Nintendo’s Wii U is a capable little game console with a nifty touchscreen-equipped GamePad controller, but one thing it’s not is profitable off the bat. Traditionally, most console hardware is sold at a loss at launch because of high-cost components that provide cutting-edge graphics and processing power. To put it into perspective, it took five years for Microsoft’s (MSFT) Xbox business to become profitable and four years for Sony’s (SNE) PlayStation 3 to get out of the red. Nintendo’s modus operandi has always been to make a profit on every console it sells, so it was shocking to hear the Wii U would be sold at a loss. But Nintendo of America president Reggie Fils-Aime recently sat down with MercuryNews and set the record straight, explaining that the Wii U isn’t losing much money per unit sold.
According to Fils-Aime, “as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.” Fils-Aime didn’t comment on whether or not the $349.99 Deluxe Set that includes a copy of Nintendo Land is immediately profitable, or if the extra charging cradles, dock, and extra storage would offset the Wii U’s profitability.
iFixit’s recent Wii U teardown supports Fils-Aime’s claims by revealing the console uses a larger optical drive over a slim one and a bigger processor die to keep manufacturing costs down.
The Wii U launched on November 18th in North America and is still sold-out virtually everywhere. Fils-Aime has promised there will be more shipments of Wii U consoles coming in time for Black Friday and remains confident Nintendo will sell 5.5 million consoles in the current fiscal year.
Author: Raymond Wong
Nintendo not making profit off Wii U consoles, but they do with the software and games
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