updated 10:53 am EDT, Thu October 25, 2012
Cost lowers estimated net profit by $175M
Nintendo will sell the Wii U, its next game console, at a loss from launch. A presentation from CEO and President Satoru Iwata said that the console's price is "below cost", and claimed to be one reason for the company's annual net profit outlook being reduced from $251 million down to $75.2 million.
"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", said Iwata in a statement. He also added that the in the first half of the term before the Wii U launch, "we were not able to make a profit on software for the system while we had to book a loss on the hardware."
The company's first-half losses were $351 million, higher than the initially forecast losses of $251 million. It was also revealed that the company had sold 5 million 3DS units over the six month period, bringing the total up to over 22 million globally. It predicts 17.5 million 3DS sales by the end of the financial year, and 5.5 million for the Wii U.