If you think the Wii U is expensive at $300, it’s actually more expensive for Nintendo to make one.
Nintendo will actually be selling each unit at a loss, with the hopes that it will be able to recoup those losses through the sale of higher-margin software and digital downloads, company president Satoru Iwata has revealed.
This practice is incredibly common among the video game console industry. However, Nintendo has typically sought to separate itself from the pack by being the one company that could actually turn a profit on its systems from day one.
Apparently the economics of the industry have just shifted too much to continue that strategy.
Iwata’s full statement reads, “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.”
He continued to say that in this fiscal year, because of the Wii U losses, the company will not achieve “‘Nintendo-like’ profits.”
Getting a Wii U on launch day will involve waiting outside a store for several hours on a cold November night.
Because of problems with the manufacturing of the touchscreen Wii U Gamepad, it’s believed that the stock will be notably low on launch day, which could lead to huge lines and Ebay prices going through the roof.
Nintendo hasn’t announced where the official launch party will take place, which is where one would expect to see the largest quantity of devices. These events usually happen in New York City or southern California.
Regardless, it’s going to be one big rush for the Wii U this holiday season. Be prepared.