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Nintendo expecting little starting loss from Nintendo Wii
Most gaming hardware companies sell their consoles at a big loss in the starting years hoping to make money from royalties and game sales. Sony and Microsoft are two good examples. However, Nintendo is taking a different approach by developing a relatively cheap console to keep the initial costs low and providing innovative game play to their consumers.
The company has said that they are unlikely to lose much money in the first year of launch of their upcoming gaming console Nintendo Wii. Nintendo President Satoru Iwata said in a statement: “We can’t promise we won’t have even a one-yen loss, but we are not expecting an enormous loss.”
He added: “It is a strange notion that a game console always leads to mounting losses in the beginning. We are working to make the Wii business a healthy one from the first year.”
Nintendo is aiming to sell f 6 million Wii consoles in the year to next March and 17 million units of Wii software and this would put limited pressure on their revenues as they are aiming to boost profits by increasing production of the DS Lite handheld console, which is hugely successful in the Japanese market.
They have already announced that the console would be priced at below USD 250 levels in the USA, which is much lower than both Microsoft Xbox 360 and Sony Playstation 3 prices.