Nintendo Wii U Being Sold Below Manufacturing Cost
The Nintendo Wii U will go on sale in November, and it will be sold at prices below manufacturing cost.
Speaking about the company’s loss leader, CEO and President Satoru Iwata said the “below cost” pricing was the reason Nintendo dropped its annual net profit outlook from $251 million to $75.2 million.
In a public statement, Iwata revealed:
“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 then added during the first half of the term ahead of the Wii U launch:
“We were not able to make a profit on software for the system while we had to book a loss on the hardware.”
Nintendo’s first half losses were sizeable at $351 million, exceeding forecast losses of $251 million.
The company sold 5 million 3DS units over the same six month reporting period for a 22 million global sales push. Nintendo is forecasting the sale of 17.5 million 3DS units by the end of its financial year. And 5.5 million Wii U gaming consoles are expected to ship by Q2.
With graphics and a processor that have not been drastically improved and a yet to be market tested touchscreen controller, it will be interesting to see if Nintendo can once again pull off a sales miracle.
Will you be running out to purchase a Nintendo Wii U or perhaps ordering a device ahead of its November release?