Ubisoft video game titles are pictured on the screen of a Nintendo Wii U tablet, on a large video screen at the Ubisoft press briefing during the E3 game expo in Los Angeles, California June 4, 2012. (Photo : REUTERS/Fred Prouse)
Video game consoles almost never sell for a profit at launch, unless you're Nintendo that is. While the Big N has been selling their systems at a profit for years, competitors Sony and Microsoft have continually opted to invest more in the technology of their consoles, and make the money back through software sales with a slow-burn strategy. Now that Nintendo has confirmed the entry price of the Wii U at $299.99, experts and journalists alike have begun digging to discover if the company will continue its trend. While Nintendo refused to divulge anything conclusive, it's clear that pricing will be crucial to the Wii U's performance this holiday, and that Sony and Microsoft will play a game of distraction with price drops of their own.
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Digital Trends reporter Anthony Agnello spoke to Nintendo's director of corporate communications Charlie Scibetta at the Wii U press conference on Wednesday. When Agnello asked Scibetta if the Wii U would turn a profit when it releases on November 18, he said: "I can't speak to profitability with either SKU."
"It's razors and razor blades. I'm not prepared to talk about whether we're going to try and turn a profit on the console or a profit on the games to make up for a loss on the other," he added.
The report notes that the Wii U costs around $180 to manufacture, without considering "packaging, distribution, and any pack ins." Given these figures, it is not so far-flung to consider the possibility that Nintendo may be altering its sales strategy, or opting to make less of a profit than usual in order to keep costs down.
Despite the implications of the Wii U's cost, Sony and Microsoft will not likely let Nintendo rest easy. In a study on Digitial World Research, P.J. McNealy asserts that the PS3's price will be cut to $249 from its current fee of $299.99. Microsoft is expected to offer special bundled consoles with "games or peripherals." McNealy also predicts that Nintendo reduce the Wii's price from $150 to $129 or $99.
One thing is certain: there will be a lot of low-hanging fruit in the console market for consumers looking for a new system.