Nintendo confirms new system will be sold below manufacturing costs at launch out of desire to sell console at a "reasonable" price.
The Wii U will be sold at a loss at launch. Presentation slides from Nintendo's latest financial report were made available today, with president Satoru Iwata saying the company's ambition to sell the system at a "reasonable" price trumped its desire to sell the console in line with manufacturing costs.
It is not clear how much of a loss Nintendo stands to take by selling the Wii U below cost or when profitability on the console is expected to be achieved.
The Wii U will hit retail in North America on November 18 beginning at $300 for a basic model and scaling to $350 for a deluxe version. Nintendo had previously promised a reasonable price for the Wii U, saying it would not make the same mistake with the 3DS, which launched at $250 before Nintendo slashed the portable's price by about 40 percent to $170.
Yesterday, Nintendo reported its fiscal half-year earnings for the period ended September 30. The company posted revenue of ¥201 billion ($2.5 billion) down 6.8 percent from the 215.7 billion ($2.7 billion) it took in during this time last year. Losses came in at ¥28 billion ($351 million), compared to losses of ¥70.3 ($881 million) this time last year.
Translation from Iwata: "Yeah, we saw what happened to Sony six years ago when they tried to sell the PlayStation 3 at a 'premium' price -- not to mention our own 3DS debacle -- so um, we won't be trying anything stupid this time around."
aaww F*#$ man! Now they gonna DLC the HEEELLL out every game they sell... nintendnoooooooooooooooooooooooooooooooooooooooooo!!!!!!!!!!!!!!!
See, I wasn't lying to you guys at the destructive price tag that'll be PS4 and 720.
Even if $80 dollars included the gamepad tech alone, the other consoles can't make up $80 dollars to create much of a difference in graphics.
But again, i'll be ignored, and again, i'll be correct.
LMAO, must suck to be poor
@Lordcrabfood To be honest...
The only manufacturer that probably has a clean chance is Microsoft. Without them, neither Nvidia, Intel, or AMD would be valuable aside from Androids.
They are probably the only ones who can make an affordable, yet powerful machine.
People do not be fooled. These guys are businessmen there not stupid, they'll make those losses back easy through licensing and game sales. Then begin to make a killing
@not_wanted This is an add-on for the wii right? Pretty expensive if you ask me.
Whatever will make you feel better at the soon to be satanist price tag of PS4 / 720, by all means go ahead ^^.
Damn does Eddie Makuch make EVERY news article in Gamespot now a days?
Anyway 300-350$ is a good price.
£249.99 is a reasonable price? And they're making a loss?! What's in there, a mini nuclear reactor? :o
I find it amusing console companies feel the need to say this every time their new console comes out. Its not as if someone who thought the price tag was too high to begin with will read this and suddenly go: "Oh, well in that case..." Even for those on the fence, this isn't a very persuasive argument for buying a console.
@McDog3 Keep in mind that this info was released as part of a presentation on their finances, not a public event aimed at consumers. Investors and shareholders want to know this sort of thing. Obviously they know it will get to the public, but that's not the only purpose. Also, while other companies may say this at every launch, Nintendo doesn't, mainly because this is the first time that it's been true (I think). Their business strategy has always been to make profit on hardware, so this is different for them.
@McDog3 It's an important point to make for goodwill-building purposes. You're right in that if $300 is too high for a given person, it's too high, period. But for someone who finds $300 doable, they still may or may not find the system to be "worth" $300 for them personally. This extra bit of information serves to say that yes, it's objectively worth the price, and therefore more likely to be personally worth the price.Mind you, I'm not naive enough to take Ninty's word on this: I, along with many, will be waiting for the neutral cost-analysis that comes after the console is released and deconstructed.
Is anyone even excited for this console launch? I plan on getting one, but I'm going to wait until Zelda, Mario Galaxy, or Smash Brothers comes out (whichever is first). Nintendo really needed to get some hype going for the console. Maybe they did, and I wasn't paying attention, but it doesn't feel like they have to me.
@McGregor I'm very excited for it, even though I don't have the money to get one. I really want to play The Wonderful 101, and ZombiU is the first horror/zombie game I've ever been interested in. Some of the games from Nintendoland look interesting, and I want to try them.
Not really, but that's just me, I've not even looked at nintendo as a serious competitor in the gaming industry since the N64 and the glory days of games like golden eye and ocarina of time. Their game system endeavors since that time never appealed to me, the game cube, the wii, all pale in comparison to the competition.
@Jedi4ce28 I still hold the SNES as the best console of all time. While the PSX has a special place (for Final Fantasy VII), it still wasn't as good as the SNES in my opinion. They need to remake a Zelda game like 'A Link to the Past' for the new console, but use all the new updated 3d effects they have now. I know that 3d is the new "awesome" but for some reason I still go back and play that version of zelda on the SNES. it was a quality game. They did a throw back for Mario, why not for Zelda?
@McGregor @Jedi4ce28 I know what ya mean. SNES is my favorite as well. I really like the 2D styles and it had a massive amount of great games. Super Metroid, Link to the Past, FF6 [my personal favorite FF], Secret of Mana, Harvest Moon, Chrono Trigger, Mario RPG, Super Punch-Out,... & the list goes on.
Not even bothered with a hand held system since the gameboy. This is just ridiculous, they cost as much as the consoles do. The idea behind hand held game systems was for them to be supplementary sources of entertainment when you are away from your console, but at these prices... Couple that with the fact that these types of systems rarely see truly solid titles. Always felt like a waste to me, play a game on your phone if you're bored and away from the house, a decent smart phone will probably be cheaper still than this thing.
I just can't comprehend how this mostly already dated system costs them so much to make that they are actually selling at a loss
At least Nintendo has learned a lesson from the mistake. The PSVita systems are still around $250, the same price as 360 and PS3 consoles <_<
a mass produced cusomised machine with a CPU equal to AMD Athlon II X3, a GPU equal to ATi 4670 512MB and 2GB of RAM, with a cheap handheld touch screen controller cost more than 300? This story isn't very convicing....
The xbox and ps3 were both sold at a loss early in their lifetimes so I don't think this is anything special. It's good though that they have chose a good and reasonable price. Nintendo will also be making money of their software sales as well, and that could componsate the loss from the hardware if lots of people buy it.
Simple .. because people these days are following products that looks like tablets for example samsung and apple products , This is why the Wii U will be sold at loss !
Good strategy ... Nintendo .
If I remember correctly, this was the case with the PS3, among others. I seriously doubt they would completely shoot themselves in the foot especially with something they have control over. Well, they have control over how much it costs them, just not how many they will sell(we all know this is going to sell very well). It also could be a ploy to move more systems whether this article is true or not.
Nothing against Nintendo but I haven't bought one of their systems since the SNES. I'm not going to start now.
That's good for the customers!
Everyone should buy one and give it ago!
Come on support Nintendo. they are one of the original gaming consoles first released. they have pioneered gaming and shown us what fun is for many years.
Show them some love and thank them for the likes of Playstation and XBOX by buying a WiiU. Please dont let this great brand just fade away.
@GH05T-666 Wow, really? Your entire argument is "support the brand?" Nintendo was dumb enough to consciously re-brand itself right out of the core gamer market. If gamers made decisions based on commercials, targeted appeal, and branding then Nintendo would be abondoned by now. Luckily they have some tangibly solid products still being produced. Lesson: support products, not brands.
@GH05T-666 you need to brush up on your history there...
@madman608 Because people are gullible and follow fads instead of thinking for themselves. They are the countless millions watching their Wii set on a shelf collecting dust....because they wanted to be "cool" and own own like everyone else. The Wii U will be more of the same gimmick ridden crap. This tablet controller is a travesty in waiting.
@DarthLod @madman608 the original wii that was nothing more than a gimmik only good for playing light gun shooters. but some of the games coming to wii you kinda surguest this is going to be a bit more than a gimmik.. the original wii was aimed at capturing the casual market but the wii u they seem more forcus on games to attrect hardcore plays and this is good because it gives the wii u potental to be worth the buy. while they will need more to convince me i have to say bayonetta 2 and zombie u is a damn good start.
nintendo can afford losses they are a multi million dollar company so l would of expected wii u to be more powerfull than a 7 year old console which in australia you can buy for less than $70 for the basic xbox 360 models
Content you might like…
Users who looked at this article also looked at these content items.
Emmy-winning writer Jon Vitti, who penned "Mr. Plow" episode of The Simpsons, working on 2016 film based on Rovio's game. Full Story
- Posted May 20, 2013 12:23 pm PT
Bankrupt publisher hoping to bring in at least $22 million from upcoming asset auctions. Full Story
- Posted May 23, 2013 9:43 am PT
Network journalist acknowledges one-sided violent video game report; invitations to Bungie and the Entertainment Software Association were declined. Full Story
- Posted May 20, 2013 10:45 pm PT