Wii U profitable with just one software sale
By
Eddie Makuch, News Editor
Nintendo of America pres. Reggie Fils-Aime reveals new system becomes "profit positive" once consumers purchase one game.
The Wii U itself will be sold at a loss, but the system becomes "profit positive" once a consumer purchases their first game. Nintendo of America president Reggie Fils-Aime revealed the information to Mercury News in a new interview published this week.
"As soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive," Fils-Aime said. "In the end, the business model is still to drive the install base of hardware, and then to drive a strong tie ration with all of the other software and experiences for the consumer. And if we're able to do that, then we will create significant profit for the company."
The Wii U launched in North America on Sunday at $300 for an 8GB basic model and $350 for a 32GB deluxe version. The system comes to Europe and Australia on November 30 and will launch in Japan on December 8.
The system launched without one of its more novel features: Nintendo TVii. Nintendo expects this video service to be available beginning sometime in December. In all, Nintendo director of product marketing Bill Trinen said there is "still a lot to do" with Wii U.
By
Eddie Makuch, News Editor
Eddie Makuch (Mack-ooh) is a News Editor at GameSpot. He works out of the company's Boston office in Somerville, Mass., and loves extra chunky peanut butter.
396 comments
I would really love to see Nintendo sell their machine at a significant loss for a couple years just so that it would have more impressive tech. It would show the rest of the developers that, "Hey, we made a sacrifice for you, so let's see some more and better gamers!" Honestly, POWER is what drives third-party support. Makes me wonder if the other companies are going to still be as excited when the other two systems drop.
Never bought a Wii, but I'll be buying this for the dual nature it has playing both Wii and Wii U games. I want to play Scribblenauts Unlimited and Smash Brothers: Brawl o_o
2 Like It sounds like they're trying to convince everyone that their console will be a success. Hell, they may even be trying to convince themselves more than anyone else, but if you ask me, when a company is confident in their own future success, they don't need to shout it out to the world or try to force it down everyone's throats.
All these snippets do in the end, is make it seem like Nintendo has no confidence in the Wii-U whatsoever and that they're actually very nervous about how it will perform from a commercial standpoint. Maybe it's because of public feedback or criticism. Maybe it's because they've realized that they don't have much more to offer than the current 7 year old consoles they're competing against do. Maybe its because investors and devs know its only a matter of time before Sony's and MS' next gen consoles launch and that this fact alone puts a lot of pressure on the Wii-U to do well now while it has a head start. Maybe it's an effort to garner more 3rd party support by trying to reassure Devs that the Wii-U won't disappear after a year or two of novelty support from fans.
Who knows?
Just like PS3 and Xbox... why people are still surprised by this? Of course it's more expensive to build and hardware than make a game, so the more games you sell, the more successful is your console. Selling a ton of consoles means nothing if you got a low game bought/console ratio... I think Nintendo just want to be on the news I guess.
When the PS3 first launched you would have to have bought 5 games for it to have been profitable for Sony!
I seriously doubt the Wii U is being sold at that much of a loss if any at all, and this article pretty much confirms that for me. The hardware to price makes me believe it's being sold at a profit.
3 Like Nintendo seems to be more concerned with hardware sales than software sales. The Wii sold plenty of units but most buyers stopped there and didn't bother with games beyond Wii Sports that was included with the system. I'm sure developers noticed this and didn't bother making anything truely remarkable for the Wii. Hopefully this time around things will be different.
@osxgp More-so than the Wii's HD hardware deficiency, software piracy and the scum that never buys any software killed Wii's possible 3rd party release future - resulting in a slew of terrible ports - and its much the same story for every disc based console ever released in the past 12years.
I wouldn't be so quick to blame software piracy for the Wii's demise. It definitely is the most hackable of all machines but even that didn't start catching on as an easy to do exploit until around 2008-ish. The PS3 at present is completely jailbroken and it still sees positive software sales. The PSX and PC also for years saw CDs burnt and swapped across the playground in schools and the harm was never really felt.
The Wii has failed as a "hardcore" games console because no one wanted to work with PS2 level tech. Nintendo never properly realised the concept of the Wiimote either until the introduction of the Wiimote Plus. They also flat-out refused to release titles like Project Zero 4 in western territories which wasn't doing their core audience any favours.
It is Nintendo's fault and Nintendo's fault alone as to why the Wii was a failure in that sense.
3 Like Yeah, they'll make a profit off the game due to how shoddy of technology they are building into the thing....USB2, Stylus style input for the touchscreen......yeah, I imagine they are hardly taken a loss at all from the system sales alone unlike with most console launches. Remember how much 360 was loosing per console when they first came out......technology costs many and requires sacrifice. I really wish Nintendo had sacrificed a little more this time round. Don't get me wrong, I still want one....I buy every console, and in some way I usually end up liking them all, but still....I don't think how little of a loss they are taken on each unit sold is a point worthy of bragging about to anyone other then Nintendo share holders.
@rene9ade520 Could have been worse, could have incorporated a super-slow HDD and a Blu-ray drive :P
6 Like If Wii U is porfitable with just one software sale then that would suggest to me at least, that Wii U is being sold at cost, not at a loss as Nintendo has suggested in the past.
@sl83r That's not necessarily true. They could be selling the console and losing $10-15 on it but making $20 on 1 game.
@BestJinjo Very true. Point taken. Either way though, they definatly are not losing the amount of money on the system, as they seem to be suggesting from their original statements, even though they never really put a $ figure to it.
8 Like I was just thinking, if HD games consoles are only now being sold at some kind of profit, then does that mean that HD gaming came along too soon? Has the games industry been trying to do too much too soon? What kind of sustainable business is "sell it at a loss"?
Also, if Nintendo had released a console with cutting edge hardware, would all of you have bought it? Because based on the comments I keep reading, many of you harbour a deep resentment for this company. So my gut tells me that, no, you wouldn't have. So Nintendo would have made very expensive, loss making consoles... that didn't sell. And you wonder why they chose this route? Well there is your answer.
@kavadias1981 And as for the second half of your comment, if the console did feature cutting edge technology, and truly was a next gen console that would not only rival the current gens, but that would also rival that of the upcoming consoles from Playstation and XBox, hell yes!!! I would definitely be more likely to buy it!!! In fact, I plan on buying one either way cause I'm a gamer and I love anything new coming into the gaming world, but a large part of me feels like I should wait in hopes Nintendo makes a new build to release later in the year fixing some of the features of the the current build.
3 Like @kavadias1981 No, its standard for company's to take a loss on a new technological products. The idea is that they develop new needs, and until the components can be manufactured in large quantities, the cost is higher. Once the product is established, and the sales demand is made, then production is kicked into overdrive and the technology is made cheaper due to sheer demand. ...if company's didn't make that sacrifice in order to progress technology, be'd probably still be living in the 50's. Just a necessary evil. The funny thing about this article, is that that means Nintendo is actually taking a smaller loss then normal which is actually probably due to the fact that a lot of the technology used for the WiiU is not even next gen, and is just barely current gen.... hens the smaller loss. ....its really not something to be bragged about.
@rene9ade520 Selling at a loss makes sense if you are sure of high sales. I think Nintendo are playing it safe, because based on their past experience, trying to go head to head in the power race has resulted in sales of their consoles dropping with each console generation.
3 Like @rene9ade520 Could they have released it with cutting edge tech anyway? Even Microsoft and Sony's consoles aren't ready yet. Could Nintendo have really released a console to rival them so much sooner? I wonder about that.
I am disappointed that the tech in actual console isn't at least a little better than the PS3/360 though. Sure it reads discs at twice the speed, sure it has 2GB RAM, but what does that matter if the CPU is slow; If all the games aren't 1080p 60fps as standard. Such a shame.
1 Like Things wii do right - they get their product out earlier than the competition and label it as next gen so people buy it (and they get it out before christmas, big boost for that)
Things they do wrong - skimp on hardware costs, only incur minimal losses on the console itself, provide barely any storage space, with the wii U they don't see to have advertised it at all (if i wasn't following gaming websites i'd not know it was out).
The HD size is really a killer for me, my console is more important to me as a media centre for the downstairs TV, so it needs to have a large HD to store music, videos and whatnot on it. 32GB wouldn't even scratch the surface, i have more storage on my mobile -.-
Well, I won't be buying one, Nintendo don't do enough to interest me as a consumer so i'll take my business elsewhere.
3 Like wii U was a big disappointment its definitely NOT worth $300 its more like a $199 type of thing...oh and by the way to all of you saying ohh the graphics are amazing lol you obviously havent played on it yet cause my 360 and Ps3 look exactly the same washed out OLD tech... sad day for Nintendo when NEXT GEN ACTUALLY does come out...
1 Like If my math is correct they're selling cheap Hardware & calling it Next-Gen so the production cost is lower then other consoles which I guess causes them to break even. Then they sell a game slightly overpriced to make the console & game purchase a "Positive" transaction. But my math could be wrong.
1 Like @Ripper_TV Can you please tell me what any company and I mean any company calls the people who buy their product??? Oh yeah that is right they call them consumers.....what do you want them to call them? Here is the definition of consumer.....
con·sum·er? ?[kuhn-soo-mer] Show IPA noun.
1. a person or thing that consumes.
2. Economics . a person or organization that uses a commodity or service.
I am pretty sure that they are using it as the 2nd one considering they are part of a Economics business model. Just in case you do not know what Economics is, I will include the definition to that word as well....
ec·o·nom·ics? ?[ek-uh-nom-iks, ee-kuh-] Show IPA noun
1. ( used with a singular verb ) the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind.
So quit being disgusted and either enjoy what they offer or even better yet don't they more then likely would not want to disgust you any more then they already have....
@Killer6b9 @Ripper_TV Lol funny because the guy thats been liking your comments (abHS4L88) seems to sugar coat things all the time, along with all of the Nintendo fanboys, saying things like "Nintendo has heart" when in reality they are probably the greediest of the gaming companies
@dreamfist11 @Killer6b9 Indeed, I always get the impression (from their price policy and statements) that they're in fact THE greediest!
1 Like This is how it is with most places. It kinda sucks for some retailers honestly. Radio Shack needs to sell something with their TV's or else they dont make a profit at all, only a loss.
Kinda a crappy system if you ask me. On nintendo's end though, they offered to sell at a loss to meet gamers demands, and that makes me happy to know who they put first. God knows the new xbox will cost $500+ and won't even have anything good on it at first.
6 Like Every console has taken a loss. Often times a huge loss. The new Xbox is expected to cost $300-400, and I'm sure the PS4 will be along the same line, and they'll both probably be taking a few hundred dollars loss per unit. The Wii U is the first time a console is able to make a profit this soon after a sale (by a massive margin). Just one single game puts them into profit? That's kind of crazy.
So yeah, that's definitely good business that they're managing, but who is exactly putting their customers first? Microsoft and Sony who are taking a much greater substantial loss on their consoles by putting out better hardware and greatly underselling it's value? Or Nintendo who is putting out lesser hardware and charging more for it so they can make a profit sooner?
@Ripper_TV @Darth_Tyrranus nope. The 3DS was the first console from Nintendo to be sold at a loss.
@Darth_Tyrranus Yeah, their philosophy with the Wii only. All their other consoles were sold at a loss.
2 Like There is nothing like it at the moment? Meet Vita PS3 crossplay. Oh and it actually lets you play on the PS3 and then continue gaming while you're on the can.
@Ghetto_ninja The PS3/Vita cross play is pretty much a dead move by Sony now that the PS3 is at the end of it's life cycle as far as the launch of the PS4 around the corner. Now I honestly believe that is they use the Vita alongside the PS4 it will make a much larger impact. They should have done this within a year of the PS3 launch and I think that they would have been a much larger contender the generation. Only time will tell and regardless I will own them all, well except M$ if they do not make the online multiplayer free this next generation. I think that Sony's plus is a much better way to be able to charge people for some online functions, such as discounted dlc, games, as well as free games and the such. I can only hope that Nintendo follows this online model and that they can offer more. For M$ to make sure you are a gold member to use other paid services like Netflix and Hulu is straight BS period, those services already cost the consumer and should be usable without a "Gold" membership. I had sold my 360 because of the way they are running their business model and will not go back until they correct it.
@Killer6b9 @Ghetto_ninja I don't like paying for live either, but I would gladly pay a one time fee each year to have a streamlined online experience. I own most every console, current as well as dating back to the original Nintendo (and growing) and I plan to buy all the next gens as well...but definitely the new XBox as well! In fact, its my most anticipated console, as the PS3 still seems more dated to me then the 360 even after coming out a year after the 360's release and the Wii....well, even more so. ...doesn't look like that's gonna change for Nintendo this time around either.
@Killer6b9 @Ghetto_ninja ps3 is at " end of life"? Yeah right.. Like the ps2 was when the ps3 just came out huh? (and that's not even considering "ps4" is not even out yet and won't be for quite some time). Still funny to have to read stupid comments like that...
@walterg74 You are missing my point completely. When the PS4 comes out the majority will be moving on to that system, while leaving the PS3 behind. The comment I was answering to had to do with the Vita and PS3 compatibility....it is simple it should have been done 4 years ago. I have 2 PS3's and I really really wanted the move to amaze me. Yet it is nothing but a disappointment, and every last person I know that has one thinks the same thing. The PS3 is nearing its "life cycle" did not mean that Sony is going to just abandon it like M$ did to the first Xbox, but rather that the games will slow down and more focus will be on the PS4 just like it did when the PS3 came out the games slowly started to decrease for the PS2. I will say there will be games out for the PS3 for a couple years after the PS4 comes out but simply put most people will be buying the same game on their new PS4 unless they don't have the money to buy one at that time. Which once again leads me to the other part of my comment, I stated that if they continue the Vita/Playstation support with the PS4 it will have a much larger impact since it will have years of life due to the fact it will have just launched. Apparently you read what you wanted to in my post and assumed whatever you wanted and remarked with a stupid comment yourself. Like I said I have 2 PS3's and love them I almost have had every last system made since colecovision, two that I know of that I did not get was the Jaguar and the Neo Geo...big loss there. I WANT Sony to make the Vita/Playstation combo a success but they should have done it a long time ago, and they need to do it with the PS4 as well. Look at it this way there is 15 cross play games when there could have been hundreds....that is the point...I want to buy a Vita I just need to know that it wont be a waste of money like the PS GO was then pretty much left to die....I could go buy one today...just prove to me I wont waste my money I have to be GUARENTEED that it will cross play with my PS4 cause when that launches I will be in line.....and not to pick of a Vita 2 to go with it....
And that's one of the only things it can emulate from the Wii U, the Wii U is capable of far more than that and will have far more games utilizing it than the Vita/PS3 cross play/control because developers will merely think of it as an option, not a key feature.
Target in Longview,TX had some earlier,Wal-Mart in Mineola,TX has several in stock and I was at that store about an hour ago.
1 Like I have seen many in stock including today.You would think after Black Friday these would all be sold out.I do not think they are selling well at all and I think the Big Culprit is the name.Unless your a gamer and keep up with the news you would not know this is an entirely new system Nintendo you have failed advertising this system and it will bite you in the ass. I mean when you casually look at it other than the tablet controller it looks like a regular Wii.This system should have had a completely different name and look than the old Wii!!!!
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