never admit.
            But lets say it “IS” about tech.
            Then you & Bob Fango would be right.
            Do you think Sony & Microsoft would be selling more hardware just because of it ? Lets say PS4 releases for more than $500 (Which it will) & XBox8(Unlimited) sells for $450-$550. Do you think that makes the system better  ?  Because it has more entertainment features than gaming features ? Because it has better graphics ? (Lol)
            Not to mention , what idiot would pay over $500 for a videogame system in this economy ? Who would be willing to throw that stack down at the counter ? We already saw how that turned out the first time for Sony…
            But come on now … I shouldn’t even have to bring up the graphics point.
            Sony & Microsoft aren’t concerned with “quality”(key word) gaming. If they were , then they wouldn’t be trying to narrowly “copy” Nintendo. Sony would be playing to their strengths & Microsoft would be creating more 1st party titles. (& fixing their systems lol.)
            Microsoft , off that fact alone , does not care about their own software backing their hardware , a basic business moral in this industry.
            I just killed that argument for Microsoft. The argument that they are even putting forth effort to compete long term Generations with Nintendo.

            And your right , every company does have a policy. But that doesn’t make it a good one or bad one. It depends on how you look at it & what the company its trying to accomplish with it in place.

            Lastly , Nintendo fans don’t hate Sony , they have no reason too. They have quality , more & are happy with how Nintendo treats them. There is nothing Sony has that makes Nintendo fans legitimately salty. Nintendo isn’t overrated , their just 90% of the day on their A-Game & know what this business is about.
            And we respect them for it.

          • Unlimax

            Good speech ~ Claps to you ^_^ !

            . . . ಠ_ಠ

          • SLick123456789111

            /❤

          • Syn

            Am sorry, but do you work for both microsoft and sony to know that they ” aren’t concerned with “quality”(key word) gaming”, also, your so called “copying gimmicks” is something game companies do all the time, one makes one thing, someone come along and makes it better(or tries to anyway). All 3 companies have given us quality gaming through the generations without regard to what you say, each system has produced quality games that cater to different types of gamers(some more popular than others but quality nonetheless), so your statement of how sony and microsoft dont care is pure fanboyism. Ninty hit the jackpot this gen, the same way Sony’s ps2 was king in its gen, but that doesn’t mean the next gen will be ruled by either, no one knows. Also, your argument about how its “not about the tech” is kinda silly, gaming has always moved with tech, even the Wii pioneered motion control(which is progressive tech cos no system had done it so well before), if other companies want to give gamers the future of gaming now, let them, but dont bash progress and taking risks, if the world thought like you we would still have 16 bit graphics and keyboard controls with “amazing gameplay”. If you are a fan of Ninty, good for you, but dont shamelessly bash other platforms for trying to bring a different gaming experience(not everyone wants the same thing you know), as well as push the boundaries of tech to give a more immersive experience.

            Also, I see you keep saying the Sony gamble failed, doesnt look that way seeing as the Ps3 is still selling and both it and 360 sales are almost on par(meaning their gamble to give us an amazing system with tech ahead of their time worked).

            I think the Wii U will be great, cant wait to see what types of experiences we will get with the new control setup as well as games catered for it, but am also looking forward to what the graphic(and/or Physics) heavy next gen systems from Sony and Microsoft will bring to the table, because having more than one option is ALWAYS a good thing.

          • SLick123456789111

            ❤Holy Cow/❤
            Putting words in other peoples mouths results in some epic proportions. Even more epic than Gurren Lagnn http://www.youtube.com/watch?v=I6CVov-PMRc&feature=my_liked_videos&list=LLOuAa5Je95BuJ4kYfMj2bJQ. Same as painting a picture of them & their beliefs. More baseless than the Milky Way. Like I never would have thought of myself as a fanboy considering my open minded train of thought. Interesting though ❤ You did a pretty creative job tbh :D
            If I gave you a bit more to chew on , we could have sold a little 10-page booklet at Barnes & Noble. My character sounds original & intriguing.
            I❤Reading posts like these because I get to see how I’m “personally” interpreted by others. How my senseful responses are broken down through another individuals thought process.
            It’s almost like , I wish I had you back in school girl , when I was taking english classes years ago.
            Lol , but nah , I hope you enjoy your XBox8′s & PS4. Really. It’s YOUR money.
            Your decision if you want to throw down like that based off the opinions you stated.
            If you want to inform yourself more on your comparisons or the history of the companies , look up more on Sony , Microsoft & Nintendo. If not , you are always free to re-read my post :D
            It’s always there for you to digest differently. Of course , to your own liking❤

  • MrRobbyM

    I expected as much given all the console’s capabilities. Still, I’m sure they’ll make it up with software sales. Both the 3DS and Wii U have plenty of great games to look forward too in the coming months.

  • SirRichard

    Good to see that Sony’s disastrous start to the generation still haunts the big players today, I suppose, because at least selling at a loss is still selling the hardware. With Nintendo’s current brand power and the combo of Mario and Nintendoland, I’ve no doubt those losses won’t smart as much as they let on.

    • $1484028

      the problem is “the combo of Mario and Nintendoland” worked for the wrong business model (than what Nintendo is using for the Wii U), and “Nintendo’s current brand power” has had no effect on the business model Nintendo is now pursuing.

      the strength of Nintendo’s first party titles worked before because Nintendo made money on console sales.  
      hot games drive console sales, yes.
      and nintendo makes hot games.
      but ignoring the profits from the games themselves, simply speaking for the console side, console sales boosted by 1st party titles are only advantageous financially because Nintendo made money from the actual console sales.

      with the Wii U however, Nintnedo is copying MS and Sony’s model.  each unit is sold at a loss.  in other words, it doesn’t matter how many consoles they sell, THEY LOSE MONEY FROM IT.  the more they sell, THE MORE MONEY THEY ACTUALLY LOSE.
      MS and Sony make up this loss from game licensing fees.

      here’s the kicker, you don’t get game licensing fees from first party titles (well i suppose you could but you’d just be paying yourself).
      game licensing fees only come from 3rd party developers.  that’s why securing 3rd parties in so important for MS and Sony.

      Meanwhile, 3rd party support hasn’t been Nintendo’s strong point since the N64. and Nintendo’s current brand power wasn’t able to maintain any for the Wii either.

      so there you have it.
      Nintendo’s using a business model that will essentially devalue (in terms of console profits.  not sales, profits) 1st party titles and require them to really step up their 3rd party support, something they’ve had a dearth of for for 2 generations now.

      we’ll see if they can do it.
      and before the retorts =
      1) the 3DS is a poor analogy, because handhelds in the one area where Nintendo’s never had problems maintaining 3rd party support.  while the GBA, DS, 3DS all had great support, that didn’t help the GC or Wii maintain their’s
      2) this early groundswell of Wii U support also doesn’t say much because every generation Nintendo’s consoles see an uptick of developers singing their praises and jumping on the bandwagon.  
      and in the last 2 generations, they had all pretty much jumped off again (even the Wii’s greatest early 3rd party champion, Ubisoft, who is now singing the Wii U’s praises, ended up abandoning the Wii)

      to be clear, i’m not saying the Wii U is doomed.
      but what i am pointing out is do understand the way they did business with the Wii, GC, etc (relying heavily on the strength of their 1st party titles) won’t work if they’re going to copy MS/Sony’s model.

      • SirRichard

        Thing is, you don’t account for console manufacturing costs coming down, as they tend to do. Even Sony haven’t been losing on every PS3 for a while now and I imagine the new model helps that considerably. We’re not even sure how much they’re losing on every Wii U sold, if trends with their own games continue they could easily make up for what they lose on each console more and more until the consoles themselves turn a profit.

        On top of that, selling more consoles establishes a base for them to sell stuff to. That and their actual attempts at getting third-party support this time around will help take the sting out of their losses if they do it right, and I’d daresay going by preorders that their current brand power very much does have an effect on how things will play out. You’re talking like it’s entirely impossible for them to turn this around, when they’ve turned around much worse situations before.

        And they’re not really copying Microsoft or Sony’s models, because if they were we’d be seeing a much greater focus on a paid online service and a mountain of peripherals and extra hardware needed to get the most of the console, or a much greater focus on the strength of the hardware and all of its many multimedia features as selling points (there’s a reason the PS3′s nickname for some is the “black box of Bluray”). Simply selling at a loss is not copying the business models of their competitors wholesale, because beyond that common point Microsoft and Sony actually have rather different business models.

        Selling at a loss does not completely negate Nintendo’s strengths either, and over time it is entirely possible for them to turn around the current problems. Sure, a heap of early third-party support doesn’t tell much, but you’re mad if you think Nintendo won’t try to keep that going and that other publishers won’t try to break into the market somehow. Even Ubisoft never truly abandoned the Wii, not while Just Dance and Rabbids kept on selling, and I doubt that’ll change now.

    • puchinri

      I think that’s slightly relevant, but at the same time, I really just think that’s how Ninty works and what their mentality is already.

      But, yeah. I think the point still is “Nintendo-like” profits versus just profits. I know the loss really smarts because of the yen, but they’re still making a lot of money, and I’m positive they’ll make the Nintendo-like profits at some point too.

      Either way, I just want to see them succeed.

  • Göran Isacson

    So the 3DS was sold at a loss… UNTIL the price dump?

    Can someone who speaks economy decipher this for me? I get that they sold MORE of them, but wouldn’t the 3DSes still cost as much to develop as they did when they were first priced?

    • http://www.siliconera.com/ Ishaan

      3DS was sold at a loss following the price cut until very recently. In recent months, cutting down on manufacturing costs as well as the 3DS XL have made the 3DS profitable once more, like it was before the price cut took place.

      • Göran Isacson

        Aaah, that makes sense. It must have been some manufacturing cost cut in order to make the large price-cut actually be profitable… is there any information on WHAT said manufacturing cost was all about? Someone developed a new, cheaper method to build them? Component prices got lowered, something like that?

        Also, when you say that the 3DS XL helped, what do you mean by that? Their price points are different, so I get that they may earn more money by selling those, but how does that help the already existing 3DS-models to be profitable?

        • SirRichard

          I think he means that the 3DS XL itself helps 3DS profitability overall, because as you might remember a lot of people would say “I’ll wait for the revision next year” around the 3DS’ launch (and they turned out to be right). It was sold at a profit from day one and thus got more people on board with the system. He’s speaking about the platform as opposed to the models, to be short.

        • http://www.siliconera.com/ Ishaan

          It’s a bit of everything. Like @SirRichard:disqus said, the introduction of the new model with the larger screen rejuvenated sales to an extent. There’s also the matter of the price being higher, like you said, and the fact that the base manufacturing cost for Nintendo couldn’t have been that much higher from the regular 3DS.

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