The Nintendo Wii U turns a profit after just one game title is sold to compliment the system, quite the feat in an industry where gaming console sales can cause losses for years to come. To put Nintendo’s sales strategy into perspective, it took four years for the Sony PlayStation 3 to churn out a profit and it took Microsoft’s Xbox division five years to leave the red.
Speaking to the Mercury News, Nintendo of America president Reggie Fils-Aime confirmed the company’s short-term loss-leader strategy:
“As soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.”
Fils-Aime did not state whether adding the $349.99 Deluxe console into the mix made a difference. The deluxe console comes equipped with charging cradles, extra storage, and a dock for an additional $50 cost over the basic 8GB Wii U console.
Nintendo has been successful in pushing down costs by avoiding the sleek design protocols used by its competitors. For example, the company has chosen a larger optical drive over a slimmer version. Nintendo also chose a bigger processor die to help push down initial costs.
The Nintendo Wii U strategy appears to be working. After launching the Wii U on November 18, the North American version of the system has sold out everywhere. Nintendo expected to ship 5.5 million Nintendo Wii U consoles by the end of fiscal 2012.
Given that no customer would spend $299.99 on a gaming console only to play the free included title, there is a very real chance that Nintendo console sales are leading to guaranteed profits for the entertainment company.