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Wii U Just Needs to Sell One Title to Be Profitable

By - Source: VG247 | B 41 comments

Nintendo's had a harder time this past fiscal quarter, but the Wii U being sold at a loss isn't too much of a problem.

When Nintendo made the decision to leapfrog competitors Microsoft and Sony by announcing its next-generation console early, it also took on the risk of competing with much cheaper current generation hardware. One of the pressures that Nintendo was forced to face was keeping the costs of the Wii U low enough to keep it competitive with the Xbox 360 and PlayStation 3.

Back in October, the company revealed that it would be selling the Wii U at a loss, not only because of hardware costs, but because of the yen's appreciation. As a result, Nintendo's profit margin for that fiscal quarter wasn't quite as high as investors had hoped it to be and naysayers were already predicting the company's doom.

However, the loss in selling the Wii U hardware can be quickly turned into a profit. In a recent interview with Mercury News, Nintendo of America President Reggie Fils-Aime explained that though the Wii U was selling at a loss, "[…]as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive."

Since buyers of the Wii U are unlikely to leave the store with just a Wii U in hand and no games, virtually all sold consoles are a guaranteed profit. If Wii U sales manage to even somewhat resemble the Wii's sales, then Nintendo's got yet another moneymaker on its hands.

 

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  • 14 Hide
    A Bad Day , November 24, 2012 1:40 AM
    If I do recall, the Wii's sale dropped off partially due to an overload of shovelware for the console.
Other Comments
  • 6 Hide
    wolley74 , November 24, 2012 1:14 AM
    Its not a bad system, but they need to get some of their titles on it, like Legend of Zelda and maybe Pikmin 3, get those out there and you're going to be selling a ton more
  • 3 Hide
    killerclick , November 24, 2012 1:18 AM
    I'm not into consoles but I like what Nintendo did with the Wii vs PS3 and Xbox360. They went in smart and slaughtered the competition in sales, especially the first few years when the consoles were sold at full price. Being able to dominate two competing consoles (Wii was beating both PS3 and 360 2:1 at one point) is one thing, but to do it with underpowered hardware and kiddie games really shows business sense and innovation that MS and Sony lacked.
  • 2 Hide
    combine1237 , November 24, 2012 1:23 AM
    I agree until the new Legend of Zelda comes out there shall be no Wii U in my dwelling.
  • 14 Hide
    A Bad Day , November 24, 2012 1:40 AM
    If I do recall, the Wii's sale dropped off partially due to an overload of shovelware for the console.
  • 1 Hide
    tipoo , November 24, 2012 1:58 AM
    Figured they were selling at a very small loss, it isn't Nintendos style to take a loss on hardware at all. They certainly weren't going to pull a Sony and sell a console for 200 less than it takes to make (the PS3 cost 800 to make initially).
  • -7 Hide
    eodeo , November 24, 2012 2:11 AM
    just what the world needs, another stoneaged hardware console.
  • 4 Hide
    lpedraja2002 , November 24, 2012 2:47 AM
    If they get all the "golden" N64 titles for the WiiU remade in "HD", or at least something comparable to what they did to Ocarina of Time on the 3DS then I, as I'm sure many people will buy a friggin WiiU without a doubt, even though we'll be playing for old titles AGAIN! But the oldies are better than a lot of things being made these days.
  • 4 Hide
    SneakySnake , November 24, 2012 2:50 AM
    eodeojust what the world needs, another stoneaged hardware console.


    Nintendo has never been about specs. The new WiiU though has decent one's (as far as Nintendo's standards go). It handily beats the 360 and PS3 in the spec department, and will be capable of 1080p gaming just fine. As it has been shown time and time again, Nintendo's games are about the gameplay and experience, not the technical stuff.

    Why else is it that Super Smash Bros and Mario Kart for N64 (whether it be through emulators or a legit n64) are often the most played video games on my floor in university. They're just so bloody fun
  • 0 Hide
    kinggraves , November 24, 2012 2:50 AM
    Wolley74Its not a bad system, but they need to get some of their titles on it, like Legend of Zelda and maybe Pikmin 3, get those out there and you're going to be selling a ton more


    LoZ and Metroid are their mid cycle hitters. I wouldn't expect them until next year or even two when sales start to suffer. When they do hit though, the possibilities are fantastic. No more constantly pulling up the menu to switch items for the next puzzle. At least this time they put out a Mario game from the start and some other interesting titles. Hopefully some of the 3rd party titles will sell as well so it encourages more 3rd party devs to return.

    What I'd like to see more than anything though isn't any of these, but rather a new Earthbound/Mother title. Still quite curious as to how Konami and Squenix see the new console.
  • -4 Hide
    DarkSable , November 24, 2012 2:54 AM
    Eodeo, consoles are ALWAYS going to be using hardware from the stone age.

    That's just the way they work.
  • -5 Hide
    bison88 , November 24, 2012 2:57 AM
    I'm still at a loss at how Nintendo can sell the Wii-U for $299 with hardware that barely compares to the 360/PS3 and do so at a loss. Something just does not compute here. What are you doing so very wrong Nintendo?
  • 5 Hide
    DarkSable , November 24, 2012 2:59 AM
    SneakySnakeNintendo's games are about the gameplay and experience, not the technical stuff.Why else is it that Super Smash Bros and Mario Kart for N64 (whether it be through emulators or a legit n64) are often the most played video games on my floor in university. They're just so bloody fun


    Yup. I don't know if it, or the other new consoles, will manage real 1080p gaming, or just upscaled stuff like they have right now, but you nailed it on what Nintendo does.

    Why else did World of Goo sell so well? It was childish... but it was amusing. I go to a more nerdy school, with more powerful computers, most of which can max out crysis, but... When my gaming club holds tournaments? It's 2-man mario kart double dash, or super smash brothers melee. There was a marathon of Civilization III, and counter strike 1.6... games don't HAVE to be pretty to be amazing. They just have to capture someone's whimsy. (Same reason why I'm a member of the cult followings of both Firefly and Mirror's Edge. They weren't perfect, but to me? They were damn close.)
  • 0 Hide
    eodeo , November 24, 2012 3:17 AM
    Firefly? Its amazing, no doubt about that. Mirror's Egde? Pretty sweet game, showing of that pretty graphics can save fairly average gameplay.

    Dont get me wrong, I'm not all about graphics. I play minecraft and open transport tycoon deluxe often. That said, I dont mind playing crysis campaign and wonder what if game developers weren't stuck in 2006 with the consoles. Better graphics arent end all, but they do help. DX 10/11 are amazing, but what good are they when consoles are stuck in dx9, and most games are made for consoles in mind.

    For the same reason you're excited about 1080p transition, I cant wait for dx11 games to roll out. Another phone like console with surely keep us in 2004 graphics longer, not shorter.
  • 4 Hide
    DarkSable , November 24, 2012 3:23 AM
    ^But see, here's the thing. Mirror's edge wasn't about the way the graphics LOOKED. It was about the graphical style - same as, say, borderlands. Have you heard anyone complaining it's not photorealistic enough?

    Yes, having consoles be able to do more graphical work means us PC gamers get better treats, but... It's not going to happen, not so long as console developers make their money off of the games rather than the hardware.

    What made me excited were the rumours that the xbox would be able to be upgraded with three or four different tiers of parts. That would mean a LOT for pc gamers.
  • -5 Hide
    jkflipflop98 , November 24, 2012 3:24 AM
    Yay! Yet another console that doesn't have crap for games outside the Big N's 1st party titles! Since I haven't powered on my Wii in years, I think I'll skip this one and get a GTX680 instead.
  • 9 Hide
    DarkSable , November 24, 2012 3:28 AM
    jkflipflop98Yay! Yet another console that doesn't have crap for games outside the Big N's 1st party titles! Since I haven't powered on my Wii in years, I think I'll skip this one and get a GTX680 instead.


    Get a 670 instead. 5% less powerful with $100 more in your pocket. (Sorry, been giving too much build advice recently. ;) 
  • -3 Hide
    Thomas Creel , November 24, 2012 3:39 AM
    Nintendo
  • 0 Hide
    namedandclaimed , November 24, 2012 5:03 AM
    At least this time they put out a Mario game from the start and some other interesting titles. Hopefully some of the 3rd party titles will sell as well so it encourages more 3rd party devs to return. http://www.poci.info
  • 3 Hide
    Bloob , November 24, 2012 6:45 AM
    bison88I'm still at a loss at how Nintendo can sell the Wii-U for $299 with hardware that barely compares to the 360/PS3 and do so at a loss. Something just does not compute here. What are you doing so very wrong Nintendo?

    The hw is actually better than the current gen, and the controller actually has pretty fine tech inside. Anyone can just stream to a tablet (and back), but it isn't easy to do with almost zero latency.
  • 1 Hide
    bitmaiden , November 24, 2012 7:19 AM
    BloobThe hw is actually better than the current gen, and the controller actually has pretty fine tech inside. Anyone can just stream to a tablet (and back), but it isn't easy to do with almost zero latency.

    Was just going to say that same thing
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