Nintendo Will Lose Money on Every Wii U Sold

Nintendo will be selling its upcoming Wii U console at a loss, the company revealed yesterday, as it cut its profit forecast. Nintendo is expecting the move to pay off in the long run, through sales of additional hardware, and future cuts in its production costs, the BBC explains. "We had to book a loss on the hardware, which is currently in production and will be sold well below cost," the company's president said, warning that they wouldn't post "Nintendo-like" profits this year.

Both the Playstation 3 and Xbox 360 were originally sold at a loss, but until now Nintendo has held out. "We will make a profit on the entire Wii proposition out of the box," the company's then-boss said ahead of the original Wii launch in 2006. Nintendo was likely motivated to take the risk to take advantage of its early launch, coming at a time when Sony and Microsoft are sitting on their laurels, and to stave off competition from tablets, phones, and other low-end gaming platforms. (More BBC stories.)