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Topic: At the end of the day was the Wii U profitable for nintendo?

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nathanjones007

Good afternoon,

Just to start off, this is not a NINTENDO is doomed thread. I am not a big numbers or stats guy nor claim to be. So my question starts off from the beginning of the WII U cycle ( research and development) to the manufacturing and selling of the system, did this system actually turn a profit? This also includes 1st party software, accessories and Amiibos. If memory serves me there are about 14 million Wii U consoles sold to date.

If my opinion I would say Nintendo would be lucky it broke even. I know that the 3DS carried all the water and was the companies saving grace.

Thanks for your participation!

nathanjones007

shaneoh

nathanjones007 wrote:

If memory serves me there are about 14 million Wii U consoles sold to date.

If Nintendo sold the Wii U for $100US (underestimating) to suppliers, that makes 1.4 Billion dollars US. Factor in games, hardware, amiibo, and the cut taken from third parties on the eShop and I think they made a profit, not a huge one compared to some of their previous consoles, but a profit nonetheless. If they weren't making satisfactory money then I think there would have been a price cut of the console like the 3DS got.

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AlexSays

Literally nobody knows but Nintendo. We don't know how much research and development cost. We don't know how much manafacturing and transportation cost. We don't know how much their profit shifted throughout the console's lifespan with price cuts and technology price changes.

You're going to get a lot of posts on this site basically saying 'oh yeah of course they did' such as the one above, but there's literally no way for anyone on this site to know.

We also don't know how much they anticipated making; which is important because anything less to them is seen as lost potential revenue and a loss overall, despite earning more than a net dollar.

If you're looking for just general opinions, I don't believe they lost money on the console. But of course I have no proof of that.

AlexSays

SpentAllMyTokens

If you're counting Amiibo sales as part of WiiU sales, I feel like they must have turned a profit. They sold a ton of those and they were cheap as all heck to produce, I'd imagine. Otherwise, AlexSays is right. It's hard to say, and we don't really know. I'd be surprised if they didn't sell enough to break even, though.

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shaneoh

AlexSays wrote:

You're going to get a lot of posts on this site basically saying 'oh yeah of course they did' such as the one above, but there's literally no way for anyone on this site to know.

Which is why I said "I think."

shaneoh wrote:

I think they made a profit

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gcunit

I suspect even Nintendo would struggle to quantify how much they spent on R&D for the Wii U, because part of their routine business practices, if you believe what Nintendo says (and there's not much reason not to), is to research and develop various technological innovations. Some they'll scrap and never use again; some they'll shelve and maybe return to at a later time if circumstances are better suited; some they'll take parts of and mix with parts of another experiment etc.

And the opening message of the Switch presentation was that it's the culmination of more than 30 years of hardware development - so do we count all the time & money Nintendo have ever spent on hardware development when calculating Switch R&D spend?

I guess there might have been a date and time when 'Project Cafe' officially began, and so you could draw a line there and start adding up everything that came after that line. But Wii U R&D I think has undoubtedly contributed to Switch R&D. So I don't see how you can ever specify exactly how much they spent on one project in isolation.

tl:dr - don't know

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blaisedinsd

I hope so. Pretty sure if it didn't it would be the first time they didn't make a profit outside of maybe the virtual boy.

I think its an important question. If they are at least profitable it is less likely they are in danger of dropping out of the hardware business going forward. Switch is pretty important as it is basically replacing Wii U and 3DS. If it were to lose money and the Wii U potentially was a money loser there just may be some actual NINTENDOOM

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Peach64

They can't have. Look how strong the 3DS was in 2013 or amiibo in 2014 and they still made huge loses in those years. If you have 3 products, 2 of them are making a lot of profit, but overall you're losing money, then that final product must be a huge money sink.

Peach64

shaneoh

Peach64 wrote:

They can't have. Look how strong the 3DS was in 2013 or amiibo in 2014 and they still made huge loses in those years. If you have 3 products, 2 of them are making a lot of profit, but overall you're losing money, then that final product must be a huge money sink.

The question was whether the Wii U was profitable, not whether that profit is enough to sustain the whole company. During that period there is still R&D going on, which costs a fair chunk of money, but it's not R&D for the Wii U, but what will eventually become the Switch. An old NL article has an analcyst (no I didn't misspell that), speculating that R&D costs between $500 and $600 million dollars, that's the majority, if not all, of losses in those years if the prediction is accurate. Then you've got legal costs countering patent trolls and a host of other expenses that I can't think of off the top of my head which are money sinks in the short term.

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RazorThin

I believe so yes, many of their first party games have sold over half of their install base of 12 million which is rather large compared to other third parties who sell only a few million copies and still make a profit.

RazorThin

skywake

@Peach64
Yeah, but where was that money spent during those years? Sure they didn't make enough money from the Wii U during that period to cover their expenses. Low revenue that was partly because of poor Wii U sales but also partly because of currency conversion. But were they sinking money into the Wii U during that period?

We know that their software development teams during this period were working on some big Wii U games. Breath of the Wild, Splatoon, Mario Kart 8 and Smash Bros being the main ones. We now know that BotW and Mario Kart are being brought to the Switch. We know that Splatoon is getting a sequel that is clearly built on the work of the original. There are rumours that they're also porting over Smash Bros. Even if those games didn't allow the Wii U to break even do they still count towards Wii U losses if they help push along the Switch?

And that's ignoring other games that maybe started on the Wii U that are shifting over. Super Mario Odyssey and Fire Emblem Warriors being the obvious two. The rumoured Pikmin 4 probably being another one. If we see something on the scale of Metroid Prime at E3? There's a fair chance it started on the Wii U.

So basically I think it's fair to assume that there was a lot of money sunk into "Wii U" R&D. But a lot of that should be able to be re-used for the Switch. And if that's the case, is that still entirely "Wii U" R&D? There are a lot of poorly defined lines here. Especially for people like us who don't have access to all the numbers.

Edited on by skywake

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dumedum

It was probably profitable, but that's not the point. It just wan't profitable enough.
It's like if you enter into an investment in a Startup, you're a venture capital fund, you're not looking to have a 2% profit or whatever, you're looking for 20% minimum (not to mention plans of 2X liquidation and above). You're making a big investment, time consuming, and a risky one and you want big results. Because they have a public perception and public market, they need consoles like Gamecube or Wii U, and even 3DS to a degree, to be more profitable to make it really worthwhile.

Edited on by dumedum

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pika677

History says yes, as it stopped losing money in 2014, leading to their first profitable year reported in 2015. It was minimally profitable, but since public opinion rules the internet (and moronipedia) it's deemed a "commercial failure" despite being profitable!

pika677

TheCurator

I guess it was profitable but minimally. However, it definitely could have gone better in terms of sales figures if Nintendo have had put all their effort into advertising it and promoting it like they're doing currently with the Switch. Also they're target audience at that time was wrong. They thought that the same people who bought the Wii will eventually move on to the Wii U but they didn't see that most of the aforementioned people were just consumers who purchased the Wii as their second or third console option not as their primary video game system. So when the PS4 and the XBOX One hit the road nobody looked back at the U.

Edited on by TheCurator

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GoldenGamer88

Yup, good idea to revive a thread a year and a half old and dead since.

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SuperLuigi111

They may have slightly broken even, but I think that's at best.

SuperLuigi111

Delibheel

Let's let dead threads rest in peace.

Yeah I don’t know either.

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