160°

Why Nintendo is losing money on each Wii U launch unit

ARS - Company is counting on strong software sales to turn a profit this year.

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arstechnica.com
DeadlyFire4187d ago

I say its the WiiU gamepad as the only thing causing them to lose money, but with WiiU Pro and WiiU motion(Wii controller) also out there I expect them to make it up with those sales too.

guitarded774187d ago

Yeah, they made their money back off me already. I got a Deluxe, which they took a loss on, but bought a pro controller, a wand, a navi and 2 games, which they turned a profit on. Counting down the days... it's going to be gamers paradise with BlOps 2 coming the 13th, Wii U the 18th and PSABR on the 20th. The big three will all be getting money from me over the course of that week.

ZoyosJD4187d ago

LOL

Big 3 = Nintendo, PS, Activision...

Sad, but Activision practically owns MS's game division with their timed exclusive content.

guitarded774187d ago

@ ZoyosJD

LOL, yeah, I think I was thinking about Halo 4 the week before instead of BlOps 2 when refering to the big 3. Cut me some slack, it's the weekend. But yeah, I see the ridiculous part of my statement.

ABizzel14187d ago (Edited 4187d ago )

If they are selling at a loss it's so incremental that selling just one game with the console is causing them to break even. All the tech in the system alone should be around $200 - $250 and the controller was rumored to cost only $50 to produce ($250 - $300).

So selling just 1 game will allow Nintendo to break even on the console Day 1. Nintendo does not sale hardware for a loss, and generally speaking their hardware is always priced significantly greater than the retail sale price (DS, Wii, 3DS, Wii-U).

simply search manufacturing / production cost for these consoles and handhelds and do a bit of research for individual parts, and you'll find more often then not you're getting the short end of the stick. You're paying for coding that prevents these consoles from being standard PC's and the OS.

You can make a PC that runs console graphics in 1080p @ 60fps right now for $400 or less.

@ZoyosJD

LMAO

Outside_ofthe_Box4187d ago

"***You can make a PC that runs console graphics in 1080p @ 60fps right now for $400 or less."***

Can I make a PC that runs console exclusives though? That's what I thought. Get out with that PC rubbish nonsense.

ABizzel14187d ago

@Outside of the box

There's always one.

The purpose of that comment was to show that the Wii-U shouldn't be sold at a loss by comparing it to superior hardware that cost less than $100 more. There are several reports that show that the tablet controller for the Wii-U only cost around $50 to make, but it'll probably cost gamers $69.99 - $99.99 to buy because it's another way to bring in profit (once they go on sale).

It had nothing to do with what system has what games. The Wii-U in total should cost NINTENDO no more than $250 to produce, whereas the average consume can go out an build a Wii-U PC for around $299. So once again that's why I said Nintendo shouldn't be taking a loss on the console Day 1, especially since most people who buy the console are going to buy at least 1 game.

+ Show (2) more repliesLast reply 4187d ago
cannon88004187d ago

Someone from Nintendo already said this a few weeks ago that they're selling at a loss.

ronin4life4187d ago

The story itself is old I think. In it they reference the investors briefing as being "yesterday" when it was a while ago.

Deku-Johnny4187d ago

Actually a couple of months ago the Wii U would have made a profit on every system. It's the change in the exchange rate across all regions that has made it sell at a loss.

Realplaya4187d ago

I say the whole system is causing the to lose money. 3ds is sold for a loss and it's half the cost and has 20 percent of the technology used in the WIIU.

Ck1x4187d ago

The 3ds isnt selling at a loss anymore and I thought that Nintendo specified that it is the basic model that is losing them money, because the system is currently costing more than $299.99 to manufacture.

WiiUalpha4187d ago

How can they b losing money on the basic but not the deluxe when its the deluxe that offered so much more for only 50? Im thinking u meant deluxe not basic

Realplaya4187d ago

I was saying the 3ds is losing moey I'm saying from a technolgy perspective the 3ds isn't on the same level and when they priced it where they would make money. They didn't sell so they had to drop the price and take a loss. Remember how much they 3ds cost at launch?

The WIIU is a different beast and what we forget is that video games systems utilize older tech and less comparable tech than pc's but to produce a system that doesn't break down and performs as intended is a different story.

With that being said you facter in manufacturing cost and the the fact that the controller is a cross between a Vita and a 3ds without a independent processer and you have a system that's processing for two independent systems. That right there tells you the system is both capable and powerful.

Burning_Finger4187d ago (Edited 4187d ago )

I Believed that Nintendo are just saying that their losing money on each Wii U sold due to manufacturing cost. They want the public to believed that they are spending money on "tech" that has been available for years and costing them a fortune to developed. Supply and demands, Investors and Tech enthusiast are Nintendo's business scheme.

Also, If you think Nintendo are losing money on each Wii U sold. Investors would likely cash out and not Invest on Nintendo's stocks at all. It's a big risk in the business world.

greenpowerz4187d ago (Edited 4187d ago )

I have to agree with you as a possibility. well said.

I might just add that we have no idea what that tablet controller costs hardware wise or R&D

7th generation controllers are often $40-$65 so would it be hard to imagine the tablet is that of $100 or more in value? It is the most advanced controller a console has ever had. Plus the console hardware is still more advanced despite not being to your standards.

Possible Nintendo mind games again? Probably not.

What I said could nullify your theory in the end.

eferreira4187d ago

I doubt the game pad costs so much to produce. The thing isn't hd and gesture touch. It's pretty basic for a screen

FlairSomewhere4187d ago (Edited 4187d ago )

It's still a respectable screen, though, pixel density wise.
It's about 158 ppi.
Compare it to these : http://en.wikipedia.org/wik...

It's more pixel dense than an iPad 2 screen and a few pixels shy of where the iPad mini sits.

By no means Retina, sure, but nothing to be laughed at as shoddy.

This controller also has infrared sensors, a camera, gyroscopes, geo magnetic sensors, microphones, rechargeable batteries, a screen, buttons, NFC reader, and whatever transmitting hardware exists to facilitate the video streaming.

All to a build quality that satisfies Nintendo.

I could see that adding up...

Using exchange rates, I think Japan is selling GamePads at $172 a pop.
But I think that's a bit high, and it doesn't equate properly, and still, that's just the price charged to consumers.

Retailers purchase the product from the manufacturer (for cheaper).

Money is made on Nintendo's end before we even buy it.

Now the retailer wants to make money too, so that's how it gets even higher.

It's also interesting to note that when people look at Nintendo selling the WiiU at a loss, they think first of the $299 & $349 packages, those numbers.

Even though their money isn't made (in this case lost) from you buying their system, it is from providing systems to the retailers.

Without a disclosed loss, I can't guess it's production cost.

cee7734187d ago (Edited 4187d ago )

its not ips or oled the screen is nothing special you can add all the ppi's the screen tech is still behind ipad 2 the res is low the screen is almost 4 inches smaller than ipad so of cource the ppi is better but is the viewing angles, colors and contrast better? no way any samoled or ips screen no matter the res will be better than the wii's u's screen pull out your dal core smart phone and compare the screen to wii U or ds hell pull the vita out its screen put both 3ds and wii U diplays to shame

cee7734187d ago

I'd assume Nintendo loses no more than $50 each system sold for the 8gb and lesser on the 32gb model and the gamepad don't appear to be that expensive its a 480p tft low res 1 point touch screen with no CPU , GPU, ram etc the screen should be way cheaper than even the Vita's screen

metroid324187d ago (Edited 4187d ago )

Calm down m8 the wiiu is very powerful thats why there loosing money and the gamepad supports 480p because thats all any gpgpu supports when gaming in full HD on a tv ? Dumb git.plus its next gen graphics being streamed not vita or 3ds graphics or ipad graphics its much nicer and cleaner even with a WVGA res because of the graphics on screen ie think Aliens on that thing.

WiiUalpha4187d ago

They lose less on the system that offers more? How does that even make sense? They give u 100 or more worth of stuff for only 50 more but are taking les in losses by giving u more? Okay....

DivineAssault 4187d ago

relax buddy.. U are way too defensive about the subject.. Some ppl dont like the wii u, get over it.. Its nintendos job to convince ppl its price & features are worth getting.. Its working on its fans because they can do no wrong in their eyes but everyone else knows their bs..

Orbis & Durango will be shown soon enough & after thats said n done, more ppl will make up their minds on wether or not wii u is a worthy purchase... From my view point, wii u has nothing to offer that PS3/360 doesnt offer already..

cee7734187d ago (Edited 4187d ago )

@wiiu alpha

The only difference between the sku's is the memory and a controller dock and Nintendoland be serious those COST's almost nothing

Its a simple bait and switch just like the launch model ps3 Sony lost more on the 20gb than the 60gb

32gb of flash is not much more than a 8gb of flash look it up
Google did it with the nexus 7 8gb and 16gb cost about the same that's why the nexus is now 16 and 32gb and yet they cost the same as when it launched ninety is using flash not ssd not HDD flash is cheaper than ever the core and die hards will lean towards the 32gb thus making Nintendo more money so in other words yes they are losing less for the system that offers more apple has done this for ages its gadgets that contain flash memory

herbs4187d ago (Edited 4187d ago )

People need to realize that screen clarity has to do with resolution in relation to screen size, it's called pixel density also known as ppi (pixels per square inch) The Wii U gamepad has a ppi of 163, in comparison a 50" 1080p TV has a ppi of 43 although you would be viewing the TV from a greater distance. What I'm getting at is the gamepad will have a very nice screen and to say that its only 480p low res is invalid.

FlairSomewhere4187d ago (Edited 4187d ago )

Atta boy, rational thought :)

It's 158 ppi btw ;)

Square root of (pixel width squared plus pixel height squared)
Which is then divided by diagonal length (in inches)

herbs4187d ago

Your math is correct FlairSomewhere but infact the gamepad ppi is 163 because the resolution is actually 854 x 480 Thanks for the intelligent comment :)

FlairSomewhere4187d ago

Lol I actually used 854 x 480 ...

Yay for being smart, everybody wins, I guess.

herbs4187d ago (Edited 4187d ago )

Lol here I am trying to sound all smart, next time I will double check my maths. Like they say assumption is the mother of all fuck ups. Thanks again for the corrections ha ha ;)

+ Show (1) more replyLast reply 4187d ago
Jek_Porkins4187d ago

Isn't the R&D cost included when the first consoles are sold? I think if Nintendo operates at a loss, they probably wont for long. They really need to offer a Metroid or Zelda game within the Wii U's first two years.

Show all comments (36)
80°

Nintendo's Massacre Of The 3DS And Wii U Is Finally Complete, Regrettably

Hanzala from eXputer: "The cruel hammer of Nintendo has fallen. Farewell, 3DS and Wii U, you surely brightened my life and many others; you won't be forgotten."

280°

Xbox's Preservation Step Sets A Much-Needed Example, Especially For Nintendo

Hanzla from eXputer inquires: "If Xbox can care about preserving its games and legacy, what exactly is wrong with Nintendo, trying to kill game preservation single-handedly?"

purple1019d ago

Ahh yes the good old game preservation of saving all your games to a removable hhd on the Xbox 360, taking it round your mates house, setting up multiple tvs to
Be met with “save data corrupted, please re download”

Or how about removing 360 games
From the store
, download them now or else, and, better hope to god that save data doesn’t corrupt, or it’s lost for ever

Nice one ☝️

Zeref8d ago

It's better than what Nintendo and Playstation is doing. It might not be perfect but at least they are TRYING. Unlike the others.

DarXyde8d ago

Trying? Take off the blinders for a moment, mate.

1. A failure to preserve games is just that: a failure to preserve games. Don't try to sugarcoat it: NO ONE is doing it properly. Better than awful is nothing to write home about.

2. At the time of this comment, isn't it the case that you need an internet connection to play Xbox games even if you buy physical discs that are hardly in circulation anymore? I don't have a Series X and I can't verify, but I think that is correct. I'm fairly certain you can at least play PS5 games at version 1.0 (not much of a win really when many games require day one patches). I think Microsoft's all digital, licensing approach is by far more aggressive than anyone else's. They really try to push you to game pass where you lose your entire library by umm.... Skipping a month of payments.

I don't think anyone is doing it right whatsoever. Don't get me started on Nintendo, who goes after anyone looking to preserve their games better than they ever would with extreme litigation.

Don't be a simp for any of these companies. Get it together.

PhillyDonJawn8d ago (Edited 8d ago )

@DarX never speak on Xbox again. You lost all credibility with your internet connection comment. Smh you have 0 clue and misinformed yet speaking on something you don't no squat about.

Einhander19728d ago

What has Sony done exactly? You guys keep deflecting to Sony but I am not actually seeing any results, and ai am certain nothing that you can come up with even comes close to what Microsoft has done and what they have tried and failed to do, like tie all your disks to your account on xbone.

Microsoft removed their whole indie section when they moved to the xbone because they were going to only allow games on the service that came from a publisher, id@xbox started after xbone launched and it only exists because Sony embraced indie and Microsoft was forced to cancel their plans and reverse course.

And every single game that was part of games for windows live including disk games (I have gta 4 on disk that won't work) so hundreds of games that use that DRM no longer work unless the company themselves patched it out which of course very few did.

MrBaskerville8d ago

Not trying. Tried. they killed of the backcomp program years ago. They set something up again, but sounds like it's more of an attempt to save the current library on whatever they are planning next. With luck they save everything and more, but let's see. I could see them killing off parts of the OG xbox and 360 libraries. Can't imagine that they would allow us to play Forza 5-7 in the future.

With that said, I do like what they've done and really wish they could have done more.

shinoff21838d ago

Zeref

So killing off physical media is trying what exactly. Ms don't really give a fk if you think they do your kidding yourself.

Profchaos8d ago

They are not trying this team is established for forward compatability the team is. It interested in preserving Xbox or 360 games.

+ Show (3) more repliesLast reply 8d ago
isarai9d ago

Is that why Hellblade 2 is digital only?

Zeref8d ago

Just because it's digital only doesn't mean you can't preserve it. Just put it on an external and you have the exact same functionality of what a disc does.

MrNinosan8d ago

Guess you're trolling, but if you actually think that's how it works, I'd recommend buying some braincells.

mkis0077d ago (Edited 7d ago )

Volitile vs nonvolitile data. A disc will not corrupt either. A drive can be corrupted.

Einhander19729d ago

This is just a scammy PR move to distract from the fact they are going digital only and trying to push streaming and subscriptions only.

No gaming company has pushed harder to remove ownership than Microsoft.

Without discs there is no preservation, preservation can't be done by the rights holders it can only be done by the consumers, anything else is a lie.

9d ago Replies(3)
Einhander19729d ago

Anyone remember xblig which Microsoft removed their whole 360 indie section removing hundreds of games from people?

9d ago
9d ago
Zeref8d ago

Do you know you can put your games on an external and preserve them that way? There are no benefits to discs. ZERO. Idk why some of you are still obsessed with them.

DarXyde8d ago

Because games like Persona 5 exist. It's STILL V1.00. On Playstation, that's a win because 1.00 is installed on the disc—no need to download anything.

If a game does not require any updates, it's all on the disc.

Extremely low bar in the modern era, of course. It's not much of a win by any stretch.

But for now, physical media does have a purpose, at least on Playstation.

Einhander19728d ago

That is factually not how game licensing works, try plugging your hard drive into someone else xbox, It's not going to work, and it won't work if the licensing servers ever go down.

Einhander19728d ago

Anyone remember games for windows live.

I have around a dozen games, some on Steam itself that will not work because Microsoft shut off the licensing servers.

BehindTheRows8d ago (Edited 8d ago )

I do. I STILL have games (Gears of War being the big one) I cannot access because Games for Windows LIVE is total garbage and no one has held Microsoft accountable.

Zeref8d ago (Edited 8d ago )

You don't have an Xbox apparently. Because you can 100 percent plug in your external and play games from it on any Xbox console lol. You just have to be logged in to prove ownership.

Chevalier8d ago

"You don't have an Xbox apparently. Because you can 100 percent plug in your external and play games from it on any Xbox console lol. You just have to be logged in to prove ownership."

Damn how many times do people got to explain your idiocy to you? You can take a copy of Persona 5 like someone used as an example and play that game on ANY console WITHOUT logging in which means I can lend the game to a friend without internet and they can play my game. Can you lend your hard drive to anyone without logging in for them to play? NOPE. That is a huge difference and if you think otherwise then sorry you're an idiot.

Tacoboto8d ago

"No gaming company has pushed harder to remove ownership than Microsoft."

Ubisoft is literally erasing games people bought from their libraries... My PS1-3 discs are useless on modern hardware. Nintendo's re-published and resold almost their entire Wii U library, and the eShop is completely dead with no BC mechanism in the Switch software. Microsoft publishes everything they make today day one on Steam and Xbox/Windows. Sony only brings to PC the titles they think you might want some years later and Nintendo won't even design a functional long-lasting joystick.

You're absolutely trolling and not serious if you think Microsoft today is the worst offender.

shinoff21838d ago

Yay steam

Not everyone fks with computers though. The disc is still the best way as a console player. Period.

Tacoboto8d ago

How do Sony and Nintendo feel about these discs from 2001-2013?

Don't be stupid, you know Xbox is the best at this today.

+ Show (3) more repliesLast reply 8d ago
Hofstaderman8d ago

Nobody wants this. Sales or the lack of it in the case of XBOX is very telling. I wonder how the adorably all digital series X will fare. Adorably dismal perhaps?

crazyCoconuts8d ago

Only time will tell, but for from someone like me suspecting that Xbox is trying to gracefully exit the console market, that "forward compatibility" team is trying to get Xbox games playing on Windows PCs. I mean, it's nice that they're not planning on exiting with a "enjoy your games while the hardware still works" message, so that's nice. They still have a brand to protect via Microsoft so probably feel obligated to have a better exit strategy.

Xeofate8d ago (Edited 8d ago )

That is not their plan, their plan is to transfer users accounts to the cloud.

Phil Spencer himself said as much a few months back, plans could have changed but I think people are reading way too much into one statement where Phil said he would allow Epic on xbox because he wants to be able to sell xbox games directly on other platforms. Aka, instead of selling Sea of Thives through PSN he wants to have an xbox store to sell his games on PlayStation without giving PlayStation any money.

Again, it's extremely unlikely that Phil plans to put PC on xbox and licensing would prevent them from just giving out other publishers games purchased on xbox copies of thier games on PC, Microsoft does not own their games.

crazyCoconuts7d ago

The thing that doesn't align with the cloud strategy is the giving up on exclusives. You'd still need strong exclusives for cloud streaming - it's still a "platform" , just with a lower upfront hardware investment. I feel like they've learned what PS learned with PSNow long ago. We're not ready to stream games and it's only gonna lose them money to try at this point

FinalFantasyFanatic8d ago

I would love that, I'd buy up some of the Xbox games if they could run on PC, like the Rare Replay, Lost Odyssey and Dead or Alive Ultimate, probably a pipe dream though.

Show all comments (43)
90°

Nintendo's War Against Player-Made Content Will Hurt The Company In The End

Danish from eXputer: "Nintendo has historically gone against player-made content and emulation of its games. This has done much to harm the company's image."

XiNatsuDragnel15d ago

I agree nintendo hire some these folks to help in your games it'll help imo.

banger8814d ago

They need to stop announcing these mods and fan remakes until they're finished. Finish it, upload it, and then if Nintendo dmca's it tough shit. Once it's online, people can share it around, even if the original download gets taken down.

Jingsing14d ago

True, but most modders need constant admiration during the process to motivate them.

PRIMORDUS14d ago

Yup, once it's a torrent nothing can be done Nintendo is helpless at that point. But it would be wise if they just had a site on the dark web, it's also easy to use with Tor and no one will bother you.

mastershredder14d ago

This is all coming from the mouth of short-sighted fandom and grifting madness.
No.... it wont. There is a clear defined reason why they don't. This is nothing new. Make your own shi7 from your own original ideas especially if you are trying to capitalize of it it. Duh.

Yeah, hire people that have zero respect or understanding for an established process. Wow. Yep. Totally makes sense.

shinoff218314d ago

Those guys that made that sonic game got a gig from sega or something along those lines and that game was dope as hell. One of the best sonics as of late.