When Nintendo launches its Wii U gaming console on November 18th, Nintendo’s Chief, Satoru Iwata, said the company won’t be profiting one-bit. Iwata hinted that Nintendo would sell Wii U “below cost” when launched in North America next month. They weren’t able to provide a rundown of the exact loss per sold unit, but we sure know one thing — the revenue loss will begin to stack up quickly.
When Wii U launches next month, customers will receive a Gamepad controller and hardware system all for $299.99! Additionally, customers will have the choice of purchasing a bundled package — including a Wii U system, Gamepad, charging station, stand, and Nintendo Land video game for $349.99.
A video game console for $299.99 is incredibly cheap nowadays when you consider the technology capitalized. If you consider the past, Nintendo has always sold their gaming consoles at slight profit margins; this may be the first time Nintendo releases a console sold “at loss.”
Established companies such as Nintendo, Microsoft, and Sony employ similar “at loss” tactics to draw attention to the new gaming console. After a console creates a positive reputation on the market, the merchant bumps up pricing on the system. The initial release phase is critical for any company, no-matter what is being sold.