During Nintendo’s financial call yesterday, the company’s President Satoru Iwata conceded that their fiscal year might have the shine taken off it by the Wii U’s release. Despite earlier hints that the hardware would be profitable from the outset, as Nintendo’s consoles usually are, Iwata admitted that they’d be selling at a loss for a while.
“Rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable.” Reported Iwata to investors by way of an explanation for the adjustment to Nintendo’s financial projections.
Nintendo has always managed to launch its hardware in profit, as opposed to Sony and Microsoft who sold their previous consoles at a loss for the first months and years, recouping that loss through licensing and software. The slow start to the 3DS’ life necessitated a drastic price cut that heavily impacted on Nintendo’s financial reporting for the period – they posted the company’s first ever annual loss.
While Iwata is predicting a negative impact on the company’s books, it’s not expected to be quite as bad as that. The company is predicting 5.5 million unit sales (although they say “sales” and “shipped” at different times) for the new console in its first year. That’s fewer than the Wii sold in its first year but roughly 340,000 units and that older console racked up over 28 million units of software sold in its first 12 months.
Iwata noted that he world’s largest videogames retailer – and owner of GameInformer Magazine, Gamestop – had already sold out of its preorder allocation and currently has 250,000 customer names on a waiting list, should more consoles become available to them.
Many have predicted that there would be market confusion because of the iterative nomenclature. More were forecasting poor sales because of the console’s status, comparable to currently available Microsoft and Sony machines. So this news might be seen as a little unexpected. It’s something of a cliché that you should never bet against Nintendo but it seems like once again, that mantra might hold true. I’ve preordered one, what about you?