News Article

Wii U Becomes Profitable With One Game Sale

Posted by Thomas Whitehead

Buy a game, make Mario say wahoo!

It was confirmed in late October that Wii U will be sold at a loss, which gave the retail price some context and perhaps made some supporters nervous about the financial impact on the company. According to comments from Nintendo of America boss Reggie Fils-Aime, however, the loss on each console is evidently small enough to not be a concern.

In an interview with Mercury News, Reggie explained that any potential loss immediately turns to profit with the sale of one game.

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.

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.

Of course, Nintendo takes a royalty from each game sale — typically between 20 and 30% — which suggests that the loss on each console is a small amount equating to around £10/$15 or less. As with 3DS, it's also possible that streamlining and improvements in manufacturing will likely turn each system sale into a profit, though after the recent Foxconn controversy it's perhaps understandable if Nintendo doesn't directly address that in the near future. Elsewhere in the same interview, Reggie tackled a question on whether much of the Wii audience had been lost to smartphone or Facebook-style games.

Our target is consumers 5 to 95. We pride ourselves on being a mass market games company. We absolutely want more active players. We want more casual players. And we think we've got the offering to attract a very wide audience.

Consumers are looking for new and compelling experiences. And we believe we're delivering a vast array of new and compelling experiences with Wii U.

So there you have it, once you buy a game — the pre-bundled Nintendo Land with the Deluxe Set doesn't count — then you're making that Wii U profitable for Nintendo. All in all, it's not a bad position for the famous gaming company.

[via mercurynews.com, eurogamer.net]

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User Comments (25)

mudjo

#1

mudjo said:

Hurrah! Just remember to buy a game to play on your console, kiddies!

Hybrid

#2

Hybrid said:

I just hope they won't stick to Mario titles too much, like with the 3DS (NSMB2, SM3DL, LM2, PMSS...)

Sjoerd

#4

Sjoerd said:

Yeah @Hybrid, give that guy in green some credit. He's probably terrified to enter those mansions for YOUR entertainment

Shworange

#6

Shworange said:

Capitalist crap! I'm going to buy a Wii U but no games! That'll show em! Hahahahahahaha! It's all coming together now!!! Lol

rjejr

#11

rjejr said:

This is my problem with the whole "we sell it at a loss, woe is us" scenario. Are they selling it at a $50 loss or a 5 cent loss due to rounding? In the US you sell something at $299.99, so if it cost them $301.03 you aren't going to sell it at $311.05 to make $10, that's just the way things are priced here. Plus they have 2 different consoles in 2 different packages at 2 different prices so who knows how they are measuring unit cost anyway as the Premium has over $100 more stuff - $60 game, 24GB storage, 3 stands, "discount reward program" - for $50 more.

zeldazero

#13

zeldazero said:

Well I bought 5 games at launch so I made them profit for 4 other people. Your welcome Nintendo :)

Emaan

#15

Emaan said:

I'll be sure to make Mario happy when I get New Super Mario Bros. U next month. This is good news! ;)

Randomname19

#17

Randomname19 said:

Does Nintendoland in the premium pack counts? That's the only game i'm getting for now. I'll buy other games around Christmas

LavaTwilight

#18

LavaTwilight said:

Already got two additional games preordered plus a nunchuck and remote (I already have 4 but only 3 with the motionplus) so I think I'm doing my bit :)

TimboBaggins

#19

TimboBaggins said:

brilliant, because who isn't going to purchase NSMBU on day one? And its not available as a pack in.

TheRegginator

#21

TheRegginator said:

I suppose they are only selling it at a small loss. That's good. Within a year or some the components will cost less and Nintendo will start profiting off of console sales.

Void

#22

Void said:

I bought 3 games, NSMB.U with my Wii U when I pre-ordered and then 2 more from Toys 'R' us, and I'll surely buy more before the end of the launch window.

ArcanaXVI

#23

ArcanaXVI said:

Picked up my Wii U Deluxe with a copy of ZombiU right off the bat. Glad to know I've done my part.

DrDaisy

#24

DrDaisy said:

"Buy a game, make Mario say wahoo!"
I know that's kind of a joke, but since I grew tired of his voice a long time ago, you would have given me a reason NOT to buy a Wii U game if you were being literal.

Henmii

#25

Henmii said:

"Wii U Becomes Profitable With One Game Sale"

No loss for Nintendo then! The least you could do (and what almost everyone does, I guess) is buying one game!

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