Nintendo: Wii U Starts to Make Profit Once the First Game Gets Sold

Nintendo Wii U Very Close to Break Even Point – President of Nintendo of America

by Anton Shilov
11/22/2012 | 08:55 AM

While Nintendo sells Wii U video game consoles at a loss, that loss is not really significant. According to the president of Nintendo of America, the company starts to make profit on the console once the first game title for that very Wii U is bought.

 

“The [video game console] business model does not change dramatically, in that as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive,” said Reggie Fils-Aime, the president of Nintendo of America, in an interview with MercuryNews web-site.

 

It is unclear how much money Nintendo losses on every Wii U and how much it makes on video games for the platform. What is obvious is that Nintendo Wii U is very close to break-even point and unlike other makers of consoles, who sell their hardware at a loss, Nintendo will hardly make a significant loss by selling next-gen hardware in the first months of sales.

Nintendo expects to sell around 5.5 million Wii U game consoles as well as 24 million of video games for Wii U worldwide by March 31, 2013, the company revealed in its financial release recently. It is noteworthy that by the same date the firm plans to sell another five million of its previous-generation Wii game systems. By contrast, Nintendo expected to sell 12 million Wii game systems in the second half of its fiscal 2011 (October, 2011 – March 31, 2012), which means that at present Nintendo is either very conservative about Wii U success, has production issues with its next-gen console or plans to intentionally limit the amount of consoles it will sell to control losses.

Nintendo Wii U is based on a custom multi-core IBM Power microprocessor equipped with 1GB of system memory as well as a modern custom AMD Radeon HD graphics processing unit with high-definition graphics and video support that is equipped with 1GB of graphics memory. The consoles come with 32GB or 8GB of NAND flash storage and an optical drive to read custom discs.

The main feature of the game console is its unique Wii U GamePad controller with 6.2" touch-screen that also features an accelerometer and a gyroscope, a rumble feature, an inward-facing camera, a microphone and speakers that can be used to play both classic Gamecube/Wii games as well as specially designed titles that take advantage of the screen. Each Wii U console will be partnered with a new controller and can also use up to four additional Wii Remote or Wii Remote Plus controllers. The system is also backward compatible and can play all Wii games and use all Wii accessories.

Nintendo Wii U console landed in the U.S. on November 18, then it will launch in Europe on November 30, then in Japan on December 8, 2012. In the U.S., the basic bundle costs $299, the premium bundle is available for $349. In Europe, the basic white version will be sold for €299/£249, while the deluxe black will carry €349/£299 price-tag. In Japan, the white and black Wii U will cost ¥26250 and ¥31500, respectively.