According to Nintendo, the Wii U will be selling at a loss once it launches later this month. Nintendo President and CEO Satoru Iwata explained at an investor’s briefing that the system’s below cost market price is the reason for the company’s reduced annual net profit outlook. Nintendo went through a similar scenario with the 3DS, and earlier this year successfully predicted a turnaround to a profit on each handheld.
Iwata’s statement reads:
“In addition to the yen’s continuous appreciation, 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. 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. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve ‘Nintendo-like’ profits within this fiscal year.”
Report filed by Rakan Stanbouly