The Nintendo Wii U will be profitable says Nintendo president Satoru Iwata, but not at the cost of the consumer. Iwata said in a recent interview with a Japanese newspaper that the tablet-controller console will not be outrageously priced, no matter what analysts and Amazon.com say.
Speaking with Japan’s Yomiuri Shimbun daily newspaper, the Nintendo CEO said that Wii U will be offered at a “reasonable” price. “We won’t make the same mistake we that we did with the 3DS, which was considered relatively high [priced] by consumers,” said Iwata.
He went on to say that the Wii U will be “an appealing product at launch” and that it’s “like no other system before it.”
Nintendo’s had a secret strategy to keep itself more than solvent over the past 30 years in the video game industry: It sells its hardware at a profit as soon as the device is on the market. It was instrumental in the success of the Wii, the Nintendo DS, and the Game Boy Advance, and even the original Game Boy. The profitability of Nintendo’s consoles often comes at the expense of some consumer-unfriendly design choices. The Game Boy Advance SP for example didn’t have a headphone jack, a seemingly essential feature for a portable device. Sometimes, the choice to keep the console profitable has irreparably hurt Nintendo. The Nintendo 64 and its cartridge format was intended to keep Nintendo making big bucks from selling cartridges to game makers at high prices much as they’d done during the NES and SNES eras, but the popularity of CD-ROM technology put that plan to bed.
Nintendo was able to sell the Wii well above manufacturing costs for years after its initial release, but the company overestimated its stance in the market when it released the Nintendo 3DS in 2011. At $250, consumers balked at the portable console and it sold so poorly that Nintendo was forced to drop the price to $170 just 4 months after it hit shelves. The price cut also forced Nintendo to sell the 3DS at a loss.
Iwata assured investors in this interview that the Nintendo 3DS is now a profitable device though. “[We’ve] fixed the 3DS profitability issue, and pledge to turn profitable [as a company] by the end of the fiscal year.”
It appears that Nintendo might still be cutting corners in the name of hardware profitability. The new Nintendo 3DS XL will not have a second analog pad despite widespread demands for one from the company’s fans.