Nintendo chief: We'll sell the Wii U at a loss

Satoru Iwata didn't say how much the Wii U costs, but even at $349 for the Deluxe set, Nintendo won't be making money on the hardware.

The Wii U is launching on November 18.
The Wii U is launching on November 18. Nintendo

Nintendo won't make a dime when it starts selling its Wii U next month. In fact, it may lose a few.

Nintendo chief Satoru Iwata said yesterday in an earnings call with investors that the Wii U "will be sold below cost." Iwata didn't say how much of a loss Nintendo is taking on the hardware, though the device's more powerful components and GamePad controller likely drove costs up.

The Wii U will launch on November 18. A basic set featuring the hardware and GamePad will cost customers $299.99. A deluxe set that adds a charging station, stand, and Nintendo Land video game will cost $349.99.

Nintendo has historically sold its new hardware at a slight profit at launch. In general, however, consoles usually sell at a loss, at least initially. Sony and Microsoft, for example, typically sell their new hardware at a loss. The reduced pricing helps attract more customers to the console, which makes it more attractive to developers. Historically, more games translates to more gamers, which translates to a console's ongoing success. Meanwhile, production costs dwindle, leaving hardware makers open to start generating a profit.

That Nintendo is losing money on the Wii U is just the latest bad news investors have heard from the company. Nintendo yesterday reported a 6.8 decline in revenue to 201 billion yen ($2.6 billion) in the six months ended September 30. It also lost 28 billion yen during the period.

 

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