November 22nd, 2012, 00:18 Posted By: wraggster
Nintendo might be selling Wii U hardware at a loss, but each sale should still result in a profit for the platform holder.
“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 told investors in October.
“In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost.”
However, speaking to Mercury News yesterday Nintendo America boss Reggie Fils-Aime has claimed that all it takes is for one game to be purchased with each console for Nintendo to make its money back.
“The business model doesn't change dramatically, in that as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive,” he insisted.
“In the end, the business model is still to drive the install base of hardware, and then to drive a strong tie ratio 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.”
All of which suggests the console’s US RRP of $300 for the Basic and $350 for the Premium is very, very close to Nintendo’s cost price.
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