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

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.