Earlier we posted some comments from Nintendo’s director of corporate communications that didn’t commit to a clear answer on whether Wii U will be profitable at the system’s launch. A new interview with Reggie Fils-Aime, coming out of the NYC Wii U Preview event, sheds a bit more light on the subject.
According to the Regginator, Nintendo doesn’t believe in losing money on hardware. They intend to sell their systems at a profit – even if it’s only a marginal profit at first. This is going to be a must if Nintendo wishes to reverse their operating losses and return to full profitability by the end of the fiscal year.
Read on for his full comments on Wii U’s price strategy.
GamesIndustry: Let’s get right into it. Big news today with the Wii U price points and release date. How did Nintendo arrive at $299 and $349 as the price points for Wii U? And will Wii U be profitable from day one?
Reggie Fils-Aime: The way that we approach consumer value is we want to make sure we give the consumer a lot for what they pay, and when you look at that basic model you get the innovation in the GamePad (and all of the gaming options that presents), you get Miiverse in terms of a gaming community, you get Nintendo TVii, you get video chat… all of that is included in the base proposition. We think $299 is a really strong value, and it’s a value that’s going to be strong for a long time.
That gets into another one of our pricing philosophies; we don’t believe in pricing a product and then having to reduce the price some short time later. When we had to do that for 3DS, it was a very painful proposition for us. And what we did with the Wii at $249 and leaving it there for, I think, about three and a half years is very much consistent with our pricing philosophy.
In terms of profitability, we don’t comment on our internal byproduct P&L, but as a philosophy, we believe in making money on our hardware, even if it’s small amounts of money at the start. We don’t believe in losing a lot of money on hardware. I brought up 3DS – after the price cut, we were losing money on 3DS hardware and that’s what led to our posting our first operating loss ever as a public company.
I’m confident that Nintendo will be able to get by in its first year without having to initiate a heavy price cut. The base value being offered with Wii U – not only in the hardware department, but in terms of software as well – is much higher at launch than it was with 3DS.
Source: GamesIndustry International