Nintendo confirmed during its second quarter financial results briefing that Wii U will be sold at a loss. This may come as a slight shock to some considering Wii U is launching at a relatively high price, and suggests Nintendo won't be in a position to change the pricing for some time. We can't imagine what cost it would be if Nintendo wasn't running at a loss.
Satoru Iwata, Nintendo President and CEO, made a statement at the briefing:
In addition to the yen's continuous appreciation, 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. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve "Nintendo-like" profits within this fiscal year.
However, Iwata adds that Nintendo will aim to return to high profit margins next year by launching the Wii U successfully. The company is currently aiming to shift 5.5 million Wii U consoles through to 31st March, 2013.