Wii U hardware becomes profitable after one game sale
by Alice O'Connor, shacknews.com, Nov 21, 2012 2:30PM PST
Nintendo has said that it sells the Wii U console at a loss and hopes the shiny new hardware will become profitable in itself next year, but how much does it lose on each sale? Not too much, it turns out, as Wii U owners buying one single game is enough to push the whole shebang into profit.
Asked by Mercury News how selling at a loss, unconventional for Nintendo, shakes things up, Nintendo of America president Reggie Fils-Aime replied, "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."
He explained, "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." And of course, Nintendo plans for future hardware profitability to come from decreased manufacturing costs.
Console warriors, scrawl this fact down in your notebook for future foolish arguments.