Nintendo will sell the Wii U at a loss this November. This isn’t surprising, since it seems to happen with a lot of console-makers when they first create their product. Sony, Microsoft, and Nintendo have all done this in the past, with varying results. Gradually, the price for the components will go down and they’ll start to see a profit. It’s pretty amazing to see how much these components cost.
It’s mostly because of the unicorn blood required in all electronics, because by golly those things are hard to track down. I mean, the cost certainly isn’t due to any hardware manufacturer’s fair labor practices.
Nintendo elaborated on the thought process behind their move to sell the Wii U at a loss, “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.” Nintendo might have another rough quarter whether the Wii U does well or not.
