Wii U will be sold at a loss

Ahead of the console’s launch next month and December, Nintendo boss Satoru Iawata has confirmed that the Wii U will be sold below manufacturing costs, and introduced at a “reasonable” price.

Although both Microsoft and Sony have previously launched new consoles as loss leaders, Nintendo has generally avoided this by keeping production costs low and selling consoles at a profit from day one. In response to poor 3DS sales, however, Nintendo dropped the price on the handheld several months after launch and started turning a profit only in July this year, over a year later. It was a hard lesson learned, apparently.

“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,” Iwata said in an official statement.

“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.”

Nintendo expects to sell 5.5 million Wii U consoles and 24 million Wii U titles by March next year, though, so… yay, optimism? They’ve already got one guaranteed sale, at least. Five million, four hundred thousand, four hundred and ninety-nine to go.