Nintendo has revealed that it will only make a profit on the Wii U console after customers buy their first game.
“As soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive,” Nintendo of America boss Reggie Fils-Aime told Mercury News. A usual move by Nintendo is to price consoles so that it makes a profit on the hardware, however with the Wii U they have gone down a different route pricing the console at a loss and making the money up with software sales.
It can’t be much of a loss though if a single game sale can push it over the profit margin. “In the end, the business model is still to drive the install base of hardware,” Fils-Aime added. “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.”