Nintendo: Wii U will be sold at a loss

XMNR: In a move that completely contradicts Nintendo's standard console sales strategy, the company announced Wednesday that the Wii U will be sold at a loss.

[WildStyles]

Crazy news. It must be the controller.

[Abash]

Well this raises the stakes and puts even more pressure on Nintendo for the Wii U having a big and successful launch. I have hardly seen any ads for it though

[guitarded77]

I'm surprised by this news... Nintendo has always been the day one profit on hardware guys. Anyway, if it's true, it's a good move, because the Wii U is priced right. They'll make it all up in software and as they produce more, profits will be made on the hardware. I think Sony took a huge hit on the first PS3s if I remember correctly, now they make money off them.

[WrAiTh Sp3cTr3]

They probably went with a more powerful Cpu at the last minute...

[SilentNegotiator]

Time to sell NTDOY shares. Well, 5 years ago it was, but still....the price has been all downhill as it is.

[Zhipp]

@Masane
Actually, they sold the Gamecube at a loss last gen after the price cut, so this isn't exactly new for them. It's their first time LAUNCHING a system at a loss, though...I think.

My question is: Which version of the console is being sold at a loss? Considering that the components included in the delux bundle aren't all that expensive(and I don't think they can factor in the development costs of Nintendoland) even if they are losing money on the Standard console, they may still be pulling a profit on the Delux edition. Either that, or they're losing money on the Delux, and losing even more on the Basic.

[dark-hollow]

I doubt that the gamepad is THAT expensive to manufacture.

You would be surprised to find how cheap a piece of plastic with 6 inch 480p TN display cost to make.

[hellvaguy]

http://www.samsung.com/us/a...

The 5.5" $299 Galaxy Note 3 touchscreen says hi.

That gamepad happens to have built in controls plus a touch screen. Hugh cost increase from a regular 6" screen. But Im sure you already knew that Derp-Hallow, being so in the electronics manufacturing sector.

[rpd123]

@hellvaguy

There's a difference between production cost and retail price. Typically retail price is higher than production cost so people can make what's called a "profit".

[ChickeyCantor]

@hellvaguy

The gamepad doesn't come with a CPU/GPU. A circuit board for buttons and 2 analog sticks are dirt cheap.

[SonyNGP]

@hellvaguy

$300 with a 2 year contract. $650 suggested retail price (without a contract).

Try again.

Also, it's the Galaxy Note 2. Get your facts straight.

[stragomccloud]

Actually the controller costs only about 50 to make. They'll be selling it for about $100(Well in Japan, anyway). So I imagine it has to do with the system itself. Afterall, the controller isn't a standalone system, it's just a controller with a screen on it, it basically just needs receiving hardware.

[OooHJohnny]

100 bucks to get a second controller? no way!

[Qrphe]

It has to be the system. It seems the costs reside in the manufacturing of the device and not the component themselves.

[Queasy]

It's not just the cost of the components but boring stuff like exchange rates too. The Yen is so much stronger than the dollar and euro that it is costing Nintendo money to sell stuff overseas.

[torchic]

I'm pretty sure the Wii U is built in China...

[Queasy]

@torchic: The fact that the Wii U is built in Japan doesn't matter when the exchange rate between the Yen and Dollar/Euro is so out of whack.

[GraveLord]

Yup. It's all because of that controller. We already know the console itself isn't anything special.

Anyway they're probably taking only a small loss.

[JellyJelly]

"We already know the console itself isn't anything special."

Have you played it? I haven't.

[Outside_ofthe_Box]

Wow, crazy news indeed. The Wii U is being sold at a loss and fools are saying the system is overpriced? Not only that, they want and are predicting that Nintendo is going to cut the price few months after launch after all the hardcore gamers buy it? Yeah I'm not seeing that happening.

[Oh_Yeah]

Nintendo can afford to sell consoles at a loss for over a decade if they really wanted too. Don't kid yourself.

[otherZinc]

I played the Wii U today at Best Buy.

Soccer Moms are going to be pissed when they find that Lil Johnny & Timmy have to share the Wii-Pad. AND they cant buy another to appease Timmy.

Playing on the tv then playing looking down at the pad, I didn't like that.

I predict it will sell to the Faithful but that mass Soccer Mom craze isn't happening this time around.

This may be a mega fail.

[LX-General-Kaos]

Interesting news

If Nintendo is selling at a loss that marks me wrong with my prediction of them returning to great profits leading into 2013. But more importantly what does this mean for other corporations who have been said to have "much more capable hardware" Than the Nintendo Wii U entertainment system. It makes me wonder if such a risk is still worth taking, especially from brands that are financially unstable. I always believe that making a profit from day one was one of the most important business decisions within a console launch. These days not even a company as conservative as Nintendo can create such a reality.

If this is the story for the Nintendo Wii U entertainment system, it will be interesting to see if any major risks are taken from anyone else hardware wise next generation. It looks like there will be balance issues between raw graphical capability VS advancement and innovation.

What would you rather have your platform of choice do? Take the Nintendo path taking on expensive innovation, or shoot for a massive graphical leap?

Rated E For Everyone

[Neonridr]

they didn't say how much of a loss they are taking, it could end up being like 10 bucks for all we know.

[LX-General-Kaos]

That is understood, but the greater the risk the greater the loss typically.

[cleft5]

Even at 10 dollars that adds up to be a great deal of money. Lets say it's only 5 bucks a lost per console. After a million consoles that is $5 million that Nintendo has lost. Every penny counts, especially when you take into account the current state of the economy.

[Neonridr]

Don't get me wrong, I am not supporting the selling at a loss idea, but if it increases their user base by selling it for less, then you have to appreciate it. Th PS3 sold for a big loss for a while. And if the Wii U is selling for a loss at $350, then how much you think the PS4/720 are going to sell for?

[DeadlyFire]

Well there is word that the costs are up to $375 bucks for production. $25-50 loss isn't much and likely the pad controller is to blame. Even so its very likely that goes away in a short while.

@neonridr
PS4/XB3 shouldn't cost more than 400-500 bucks without Kinect2/Move2 anyway.

[HammadTheBeast]

I'd be mad if the company I worked for hadn't told me all this. Aren't you?

[beerkeg]

Why would it matter to you if you were working for them? You'd still be getting paid regardless.

[HammadTheBeast]

Sarcasm, because Kaos' every post is that of a Nintendo PR.

[rpd123]

This guy, making them jokes. Good one, Kaos shits out Nintendo PR on every article there is.

[cleft5]

I can honestly say that this news shocks me, just because Nintendo is known for not doing something like this at all. I think this definitely puts to rest the nonsense notion that Nintendo is intentionally selling less consoles to artificially increase demand. If anything, they need to move as many consoles as possible to get the cost of the technology down. This also explains why we aren't going to be able to buy a second Gamepad right away.

Ultimately, I feel like this was the right move for Nintendo. They needed to make this push now why they still have the hyped and revenue from the Wii. I just hope they aren't selling their consoles at too much of a lost.

[tiffac008]

This came as a surprise to me too since I can't remember the last time Ninty sold a console at a lost at launch. They usually sell them at a profit from the get go.

Then again I've learned to never underestimate the Big N.

[DivineAssault]

Well my friend, it looks like that gamepad costs a pretty penny... If the other companies focus on innovation, then the wii u may be in good shape to stay relevant for the upcoming generation.. If nintendo is going to take a hit on the console, im sure the others will also, as they have been...

It makes me wonder, if the gamepad is roughly $100-$150, the console itself is around $200.. Now if the others build a $400 console & take a hit on the cameras or whatever other innovation selling the package for $500, it may end up being a repeat of this gen all over again...

Game production is going to skyrocket in the upcoming years & it will be interesting to see if companies invest into 2-3 different game builds.. Especially with tablet gaming growing the way it is.. Publishers will have to be careful on what projects they approve for the many different platforms.. Good luck to all sides of the big 3, i look forward to a challenging debate on console dominance in the days to come..

[LX-General-Kaos]

good post man, and I will be ready for future debates when they arise.

[neogeo]

This is also good news. It shuts up the trolls that say WiiU is junk and only cost Nintendo $130 to make. If Nintendo is selling hardware at a loss that tells me the thing has some power and that makes me happy

[lilbroRx]

I wonder if this has anything to do with the foxconn issue. I remember them insisting on the not selling the Wii U at a loss. Now they won't be able to manufacture it as cheaply(though Sony and Microsoft will continue to use them and everyone will ignore it.) There has to be some new development that brought this about.

Still, I wonder, how much of a loss. Black Wii U is $50 more and the only real expense it offers is a disc they manufacture themselves which can't cost them anymore than 5 dollars. Increasing the flash storage from 8 to 32 GB is also probably no more than $5-$10 dollars.

All of this isn't adding up.

[deafdani]

Three stands, too: one for the console, one for the controller, and one charging cradle for the controller. Yes, they're just pieces of plastic, but they still add to the cost of the bundle.

[lilbroRx]

They add to the consumer, cost but not so much to the manufacturer.

What you are paying $50-$60 for when you buy a game isn't the plastic, but the data held on it. The data held within. That data rests on a hard drive and its costs were paid the day it was finished being developed.

I want to know where "their" loss is coming from. It just doesn't add up.

[wiiulee]

ok...well nintendo did the right thing....and i expected that because with the controller and the graphic gpu processor which every third party developers has said is very powerful then wiiu is quite a system.....haters will hate though and speculate about things that microsoft and sony has yet to announce.....im glad nintendo has not revealed the true spec of the wiiu because i bet sony and microsoft are looking to cut cost by bring out a system that is barely more powerful then the wiiu and shows no difference since they will all be 1080p and let their fanboys run wild about nonsense

[MultiConsoleGamer]

This is a way of giving the WiiU value in the eyes of the consumer. That's why they're telling people about the "loss." It's an old Sony trick that worked very well for the company, at least until the ps3 generation.

And of course there are people who will insist the 3ds was sold at a loss, and they will even quote various articles on the subject in their defense. The may even quote Nintendo's own creative book work. However, it was a well established fact that CoG on that device was less than $100. So despite what you have heard, the 3ds was never sold at a loss. And you should always be skeptical about similar reports concerning the WiiU.

[Yodagamer]

Well that's just for the parts, you still have to include advertising, labor, and R&D costs, among other things which can drive up the cost per unit. So when nintendo lowered the price on the 3ds they might have been selling it at a loss, just a very small one

[MultiConsoleGamer]

You should assume that I already know that true cost includes more than just CoG. (Development, packing, shipping, advertising, retailer cut, etc)

And as always, I stand by the accuracy of my statements.

[ronin4life]

Currency imbalance. They are losing a Crapton of money due to the yen.

Perhaps that is factored into the unit costs?

[vork77]

selling in a loss and the preorder ran out yea it will loose

[TheLyonKing]

If those damn foxconn kids worked for less they wouldn't be selling at a loss. /s

I should think it won't be too long after release until Nintendo can break even on each machine.

[ForRealz17]

Bullshit.

[cleft5]

Dude everything he is saying can be verified. It makes no sense for them to lie like this.

[bubblebeam]

PS3 and Xbox 360 were both selling at a loss at some point.

The truth is, the more consoles they sell, the larger the install base/popularity and software sales (games.....).

It's a smart tactic, pretty much has to be done in these times (everyone is strapped for cash :( ). The price is actually very competitive over here in Australia, so I'll probably pick one up at Christmas.

[Jadedz]

Mr.Satoru Iwata, must be going thru a mid-life crisis (joking xD)!

[ronin4life]

Weird.
They are still forecasting a profit though, aren't they? The truth is probably hidden in their revised forecast.

[josephayal]

If NINTENDO lose money on every WII U sold they are insane, Sadly I Really Don't Care i just want to keep playing on the WII U for 5-7 years

[ShaunCameron]

So I guess they're selling it for less than how much it costed them to make it.

[medziarz]

oh man, Nintendo is headed for some deep s**t,

this shouldn't be a surprise as Sony lost money on the slim, and the Wii U has a GPU and CPU of a bigger transistor count and a costly gamepad instead of a HDD

[PygmelionHunter]

Odd... I recall Iwata saying they would not sell it at a loss, oh well, doesn't change the fact that I'm eagerly waiting to play mine! C'mon! Give me some Monster Hunter!

[Zashule]

Nothing new here. Almost every console has been sold at a loss at launch. Xbox 360? Yup. Ps3? Yup. PS2? Yup. GCN? I believe so, but not 100% sure...

They make up the difference in software sold. How many people are going to buy NSMBU at launch? Plenty.

[Studio-YaMi]

I'll be sure to pick NSMBU up if I get a Wii-U at launch :D !

[ChickeyCantor]

It is "new" because Nintendo never did this before. GC was sold at a profit.

[Zashule]

GameCube was sold at a "single digit" loss at launch.
http://www.nintendoworldrep...

3DS was also sold at a loss at launch.

[1upgamer99]

Hmm that is strange, I also read that Nintendo was going to make $7 dollars profit per console sold. Well anyway, for those who did not know PS3 and Xbox360 were sold at a loss up until about 2 years ago...the reason they did that was they thought they would make the money on software sales. I don't think Microsoft or Sony thought that it would take 4 years to start turning profit on their consoles...That I believe is also why PS4 could be 2 years away and why Sony is pushing PS3 harder than ever. I am not sure about Microsoft, but I am pretty sure they will be next out of the gate with 720 next holiday I would guess.

[Adolph Fitler]

You clowns that think the tech to make that gamepad wouldn't be a factor to cost are kidding yourselves.
The Wii-U tablet-esque controller would add to the cost massively.
Take the $299 Samsung tablet Helluva mentioned & the "so called" profit that they make from that retail price of $299, & I bet production costs isn't anywhere near the $5-$10 it costs to make a DS3 or 360 controller.....that just isn't possible.
More like the pad is costing Nintendo at least an extra $100 on top of what a normal pad costs.

So, with $110 production costs on the Wii-U controller, then that leaves a couple of hundred for the equivelant of a 360/PS3 powered box, no more whatsover.....in fact, probably less powerful than both these current gen machines.

Nintendo WILL profit on the Wii-U, as they have made clear the fact they will NEVER sell a console at a loss. But, to actually be competative in this day & age, they will really take a hit on how much that profit equates to.
They may only make 0.50c to $1.00 on each machine, but they will MAKE money on each unit sold, NOT LOSE.

And, if people smarten up (which I highly doubt), Nintendo will take there place making games for Sony/MS & someone like Apple or (I hope) Samsung consoles, just like Sega ( although, unlike Nintendo, Sega deserved better & I wish I could have a Dreamcast 2 sitting beside my PS3 & 360)

The Wii is a joke, & never should have sold at all, so we could all be playing an awesome looking Mario on our PS3/360's that was actually up to current gen technology.
Fact is, Wii-U is going to be Wii all over again in tech, the only difference being the new gimmicky controller as the selling point. So, while the masses of retards lap up Nintendo's latest scam, others will be waiting it out until next year for either/both the PS4 & 720, so as to actually be playing something worth the asking price.

[Question_Mark]

You're seriously comparing a Samsung smartphone to the Wii U gamepad? The smartphone has its own processor, RAM, storage space, GPU, and 4G, not to mention the screen is 720p, while the gamepad is 480p.

The gamepad does have a gyroscope, rumble, camera, and microphone, just like the smartphone, but those aren't very expensive at all nowadays. The gamepad's screen is a single touch resistive LCD screen, which is one of the cheapest touchscreens to make.

The gamepad won't be nearly as expensive to make as people think it will be. Comparing it to a smartphone or tablet in terms of price is an incredibly stupid thing to do.

[MasterCratosKong66]

Whoa buddy take it easy. No need to be so mad. Just make the purchases you want and leave it at that.

Maybe you should take a break from gaming... maybe sit the next couple plays out.

[Question_Mark]

I’m here, years later, just because I feel like it.

[TransientDreamer]

Can I be stupid for a second? Aren't most new systems sold at a loss?

[Hicken]

Most: yes. But not Nintendo systems. They have a very long history of making profit on their consoles from Day 1. I think even the 3DS was still being sold at a profit after the price drop.

[stuntman_mike]

I'm crying in my soup!!

[FinalomegaS]

guys, think about it;

current gen consoles sells for about 249~299$ and have been on the market for how many years?

New system coming out at current gen pricing ( i think this is was done to be extremely competitive in the eyes of the core gamers)with a more expensive controller than the simple standard unit.

something had to give i think.

[Studio-YaMi]

That's understandable .. considering how profitable the Wii hardware & software sales were,I don't think it matters that much if Nintendo wants to take a risk at selling the Wii-U at a loss !

[Double_O_Revan]

Very surprising for Nintendo. I didn't think they would go that far.

[YoungPlex]

Honestly this isn't the best news for Nintendo but, it shows me how dedicated they are in drawing in core gamers rather than making a quick buck off of us. All I know is that if Nintendo is taking a loss with the Wii U then next-gen consoles will too. My question is how much of a loss will both PS4 and 720 sell for. Nintendo can afford to start off operating in the red-zone due to the massive amounts of money they made off of the original Wii and DS, 10 billion dollars in cash alone not including assets will see to that. Also, seeing as Nintendo is purely a game company, it doesn't have to worry about anything but games. It's going to be interesting to see what Microsoft and Sony put out and how they price it after hearing about this news. Either way, I'm ready for next-gen!

[LOL_WUT]

That sucks for Nintendo lets just hope lots of people buy a Wii U... ;)

[bigtrucknd]

Nintendo doesn't take any losses they use Foxconn and they use child slave labor.

[jetlian]

Dont know why people are surprised all systems sold at a loss. Thing is nintendo is taking a bigger loss than normally. The loss is bigger than nintendo thinks they could get on day one.

Say they were losing 20 dollars on wii. The average consumer who buys a console will always get another controller or game to go with the new system. Wii controllers with nun chuck and remote was 60 and they cost maybe 15 bucks to make. that leaves 45 on the table before stores cut.

Chances are they got about 20-30 out of that. So to nintendo with just selling an extra controller they made a sale which was profitable day one. Add a game it was great.

thing with wii U nintendo is probably selling the system at over 20 bucks loss and they cant fully use controllers to the same capacity this time since wii controllers work on wii u. So they arent projecting day 1 buyers to buy enough to clear the loss on the system itself

[kesvalk]

i dunno if they didn't want to rush their games to make room for the 3rd party, but i think they might rush it now...

at least a metroid or F-zero to up their profits.

[WiiUalpha]

Love the comments coming fromt he haters. It must be the controller... Cause you cant accept that it could be more powerful than you want to convince others it is.

[IWentBrokeForGaming]

I find this hard to believe!

I highly doubt it's the system or its specs that has them in this pickle but I feel it's the production costs!

[MasterD919]

Not that surprising considering that the controller is a borderline tablet.

They should be making sure the software is going to be there for this gen, otherwise they may have another hardware platform with no real base...

[Vortex3D]

Is that also because Nintendo is spending way too much money in launching Wii U?

Even Wii U is using PS3/X360 tech, is Nintendo manufacturers charging premium to make Wii U hardware?