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Nintendo Wii U to sell at a loss, desperately needs sales

by Alistair Lowe on 26 October 2012, 10:45

Tags: Nintendo (TYO:7974)

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Selling hardware at a loss is a trend only recently explored by Nintendo with its 3DS handheld console, which, at launch, hit the market with too great of a cost, limiting sales. The firm subsequently dropped the price to below cost, witnessing a moderate improvement in sales.

The 3DS hardware is already back in-profit as Nintendo has managed to cut production overheads and so we have no doubt that the firm is kicking itself for not keeping the cost low at launch, when introduction of the new device had some serious momentum and PR behind it.

Nintendo Wii U

Not to be caught making the same mistake twice, Nintendo revealed at an investor briefing that the firm would globally be selling the Wii U below cost, having chosen price-points that it believes will appeal to the consumer, rather than determining a price based around manufacturing cost.

This practise is fairly common in the console industry, with high-end consoles selling at a significant loss when first launched, in an attempt to establish a larger consumer base, with games the primary income source. Nintendo, with its affordable hardware, has rarely had sell below cost to appeal to consumers.

This either means that the Wii U is believed by the firm to offer a great experience for its £250 price-point or, that the hardware itself is surprisingly costly to manufacture. Release is only one month away, November 30th, and so we'll have our answer soon enough. Either way, given recent Nintendo losses, the firm really needs to rally consumers behind the Wii U.

HEXUS Forums :: 10 Comments

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Is anyone that bothered, does anyone other than hard core techies and gamers care about this…

Simply put ‘NO’

Is this a nail in the coffin for Nintendo - are we seeing the Nokia story all over again.
It's not uncommon for consoles to sell at a loss, at least initially; both the PS3 and Xbox 360 did until die shrinks, dropping legacy support, and component consolidation meant they could lower production costs. A good chunk of the game sales help to make money initially though.

Not sure about the Wii though, it entered the market priced close to the others, despite costing significantly less to make, so they probably made a fair profit on it…
The Nintendo “Wii U” is the dumbest move Nintendo ever made.
They made something that that cannot be compared with anything else because it's the same like everything else, they gamed to make more money and stupidly let the buyers know that they were only in for the money.

Not a big fan of Nintendo this days and my opinions keeps going down on them more and more every time.
They made something that that cannot be compared with anything else because it's the same like everything else,

Sorry… but WHAT??!!!

Personally, I'm not sure about this dual-screen thing… but then again the proof of the pudding as they say. Doubt I'll ever buy one though.
People complained about the Wii too and it did much better than anyone suspected. TBH,I would give the Wii U a chance before declaring it a failure!!;)