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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.”

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About Matthew Bennett

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Matt is one of the longest-serving members of the EGMNOW team. An ability to go many hours without sleep and a quick wit make him ideal for his role as associate editor at EGMNOW.com. He often thinks back to the days when the very idea of this career seemed like nothing but an impossible dream. Find him on Twitter @mattyjb89

Wii U Becomes Profitable After One Game Sale

Nintendo has revealed that it will only make a profit on the Wii U console after customers buy their first game.

By Matthew Bennett | 11/21/2012 06:45 AM PT

News

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.”

0   POINTS
0   POINTS



About Matthew Bennett

view all posts

Matt is one of the longest-serving members of the EGMNOW team. An ability to go many hours without sleep and a quick wit make him ideal for his role as associate editor at EGMNOW.com. He often thinks back to the days when the very idea of this career seemed like nothing but an impossible dream. Find him on Twitter @mattyjb89