At the company's latest financial results brief, Nintendo president Satoru Iwata has revealed that the Wii U console will be sold for less than its manufacturing costs at launch, implementing a loss-leading strategy that Nintendo has traditionally avoided with previous devices. (via: GI International
"The Wii U hardware will have a negative impact on Nintendo's profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable," he said.
"In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost."
He added this would prevent the company achieving "Nintendo-like" profits within this fiscal year.
"We will make best efforts to retrieve "Nintendo-like" profits by: boosting sales of the Nintendo 3DS system as a sound successor to Nintendo DS both in Japan and overseas during the year-end sales season, launching the Wii U system successfully in each part of the world in the year-end and maintaining the sales momentum next year, and, transforming our business structure in line with the times, including the expansion of our digital business to increase our business efficiency and profitability."
It's worth noting however, that given the current US$50 disparity between North American launch price and the Australian one, it's likely (although not confirmed) that Nintendo will still be turning a profit from consoles sold Down Under.
The development comes a day after Nintendo had cut their fiscal quarter Wii U sales expectations by half
, to 5.5 million units worldwide by March 2013.
The Nintendo Wii U is due to launch in Australia on November 30th 2012, with an 8GB storage Basic Pack selling for AU$349.95, and a 32GB storage Premium Pack (with the Nintendo Land game, console stand, and charging cradle) asking AU$429.95.
In contrast, the North American pricing has been set at US$299 for the Basic, and US$349 for the Premium.