We’ve known since October that the Wii U would be sold at a loss, which made a number of the company’s supporters a little nervous about the future of Nintendo’s finances. However, everyone’s favourite Nintendo of America boss, Reggie Fils-Aime, has confirmed in an interview with Mercury News that the loss per console isn’t as wide a margin as everyone feared it would be.
He said that the loss with each sale actually returns to the company with only one game sale:
“The business model doesn’t change dramatically, in that as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.
In the end, the business model is still to drive the install base of hardware, and then to drive a strong tie ratio with all of the other software and experiences for the consumer. And if we’re able to do that, then we will create significant profit for the company.”
We know that Nintendo’s royalty on each game is around 20-30%, so that works out to about a fifteen dollar loss per Wii U sold. And when you factor in potential manufacturing improvements as more and more systems roll off the line, that’s a very small line to rise up to, compared to many other gaming systems which have been sold at a loss over the past decade.
So, true Nintendo fans, never fear—once you buy your copy of New Super Mario Bros. U, you’ve helped the company remain on its feet and stay profitable. Sounds like a pretty good setup for a company with a brand new console on the market!
